Source - RNS
RNS Number : 4619I
Alpha Bank A.E.
30 August 2016
 

 

 

 

 

 

 

SEMI ANNUAL FINANCIAL REPORT

for the period from 1st January to 30th June 2016
(In accordance with Law 3556/2007)

 

 

 

 

 

 

 

 

 

Athens,

August 30, 2016

 

TABLE OF CONTENTS    

Statement by the Members of the Board of Directors................................................... 5

Board of Directors Semi Annual Management Report................................................... 7

Independent Auditors' Report on Review of Interim Financial Information
(on Group Interim Financial Statements)................................................................................... 19

Interim Consolidated Financial Statements as at 30.6.2016
(In accordance with IAS 34)

     Interim Consolidated Income Statement............................................................................. 21

     Interim Consolidated Balance Sheet................................................................................... 22

     Interim Consolidated Statement of Comprehensive Income............................................... 23

     Interim Consolidated Statement of Changes in Equity........................................................ 24

     Interim Consolidated Statement of Cash Flows................................................................... 26

    Notes to the Interim Consolidated Financial Statements

        General Information ...................................................................................................... 27

        Accounting Policies Applied

         1.1 Basis of presentation................................................................................................... 29

         1.2 Estimates, decision making criteria and significant sources of uncertainty...................... 29

        Income Statement

         2. Gains less losses on financial transactions................................................................. 32

         3. General administrative expenses................................................................................ 33

         4. Impairment losses and provisions to cover credit risk.................................................... 34

         5. Income tax.............................................................................................................. 34

         6. Earnings / (losses) per share..................................................................................... 37

        Assets

         7. Loans and advances to customers.............................................................................. 38

         8. Investment and held for trading securities.................................................................... 40

         9. Investment property.................................................................................................. 41

       10. Property, plant and equipment.................................................................................... 42

       11. Goodwill and other intangible assets........................................................................... 43

        Liabilities

       12. Due to Banks........................................................................................................... 44

       13. Debt securities in issue and other borrowed funds......................................................... 44

       14. Employee defined benefit obligations........................................................................... 46

       15. Provisions................................................................................................................ 46

        Equity

       16. Share capital and Retained earnings............................................................................ 48

       17. Hybrid securities....................................................................................................... 48

        Additional Information

       18. Contingent liabilities and commitments........................................................................ 49

       19. Group Consolidated Companies.................................................................................. 53

       20. Disclosures of Law 4261/5.5.2014............................................................................... 56

       21. Operating segments.................................................................................................. 59

       22. Exposure in credit risk from debt issued by the peripheral Eurozone countries................... 60

       23. Disclosures relevant to the fair value of financial instruments........................................... 61

       24. Capital adequacy...................................................................................................... 66

       25. Related - party transactions........................................................................................ 67

       26. Αssets held for sale and discontinued operations........................................................... 68

       27. Corporate events....................................................................................................... 72

       28. Restatement of financial statements............................................................................ 73

       29. Events after the balance sheet date............................................................................. 78

Independent Auditors' Report on Review of Interim Financial Information
(on Bank's Interim Financial Statements)............................................................................. 79

Interim Financial Statements as at 30.6.2016
(In accordance with IAS 34)

     Interim Income Statement.............................................................................................. 81

     Interim Balance Sheet................................................................................................... 82

     Interim Statement of Comprehensive Income.................................................................. 83

     Interim Statement of Changes in Equity.......................................................................... 84

     Interim Statement of Cash Flows.................................................................................... 85

     Notes to the Interim Financial Statements

        General Information ....................................................................................................... 86

        Accounting Policies Applied

         1.1 Basis of presentation.............................................................................................. 88

         1.2 Estimates, decision making criteria and significant sources of uncertainty..................... 88

        Income Statement

         2. Dividend income...................................................................................................... 91

         3. Gains less losses on financial transactions................................................................. 91

         4. General administrative expenses............................................................................... 92

         5. Impairment losses and provisions to cover credit risk.................................................... 93

         6. Income tax............................................................................................................. 93

         7. Earnings/(losses) per share...................................................................................... 95

        Assets

         8. Loans and advances to customers............................................................................ 96

         9. Trading and investment securities............................................................................. 97

       10. Investments in subsidiaries, associates and joint ventures............................................ 98

       11. Investment property................................................................................................. 99

       12. Property, plant and equipment................................................................................. 100

       13. Goodwill and other intangible assets......................................................................... 101

        Liabilities

       14. Due to Banks........................................................................................................ 102

       15. Debt securities in issue and other borrowed funds...................................................... 102

       16. Employee defined benefit obligations........................................................................ 104

       17. Provisions............................................................................................................. 104

        Equity

       18. Share capital and Retained earnings........................................................................ 105

        Additional Information

       19. Contingent liabilities and commitments.................................................................... 106

       20. Operating segments.............................................................................................. 108

       21. Exposure in credit risk from debt issued by the peripheral Eurozone countries............... 110

       22. Disclosures relevant to the fair value of financial instruments....................................... 111

       23. Capital adequacy.................................................................................................. 116

       24. Related - party transactions................................................................................... 117

       25. Assets held for sale and discontinued operations...................................................... 119

       26. Merger of Company Diners Club Greece Α.Ε.P.P...................................................... 121

       27. Corporate events.................................................................................................. 121

       28. Restatement of financial statements....................................................................... 122

       29. Events after the balance sheet date........................................................................ 123

Appendix...................................................................................................................... 125

 

 



 




Statement by the Members of the Board of Directors

(in accordance with article 5 paragraph 2 of Law 3556/2007)

 

To the best of our knowledge, the interim financial statements that have been prepared in accordance with the applicable International Financial Reporting Standards, give a true view of the assets, liabilities, equity and financial performance of Alpha Bank A.E. and of the group of companies included in the consolidated financial state
ments taken as a whole, as provided in article 5 paragraphs 3-5 of Law 3556/2007, and the Board of Directors' semi-annual management report presents fairly the information required by article 5 paragraph 6 of Law 3556/2007 and the related decisions of the Hellenic Capital Market Commission.

 

 

Athens, 30 August 2016

 

 

THE CHAIRMAN
OF THE BOARD OF DIRECTORS

THE MANAGING DIRECTOR

THE EXECUTIVE DIRECTOR

 

VASILEIOS T.RAPANOS

ID. No ΑΙ 666242

 

DEMETRIOS P.MANTZOUNIS

ID. No Ι 166670

 

ARTEMIOS CH.THEODORIDIS

ID. No ΑΒ 281969

 

 





 


Board of Directors Semi Annual Management Report

 


GREEK ECONOMY

The adjustment programmes, implemented since 2010, managed to address the big macroeconomic and fiscal imbalances. In particular, the significant fiscal deficit has been diminished and 80% of the total fiscal consolidation effort has been accomplished. The primary fiscal surplus is targeted to 3.5% of GDP in 2018. Moreover, the deficit in the current account, the competitiveness losses in terms of unit labour cost and the rigidities in the labour market, have been coped. There was also a restructuring of production in favor of tradable goods and services.

The Greek economy has shown signs of resilience, as the negative impact of the imposition of capital controls in the summer of 2015 proved to be more moderate than initially expected. The GDP fell by only 0.3 % in 2015, while it shrunk by 0.96%, on a yearly basis, in H1 2016.

With the successful completion of the first review of the adjustment programme, economic prospects have been improved, as the creditors approved the partial disbursement of the second loan tranche according to the ESM programme, amounting to €10.3 bn. The first part of the tranche, amounting to €7.5 bn, has already been disbursed while the remaining, €2.8 bn, is expected to be released in the fall of 2016, assuming that a number of prior actions will be fullfilled.

The disbursement of the loan tranches aim to cover financing needs and allow the partial clearance of government arrears to the private sector, which, in turn, will have a positive impact on liquidity and economic activity in H2 2016. The completion of the first review has already improved business sentiment, signaled the government's determination to continue the reforms and finally contributes to the elimination of the recessionary effect and the return of the economy to a growth path.

The real GDP registered a negative rate of change by 0.9%, on a yearly basis, in the second quarter of 2016, from -1% in the first quarter, while the economy is expected to recover from the second half of the year onwards. Furthermore, from the second half of the year, a number of positive trends in economic activity are expected to be activated, based mainly on the gradual increase of investment spending, the stabilization of private consumption and the strengthening of tourism. The positive momentum is expected to continue, assuming the continuation of the reform effort, a development that will release forces towards the shift of the production model to more extravert and innovative activities.

In 2016 overall, the decline in economic activity is estimated to range between -0.4% and -0.2%. However, in 2017 it is estimated that the real GDP will grow by 2.5% (according to the Bank of Greece) with driving forces the fixed capital formation (+10.8%), goods and services exports (+3.9%) and private consumption (+1.6 %).

The key factors that are going to determine investment spending are the acceleration of privatizations, according to the Program, and the return of confidence. The latter will be strengthened by (i) the participation of Greek government bonds to the ECB's Quantitative Easing programme, (ii) the reinstatement of waiver allowing Greek banks to access ECB's normal financing lines and (iii) the agreement reached at the Eurogroup for debt relief measures in order to achieve debt sustainability in the long run. Additionally, Greece is expected to receive approximately €36 bn from the EU structural and investment funds over the programming period 2014-2020, which will be directed to the agricultural sector as well as energy, innovation, environment, maritime and fisheries.

The short-term hard data show a mixed picture:

(a) Retail trade turnover fell by 5.5% in the first five months of 2016, on a yearly basis, compared with a fall by 1.3% in the corresponding period of 2015.

(b) Exports of goods decreased significantly by 7.9% in the first half of the year, compared with a slight decrease of 4.2% in the corresponding period of 2015. However, the trade balance benefited by the fall in fuel prices and the contraction in domestic demand, for imported consumer goods.

(c) The fall in construction sector accelerated further in 2016, as building activity remains on a downward trend and financing problems have slowed down the progress of major infrastructure projects.

d) The gross value added of services sector contracted in the first quarter of 2016 (-0.8%) as trade sectors, hotels-restaurants and transport-communications fell by 2.6%, as compared to the corresponding period of 2015.

(e) In 2016, the labor market improves, albeit at slower pace than in 2015, due to positive expectations for tourism activity and the growth of flexible forms of employment. It is indicative that in the five month period of 2016 the average unemployment rate fell to 23.8%, versus 25.5% in the same period of 2015, employment increased by 2.7% and the number of unemployed decreased by 6.3%. However, high youth unemployment and long-term unemployment remain crucial issues, whose solution is linked to the continuation of structural changes.

(f) In H1 2016, the manufacturing production increased significantly by 4.3% on a yearly basis (first half 2015: +2.8%), while in June recorded an impressive increase of 8.5%.

(g) The growth rate of new passenger car registrations also increased significantly by 14.1%, on a yearly basis, in the first seven months of 2016 and by 37.1% in July.

(h) The fiscal consolidation is on track, as in 2016 is expected a primary surplus of 1.3% of GDP, against the target set for a primary surplus of 0.5% of GDP.

(i) Additionally, tourist activity increased, as foreign visitor's arrivals are expected to register a new record in 2016 for a fourth consecutive year (according to Bank of Greece).

In the current economic environment the restoration of confidence in the domestic banking system is apparent, accompanied by the improvement in the Economic Sentiment Index in July, which was affected positively by the completion of the first review and negatively by the outcome of the British referendum.

However, the improvement of the economic climate is not balanced, as it is mainly related to positive business expectations in the services sector, due to the expected good performance of tourism. On the contrary, the downward trend in consumer confidence index and the decline of retail sales in July, on an annual basis, are attributed the tax increase burden, as a result of the fiscal discipline, which in turn may lead to economic activity slowdown.

The Banking Sector

Regarding the banking sector, there is an improvement in confidence in the domestic financial system, which is the result of a number of factors such as:

•   The further relaxation of capital controls which may contributes to the return of deposits. Already in July 2016 there was an increase of deposits of the private sector by 1.4% on a yearly basis. Furthermore, in July 2016 the annual rate of change of credit to the business sector declined at a slower pace (July 2016: -0.4%, June 2016: -1%).

•   The eligibility of the Greek government bonds as collateral in the Eurosystem by reinstating the waiver that enables Greek banks to obtain low-cost financing from the ECB.

•   The reinstatement of the haircut level, applied to eligible collaterals, at the one prior to the abolition of the waiver, is a favorable development that affects positively the liquidity of Greek banks.

It is also mentioned that the credibility to the Greek economy is enhanced by the additional measures that have been approved by the Parliament, in combination with the contingency mechanism which will be activated in case of failure in accomplishing the targeted primary surpluses.

The above developments are important for the Greek banking sector in a period of uncertainty in the global financial markets, especially the European ones, as indicated in the plunge of the Euro Stoxx Banks price index.  Despite the fact that the results of the stress tests, implemented to the European banks, were satisfying and the additional capital needs are limited to a relatively small number of banks, the global markets remain volatile due to:

a) the political uncertainty, geopolitical tensions and terrorist attacks, b) extremely low or even negative interest rates that affect negatively the profitability of the sector, c) the weak growth of the Eurozone and UK, which will hardly accelerate following the outcome of the British referendum and d) the increasing concerns about the level of non-performing loans and the general situation of the Italian financial sector.

INTERNATIONAL ECONOMY

High volatility of stock markets recorded in the first month of 2016 showed signs of stabilising in mid-February. However, the outcome of the referendum in the UK on 23 June 2016, in favour of leaving the European Union took the stock markets by surprise and significantly increased uncertainty. As a result, the sterling has depreciated, share prices have fallen, particularly the ones of European banks. Moreover, major government bond yields have declined and entered into a negative territory. According to Fitch rating agency estimates, government debt in the global markets negative yield is worth of about $11.4 trillion.

Political and economic uncertainty was reinforced by the fact that the new institutional relationship between the United Kingdom and the European Union is not yet defined and that there is no clear timetable for its establishment. This led to a downwards revision of the estimated global economy growth. According to the latest estimates by the International Monetary Fund (July 2016), world GDP will grow at 3.1% in 2016 and will accelerate to 3.4% in 2017.

The outcome of the referendum in the United Kingdom affected the projected path of oil prices, which has been adjusted downwards, around $45 and is expected to remain at this level until the first quarter of 2017. Persistence of the oil price at very low level for more than two years, has led to the prevalence of low inflationary pressures, particularly in advanced economies. Deflationary pressures are reinforced by the decline in commodity prices, and these are expected to remain at a low level for a long period.

In developed economies, low inflation allows the continuation of expansionary monetary policy in order to strengthen recovery and improves the financial conditions of the private sector which indirectly will positively affect the public sector, too. The major Central Banks aim to increase inflation close to 2%, with a combination of conventional and unconventional measures of expansionary monetary policy as very low, or even negative, official interest rates, quantitative easing (QE) and forward guidance.

International trade in goods and services is expected to record a rise in the current year by 3.1%, and further accelerate further in the next year (3.8%), according to estimates by the International Monetary Fund.

However, the global economy continues to be afflicted by geopolitical tensions and increased terrorist incidents, which may reverse the course of global economic activity.

In the US, GDP growth is expected to decelerate to 2.2% in 2016, compared with 2.4% in 2015, due to the relatively strong dollar and the decrease of private investment, particularly in the energy sector. Private consumption remained at a satisfactory level, based on the increased labour income and higher employment. However, the volatility of macroeconomic indicators in the US and the increased uncertainty in the financial markets has not yet allowed the Federal Reserve to raise interest rates after December 2015, when it seemed that a gradual rise in interest rates would follow.

In China, GDP growth rate is expected to further decelerate in 2016 to 6.5%, after having fallen to 6.9% in 2015 and 7.3% in 2014. The reason is the weakening of investments and exports, as growth is now based more on consumption and services and less on investment and industry.

In the Eurozone, GDP growth rose to 1.6% in 2015, compared with 0.9% in 2014, but is not expected to strengthen further in 2016. The recovery is based mainly on domestic demand as the European Central Bank (ECB) has adopted accommodative monetary policy since June 2014. Indicatively, the deposit rate is negative from June 2014 (-0.10%) and has been further reduced, to -0.40%, since March 2016. However, as the ECB points out, the expansionary monetary policy is imperative to be complemented by the necessary reforms in the labour and product markets in order to improve the Eurozone competitiveness and render recovery sustainable.

The fiscal policy stance in the Eurozone, has also contributed to the short-term economic recovery, as the debt of the General Government to GDP has declined due to higher primary surpluses and the growth rate being higher than the interest rate. The debt ratio of General Government to GDP has declined to 91.7% in the first quarter of 2016 from the high level of 94.4% in 2014. However, there are still considerable differences among Member States.

The economic recovery has led to job creation and, as a result, the unemployment rate is expected to fall further in 2016, to 10.5%, from 11.5% in 2015 and 11.6% in 2014.

The banking system of the Eurozone demonstrates resilience, according to the EU-wide stress test results. The stress test was carried out in July 2016, by the European Banking Authority (EBA) in cooperation with the ECB, in a sample of 51 banks, of which 37 are under ECB's supervision. The weighted average Common Equity ratio (CET1) stands higher than in 2014, both under the baseline (July 2016: 13.0%, 2014: 11.2%) and the adverse scenario (July 2016: 9.1%, 2014: 8.6%). However, Monte dei Paschi di Siena which bears a significant volume of non-performing loans was shown to have a weak financial position. This exercised pressure on the Eurozone banking sector shares. In the end, in early August the securitisation of Monte dei Paschi di Siena non-performing loans was approved and its recapitalisation is expected to take place.

Analysis of financial statements

On 30.06.2016 the total assets amounted to €67.4 billion. This amount was reduced by €1.9 billion or 2.8% compared to 31.12.2015. At the end of June 2016, the total Group loans, before impairment, amounted to €57.8 billion compared to €58.2 in 31.12.2015, showing a decrease by 0.7%. The increase of accumulated impairments by €0.3 billion during the first semester of 2016, resulted in the adjustment of loans' balance after impairment to €45.5 billion compared to €46.2 billion in 31.12.2015.

The total deposits of the Group amounted to €31.7 billion, showing an increase compared to 31.12.2015 by 0.7%, resulting to a loan deposit ratio of 143.7%. This indicator remains relatively stable compared to 31.12.2015 which amounted to 146.9%. Eurosystem funding decreased by € 1.7 billion during the first semester of 2016 mainly due to the sale of EFSF bonds through the PSPP programme, the increase of deposits and the new repurchase agreements (Repos).

In Assets held for Sale and Liabilities related to Assets held for sale, have been included the figures of the companies APE Fixed Assets, APE Commercial Property AE, APE Investment Property AE and Ioniki Hotel Enterprises S.A., following the relevant decisions for the commencement of the sale procedure.

Regarding the captions of the Equity which amounted to €8.9 billion on 30.06.2016, the Common Equity Tier I amounted to 16.7%.

Analyzing the financial performance of the first semester, the net interest income amounted to €966 million and it was positively affected by the decrease of the deposits' interest rates and of bonds issued by the Group, after the liability management exercise at the end of the previous year.

Net fee and commission income amounted to €158.8 million decreasing by 1.5% compared to the first semester of 2015, which amounted to €161.2 million. This decrease is mainly attributed to the pressure on loans and mutual funds commissions, on contrast to the improvement in credit commissions after the imposition of capital controls in the summer of 2015.

Gains less losses on financial transactions recorded profits amounting to €60 million, out of which the amount of €71.9 million concerns the compensation of the Group from the acquisition of Visa Europe by Visa Inc.

Group's total income amounted to €1,213 million, increased by 2.4% compared to the first semester of 2015 which amounted to €1,185 million.

Group's total expenses, amounted to €603 million, increased by 8.7% compared to the first semester of 2015 which amounted to €555 million mainly due to the voluntary separation scheme cost of Alpha Bank Cyprus amounting to €31.5 million as well as to the proportion of the contribution to the Resolution Fund, which in the respective semester of 2015 did not exist.

The expenses to income ratio, excluding financial results and other non-recurring expenses, decreased by 0.9% compared to the first semester of 2015. (30.06.2016: 48.2%, 30.06.2015 49.1%)

The impairment losses and provisions to cover credit risk amounted to €605 million compared to €2,099 million in the first semester of 2015 which significant impairment losses were recognized, after taking into consideration the special conditions that existed and affected the estimations for the recoverability of loans of the reporting period.

Profit/(loss) after income tax from continuing operations amounted to losses of €20.6 million and the profit/(loss) after income tax from discontinued operations amounted to profits of €1.6 million, which concern the Bulgaria Branch and the subsidiary Alpha Bank AD Skopje.

Participation in the program for the enhancement of liquidity for the Greek economy

In the context of the program for the enhancement of the Greek economy's liquidity, according to Law 3723/2008, the Bank proceeded with:

•    The issuance of senior debt securities guaranteed by the Greek State amounting to €5.15 billion.

These securities are pledged to the European Central Bank for liquidity purposes.

Other information

The Bank's Ordinary General Meeting of the Shareholders on 30.6.2016 decided the non distribution of dividend to the common shareholders.

Risk Management

Alpha Bank Group has established a framework of thorough and discreet management of all kinds of risks facing on the best supervisory practices and which is based on the common European legislation and the current system of common banking rules, principles and standards is improving continuously over the time in order to be applied in a coherent and effective way in a daily conduct of the Bank's activities within and across the borders making effective the corporate governance of the Bank.

The main objective of the Group during and the first half of 2016 was to maintain the high quality internal corporate governance and compliance within the regulatory and supervisory provisions risk management in order to ensure the confidence in the conduct of its business activities through sound provision of suitable financial services.

Since November 2014, the Group falls within the Single Supervisory Mechanism (SSM) - the new financial supervision system which involves the European Central Bank (ECB) and the Bank of Greece - and as a major banking institution is directly supervised by the European Central Bank (ECB).

The Single Supervisory Mechanism is working with the European Banking Authority (EBA), the European Parliament, the Eurogroup, the European Commission and the European Systemic Risk Board (ESRB) within their respective competences.

Moreover, since January 1st, 2014, EU Directive 2013/36/EU of the European Parliament and of the Council dated June 26, 2013 along with the EU Regulation 575/2013/EU dated June 26, 2013 ("CRD IV") are effective. The Directive and the Regulation gradually introduce the new capital adequacy framework (Basel III) of credit institutions.

Within this regulatory and supervisory risk management framework, Alpha Bank Group continues to strengthen its internal governance and its risk management strategy and redefining its business model in order to achieve full compliance within the increased regulatory requirements and the extensive guidelines. The latest ones are related to the governance of data risks, the collection of such data and their integration in the required reports of the management and supervisory authorities.

The Group's new approach constitutes of a solid foundation for the continuous redefinition of Risk Management strategy through (a) the determination of the extent to which the Bank is willing to undertake risks (risk appetite), (b) the assessment of potential impacts of activities in the development strategy by defining the risk management limits, so that the relevant decisions to combine the anticipated profitability with the potential losses and (c) the development of appropriate monitoring procedures for the implementation of this strategy through a mechanism which allocates the risk management responsibilities between the Bank units.

More specifically, the Group taking into account the nature, the scale and the complexity of its activities and risk profile, develops a risk management strategy based on the following three lines of defense, which are the key factors for its efficient operation:

•   Development Units of banking and trading arrangements {host functions and handling customer requests, promotion and marketing of banking products to the public (credits, deposit products and investment facilities), and generally conduct transactions (front line)}, which are functionally separated from the requests approval units, confirmation, accounting and settlement.

    They constitute the first line of defense and 'ownership' of risk, which recognizes and manages risks that will arise in the course of banking business.

•   Management and control risk and regulatory compliance Units, which are separated between themselves and also from the first line of defense.

    They constitute the second line of defense and their function is complementary in conducting banking business of the first line of defense in order to ensure the objectivity in decision-making process, to measure the effectiveness of these decisions in terms of risk conditions and to comply with the existing legislative and institutional framework, by involving the internal regulations and ethical standards as well as the total view and evaluation of the total exposure of the Bank and the Group to risk.

•   Internal audit Units, which are separated from the first and second line of defense.

    They constitute the third line of defense, which through the audit mechanisms and procedures cover an ongoing basis of all operation of the Bank and the Group. They ensure the consistent implementation of the business strategy, by involving the risk management strategy through the true and fair implementation of the internal policies and procedures and they contribute to the efficient and secure operation.

Credit Risk

Credit risk arises from the potential weakness of borrowers' or counterparties' to repay their debts as they arise from their loan obligations to the Group.

The primary objective of the Group's strategy for the credit risk management is to achieve the maximization of the adjusted relative to the performance risk, by ensuring at the same time the conduct of daily business within a clearly defined framework of granting credit. This framework has been supported by strict credit criteria and it is the continuous, timely and systematic monitoring of the loan portfolio and the maintenance of the credit risks within the framework of acceptable overall risk limits.

The framework of the Group's credit risk management is developed based on a series of credit policy procedures, systems and measurement models by monitoring and auditing models of credit risk which are subject to an ongoing review process. This happens in order to ensure full compliance with the new institutional and regulatory framework as well as the international best practices and their adaptation to the requirements of respective economic conditions and to the nature and extent of the Group's business.

The indicative actions below represent the development and improvement that occurred with respect to the aforementioned framework:

•   Ongoing upgrade of Wholesale and Retail Banking Credit Policies in Greece and on abroad in order to be adapted in the given macroeconomic and financial conditions of the Group's risk profile as well as in the acceptable maximum risk appetite limits totally for each kind of risk.

•   Ongoing update of the credit rating models for corporate and retail banking in Greece and on abroad in order to ensure their proper and effective operation.

•   Update of the impairment policy for Wholesale and Retail Banking.

•   Centralized and automated approval process for retail banking applications in Greece and abroad.

•   Determining a specific framework for the management of overdue and non-performing loans, in addition to the existing obligations, which arise from the Executive Committee Act 2015/227 of January 9, 2015 of the European Committee for amending Executive Committee Act (EU) No. 680/2014 of the Committee for establishing executive technical standards regarding the submission of supervisory reports by institutions in accordance with the regulation (EU) No. 575/2013 of the European Parliament and the Council and Executive Committee Act of Bank of Greece, P.E.E. 42/30.5.2014 and the amendment of this with the Executive Committee Act of Bank of Greece, P.E.E. 47/9.2.2015, which define the framework of supervisory commitments for the management of overdue and non-performing loans from credit institutions.

    This framework develops based on the following pillars:

1.   The establishment of an independent operation management for the "Troubled assets" (Troubled Asset Committee). This is achieved by the representation of the Administrative Bodies in the Evaluation and Monitoring of Denounced Customers Committee as well as in the Arrears Councils,

2.   The establishment of a separate management strategy for these loans, and

3.   The improvement of IT systems and processes in order to comply with the required periodic reporting to management and supervisory mechanisms.

•   Systematic and periodic credit control of Wholesale and Retail Banking credit facilities.

•   Systematic estimation and assessment of credit risk per counterparty and per sector of economic activity.

•   Periodic stress tests as a tool of assessment of consequences of various macroeconomic scenarios to establish the business strategy, the business decisions and the capital position of the Group. The stress tests are performed according to the requirements of the regulatory framework and they are fundamental parameters of the Group's credit risk management Policy.

Additionally, the following actions are in progress in order to enhance and develop the internal system of credit risk management:

•   Continuation of the preparation for the transition process for the Bank and the Group companies  to the Advanced Method for the Calculation of Capital Requirements against Credit Risk. For the purpose of this transition, the Advanced Internal Ratings-Based Approach method will be used with regards to the corporate loan portfolios, retail banking, leasing and factoring.

•   Development of the necessary processes and models for the implementation of IFRS 9 Financial instruments, which will be applied on January 1st, 2018.

•   Establishment of Environmental and social Risk Management Policy in the legal entities credit universe procedures, which is an integral part of the overall risk management framework, fully aligned with the current regulatory framework, the European legislation and the international best practices.

•   Expansion of systematic and periodic credit control of Wholesale and Retail Banking credit facilities including the non-performing sector.

•   Reinforcing the completeness and quality control mechanism of crucial fields of Wholesale and Retail Credit for monitoring, measuring and controlling of the credit risk.

Liquidity and interest rate risk of banking portfolio

In the first semester of 2016 the imposition of the capital controls in banking system, which were imposed for the first time in June 29th, 2015, remains (even though slightly relaxed) resulting to the reduction of capital sources from the banking system. In the first half of 2016, Bank's deposits dropped slightly (0.16%), while the Group's deposits showed a trend for increase by 0.74% with most important participation that of our subsidiary in Romania. As a result from these developments on 30.6.2016 Bank's financing from the Eurosystem raised to €22.7 billion, showing a decrease by €1.8 billion compared to 31.12.2015. Correspondingly, the contribution of emergency funding mechanism by Bank of Greece (ELA) to the total Eurosystem funding reached the level of €16.9 billion. On June 29, 2016 the ECB re-issued a waiver for Greek Government Debt to be used as collateral for ECB funding.  As a result, Alpha Bank pledged €2.4 billion face value of Greek Government Bonds and €1,1 billion of Greek Government T-bills to the ECB, with a subsequent reduction of the ELA collateral.  The cash value of the collaterals was €1.8 billion and it was used to repay ELA funding. Access to cheaper ECB funding will have a positive effect on Net Interest Income.

Under the new requirements of the liquidity Regulatory Environment (Basel III) the liquidity sources are systematically monitored. During 2016 and on a monthly basis the Bank submits the Liquidity Coverage Ratio and performed the Net Stable Funding Ratio. On quarterly basis, Bank provides information to Single Supervisory Mechanism (SSM) related with the funding sources along with the impact on Groups profitability due to interest rate crisis scenarios. Furthermore, starting in April 2016 the Bank submits to the Single Supervisory Mechanism (SSM) monthly reports for the additional liquidity monitoring metrics.

During the first half of 2016, Bank has updated the policies and procedures of the Recovery Plan along with the scenarios for the stress tests. Given the compromised situation of the Greek economy, the Bank's subsidiaries have been asked by their local supervisors, to renew and update, apart from the Contingency Funding Plans, the Recovery Plans as well.

The continuous update of the ALM system, in which all Bank's reports are based, is essential for the evolution and the development of the product mix of the Bank, by taking into account the current structure of competition and the economic conditions. In particular, the audit and the finalization of the conventions of repricing and of movement of non-maturing assets-liabilities are parts of the efficient and the effective management of asset liability risk. In cooperation with the IT Department is about to start a project in order to implement the Back testing for the ALM conventions for maturity and reprising of the accounts without contractual maturity date. The Bank has updated the ALM balance sheet in order to follow up in a more effective way the gap and the basis risk.

The interbank financing (short, medium to long-term) and the Early Warning Indicators of the Bank and of Group's subsidiaries and foreign branches are monitored on a daily basis with reports and checks in order to capture daily variations.

Due to the criticality of the Greek economy, stress tests are incurred frequently for liquidity purposes in order to assess potential outflows (contractual or contingent). The purpose of this process is to determine the level of the immediate liquidity which is available in order to cover Bank's needs.

Over and above, during the first half of 2016, the extreme scenarios for the interest rate risk were enhanced according to the new supervisory framework for interest rate risk monitoring for Bank's portfolio "Interest Rate Risk in the Banking Book" (BIS, April 2016).

Moreover, the levels of the Risk Appetite & Risk Tolerance related to interest rate risk of the banking book were readjusted.

Market, Counterparty and Currency Risk

The Group has developed a strong set of control policies and procedures in accordance with the regulatory framework and international best practices to meet business needs that involve market and counterparty risk limiting adverse impact on results and equity. The framework of methodologies and systems for the effective management of these risks is evolving on a continuous basis in accordance with the changing circumstances in the markets and in order to meet customer requirements.

The valuation of bonds and derivative positions are monitored on an ongoing basis. The terms are examined for each new position and an appropriate valuation methodology is developed, in case it is required. On a regular basis stress tests are conducted in order to assess the impact on results and equity of various scenarios in the market conditions where the Group operates.

A detailed structure for trading and investment position limits and counterparty limits have been adopted and implemented, that involve regular monitoring of trigger events in order to perform extra limit reviews. The limit usage is monitored on an ongoing basis and any limit breaches identified are reported officially.

For the mitigation of the market risk of the banking portfolio, hedging relationships using derivatives are applied and hedge effectiveness is tested on a regular basis.

In 2015, there were problems in conducting operations in foreign currency financing due to the restrictions on capital movements and the reduction or withdrawal of interbank credit lines, resulting in an increase in the Group open currency position. As market conditions improve during 2016, the Group gradually reduces these positions. During the first semester 2016 the counterparty credit and country risk manual was reviewed and it is gradually applied by the Group companies. The Group participates in the Targeted Review of Internal Models conducted by the European Central Bank due to the application of an internal model for the market risk capital requirement calculation and submitted the required questionnaire during the first semester 2016. Furthermore, the Group participated in the benchmarking of internal approaches regarding market risk, that was conducted by the European Banking Authority in cooperation with the European Central Bank, as well as the ad-hoc Quantitative Impact Study for Basel III monitoring regarding the application of the Fundamental Review of the Trading Book for market risk capital requirement calculation, that was conducted by the European Central Bank.

Operational Risk

In the context of the continuous improvement in the implementation of the operational risk management framework, the Bank proceeded rigorously to the expansion of preventive measures in order to identify and evaluate risk as well as, the enhancement of the process of collecting and analyzing operational risk events.

Specifically, the RCSA method of operational risk self-assessment has been implemented during the year in accordance with the general plan for the Bank and Group Companies. It is noted that this method provides the recognition and assessment of potential operational risks through the implementation of audits (residual risks). Further to the above the respective divisions proceed with the appropriate actions in order to mitigate the potential negative impacts.

Moreover, a project for the improvement of the Operational Risk Management Framework and the implementation of Advanced Techniques in Operational Risk Measurement  is in progress.

The operational risk events, the risk and control self-assessment results as well as, other operational risk issues are systematically monitored by the Bank and the Group Companies by the competent Operational Risk Management Committees which review the relevant information and ensure the implementation of Operational Risk mitigation measures.

Management Non Performing Loans (NPLs)

The quality of the Bank's loan portfolio deteriorated in the fourth quarter of 2008 till the fourth quarter of 2014 as a result of the prolonged recession of the Greek economy where GDP fell by 24.3%1. This had as a consequence an increase of the non-performing loans (NPL) in all individual portfolios. In response to these challenges, the Bank focused on three key prevention strategies of NPLs:

•   Focus on enhancing recovery efforts, particularly in relation to the borrowers in early deliquencies

•   Improvement and enhancement of tangible collaterals

•   Offering of forbearance products to borrowers in an effort to alleviate short-term financial difficulties. This ensures that the Bank could complete these products, if necessary, once a more stable macroeconomic environment allows for a better assessment of the financial capacity for the borrowers.

However, in a very challenging economic environment, the Bank constantly reviews and adjusts its strategy for the management of NPLs. During 2014 and 2015, the Bank has implemented a major change in the management infrastructure  and its NPL strategy, using Bank of Greece recommendations  for non-performing loans (Troubled Asset Review) and the Act 47 of the Executive Committee.

The development and launch of targeted long-term arrangements represents a significant shift from the past, where the focus was more on short-term arrangements. In addition, efforts for the increased collectability and improved collateral levels remain a key aspect of the Bank's strategy.

At the same time key operating indicators were adjusted and updated accordingly:

•   Organizational restructuring: Major re-emgineering aiming at creating and developing appropriate and independent management structures, which in tandem with improvements in the overall governance structure, provide increased control over governance as well as the implementation of evidence-based practices and policies regarding the management of past due portfolio.

 

1   ELSTAT http://www.statistics.gr/portal/page/portal/ESYE/PAGE-themes?p_param=A0704&r_param=SEL84&y_param=TS&mytabs=0, table 13



 

•   Segmentation and Portfolio Analysis: clearly defined and detailed strategies are in progress, including a strict and well defined segmentation framework.

•   Flexible and upgraded modification products and final settlement solutions (for example out of court settlements).

•   Focused human resources management with specialised teams and targeted training.

•   Significant IT investment and automated decision-making tools (for example NPV calculators)

These functional changes are related to major strategic movements, and more specifically:

•   Joint Venture with Aktua (which is a specialized provider of loan services, group member of Centerbridge). This joint venture, is expected to start its operations in the first quarter of 2017. This action will allow the Bank to manage more effectively the portfolio of the non-performing loans as well as the real estate which is under its ownership (REO).

•   Agreement with Eurobank, EBRD and KKR Credit for assigning the management of large corporate credit and equity exposures to Pillarstone, with the aim to provide operational expertise and fresh long term capital, so as to help companies stabilize, recover and grow. This innovative platform is anticipated to become operational within 2016. 

•   Loss Budget allocation framework: the Bank, in collaboration with an international consultant, has formulated a granular loss budget allocation framework o facilitate the implementation of its strategy for the restructuring of the portfolio of non-performing loans. This framework provides for:

i.    Loss allocation into sub-portfolios in order to achieve better non-performing loans management objectives.

ii.    Control and monitoring of key performance indicators of the Bank's NPLs management strategy

iii.   Identification of the most suitable resolution strategies per segment

•   Property Repossession Strategy (REO): Evaluation of the existing Property Repossession strategy in order to determine the best way to maximize their value for the Bank in the current economic environment.

Some of the above initiatives are already in place (e.g, organization, systems), while others have been already developed and implemented over the past months.

In addition, it is expected that the above initiatives will also benefit from the changes in the Greek legislative framework and the improvement in the economic climate.

More specifically:

•   Structural Reforms: The implementation of the planned structural reforms, as they are stated in the third loan agreement, is expected to create the necessary conditions for the banks in order to implement the best possible way for their strategy. Particularly, an expanded judicial reform, the new civil procedure code, the changes regarding the residential property either the auction suspension removal of the principal residence or the private creditors alleviation are some of them.

•   Improved macroeconomic environment forecast: The estimated improvement of the Greek economy, in conjunction with the eventual lifting of capital controls, is expected to improve the ability of borrowers to respect their repayment schedules. It is also expected that they will enhance the reliability of the planned business projects, by enhancing the value of the existing collaterals.

Administrative Structure Division - Arreas Management

Having realized the strategic need to focus on NPL management, the Bank has embarked on an effort to streamline the monitoring functions and the management of past due exposures. Dedicated teams have been established within the Bank to monitor the evolution of a wide range of NPL-related strategies and metrics within the Bank's pre-defined NPL Strategy.

Organisation Structure and Corporate Governance

Since 2009 discrete units for the management of Retail and Wholesale NPLs have been established and they are  key pillars for the Bank. These independent Units report directly to the Bank CEO through the Directors of each division. Moreover, they are responsible for all the areas which are related to the loan management - such as monitoring the portfolio and the front line services. Through those Units, the Bank has achieved the segregation of arrears management, from the Relationship Management and the Approval Authorities, by combining automated and mass procedures for portfolio's low-risk segments and a case by case management of the portfolio's more complex and higher-risk segments.

Furthermore, the establishment of the Troubled Assets Committee (TAC) has also contributed to the strategic alignment of the Retail & Wholesale NPL strategy.

Exposure management of arrears strategy

Investing in the organizational structure of the arrears units, the Bank has developed a strategic framework for the troubled assets in line with the Act 47 / 09.02.2015 of the Executive Committee of the Bank of Greece and the banks' Code of Conduct.

The procedures are defined based on the delinquency bucket and / or whether the borrower is viable or not (Going Concern vs. Gone Concern status). In this way, further segmentation of the non-performing portfolio by using financial indicators and several models has been achieved. The policies and procedures of sophisticated control mechanisms on the front line processes, such as daily monitoring of collection companies and by strengthening the control mechanisms for collection agencies and law firms (including the frequent on-site visits) are key pillars of the management of the non-performing loans for the Bank's management.

The TAC plays a pivotal role in setting and monitoring of the overall NPL strategy

Prospects for the future

The year 2016 could be considered as the beginning of a new face that will lead the country, out of the economic crisis, to a sustainable growth. However, this requires: (a) the continuation of fiscal consolidation in order to achieve the fiscal primary surplus target of 3.5% of GDP in 2018, (b) the rapid implementation, with continuity and consistency, of reforms in the goods and services markets and in the functioning of the public sector, the utilization of public property and the acceleration of privatizations, (c) the encouragement of business investment by ensuring a stable and friendly environment to entrepreneurship.

In this context, the active management of non-performing loans in conjunction with the reduction in funding costs of the Bank and the already improved from the first semester expenses to income ratio, is expected to gradually lead the Group to profitability.

Related parties

According to the corresponding regulatory framework, this report must include the main transactions with related parties. All the transactions between related parties, of the Bank and the Group companies, are performed in the ordinary course of business, conducted according to market conditions and are authorized by corresponding management personnel. There are no other material transactions between related parties beyond those described in the following paragraph.

a. The outstanding balances of the Group transactions with key management personnel which is composed by members of the Board of Directors and the Executive Committee of the Bank, as well as their close family members and the companies relating to them, as well as the corresponding results from those transactions are as follows:

Amounts in thousants of euro

Loans and advances to customers

10,001

Due to customers

26,780

Employee defined benefit obligations

221

Letters of guarantee and approved limits

10,931

Interest and similar income

50

Fee and commission income

68

Interest expense and similar charges

31

Fees paid to key management and close family members

1,753

b. The outstanding balances and the corresponding results of the most significant transactions of the Bank with Group companies are as follows:


α. subsidiaries

Amounts in thousants of euro

Name

Assets

Liabilities

Income

Expenses

Letters of guarantee and other guarantees

Banks






  1. Alpha Bank London Ltd

16,405

11,377

5,262


1,560

  2. Alpha Bank Cyprus Ltd

187,689

235,261

739

10

60,212

  3. Emporiki Bank Cyprus Ltd






  4. Alpha Bank Romania S.A.

1,283,895

160,589

870

1,597

333,859

  5. Alpha Bank AD Skopje



37



  6. Alpha Bank Srbija A.D.

143,398

26,758

977

96

6,083

  7. Alpha Bank Albania SH.A.

15,863

20,946

205

109


Leasing companies






  1. Alpha Leasing A.E.

199,449

8,898

2,468

87


  2. ABC Factors A.E.

444,376

483

11,378


52,463

Investment Banking






  1. Alpha Finance A.E.Π.Ε.Υ.

140

14,555

459

276

56

  2. SSIF Alpha Finance Romania S.A.


15




  3. Alpha Ventures Α.Ε.


35,919

3

160


  4. Alpha A.E. Ventures Capital Management - ΑΚΕS


2,081

13

8


  5. Emporiki Ventures Capital Developed Markets Ltd






  6. Emporiki Ventures Capital Emerging Markets Ltd


394






α. subsidiaries                                                                                                                                Amounts in thousants of euro

Name

Assets

Liabilities

Income

Expenses

Letters of guarantee and other guarantees

Asset Management






 1. Alpha Asset Management Α.Ε.D.Α.Κ.

11,744

41,107

13,838

160


Insurance






  1. Alpha Insurance Agents Α.Ε.

4,990

7,017

4,990

25


  2. Alphalife A.A.E.Z.

393

593

583

990


Real estate and hotel






  1. Alpha Astika Akinita Α.Ε

334

58,398

500

2,750


  2. Ionian Hotel Enterprises Α.Ε.

67,347

5,658

861

146


  3. Oceanos Α.Τ.Ο.Ε.Ε.


2,749


11


  4. Emporiki Development and Real Estate Management A.E.


48,712


253


  5. Alpha Real Estate Bulgaria E.O.O.D.






  6. Chardash Trading E.O.O.D.




290


  7. Alpha Investment Property Chalandriou Α.Ε.

19,254

22,514

173

4


  8. Alpha Investment Property Attikis Α.Ε.

6,377

1

83



  9. Alpha Investment Property Attikis II Α.Ε.


612




10. Alpha Investment Property Amarousion Ι Α.Ε.

1,530

19,493

12

4


11. Alpha Investment Property Amarousion ΙΙ Α.Ε.

478

13,173

4

2


12. Stockfort Ltd

23,369

3

215



13. AGI-RRE Zeus S.R.L.

31,649


301



14. AGI-RRE Poseidon S.R.L.

13,041


124



15. AGI-BRE Participations 1 E.O.O.D.

4,623


52



16. AGI-BRE Participations 2 E.O.O.D.

8,811


91



17. AGI-BRE Participations 2BG  E.O.O.D.

2,014


28



18. AGI-BRE Participations 3 E.O.O.D.

19,736


179



19. AGI-BRE Participations 4 E.O.O.D.






20. APE Fixed Assets Α.Ε.


7




21. HT-1 E.O.O.D.

317


8



22. SC Carmel Residential S.R.L.

6,759


123



23. AGI - RRE Hera S.R.L.

12,248


119



24. Alpha Investment Property Neas Kifisias Α.Ε.

3,361

900

27



25. Alpha Investment Property Kallirois Α.Ε.

588

988

5



26. Alpha Investment Property Leivadias Α.Ε.

4,506

153

91



27. Asmita Gardens S.R.L.






28. Alpha Investment Property Kefalariou Α.Ε.


20




29. Ashtrom Residents S.R.L.

9,735





30. AGI-BRE Participations 5 E.O.O.D.






31. Cubic Center Development S.A.

27,569





32. Alpha Investment Property Neas Erythreas Α.Ε.

10,000

1,571




33. Anaplasis Plagaias Α.Ε.

15,068


703



34. Alpha Real Estate Services S.R.L.


10




Special purpose and holding entities






  1. Alpha Credit Group Plc


9,014




  2. Alpha Group Jersey Ltd

21

15,273



15,542

  3. Alpha Group Investments Ltd


24,921




  4. Ionian Holdings Α.Ε.

56,034

332,614

56,034

1,431


  5. Ionian Equity Participations Ltd

775

424




  6. Emporiki Group Finance Plc


1,289




  7. AGI - RRE Participations 1 Ltd


1,157




  8. Alpha Group Ltd


263,863


36


  9. Katanalotika Plc

1,187





10. Epihiro Plc


1,253




11. Irida Plc

331,982

44,784

444



12. Pisti 2010-1 Plc


142




13. Alpha Shipping Finance Ltd

5

257,530

2,333

6,541


14. Umera Ltd

417,354

22,257

773

38

9,660

15. AGI-RRE Poseidon Ltd

38,006


317



 



α. subsidiaries                                                                                                                                Amounts in thousants of euro

Name

Assets

Liabilities

Income

Expenses

Letters of guarantee and other guarantees

16. AGI-BRE Participations 4 Ltd

3,381


85



17. AGI-RRE Artemis Ltd

1,731





18. Zerelda Ltd


1




19. AGI-Cypre Ermis Ltd

1,750,754

44,211

14,050


315,916

20. AGI-SRE Ariadni DOO

21,697





21. AGI-CYPRE ALAMINOS LTD

8,356


3



22. AGI-CYPRE TOCHINI LTD

1,287





23. AGI-CYPRE MAZOTOS LTD

7,410





Other companies






1. Kafe Alpha A.E.


170

8

142


2. Alpha Supporting Services Α.Ε.


31,196

280

3,398


3. Real Car Rental A.E.


46




4. Zerelda Ltd


1




5. Evisak Α.Ε.


885


3


6. Emporiki Management Α.Ε.

15

1,985

24

7


7. Alpha Bank Notification Services Α.Ε.

5

382

6

150


 

Β. JOINT VENTURES

  1. APE Commercial Property Α.Ε.

4

13,652

1

62


  2. APE Investment Property Α.Ε.

149,262

6,918

2,456

24


  3. Alpha ΤΑΝΕΟ Α.Κ.Ε.S.


425




  4. Rosequeens Properties S.R.L.

5,398


400



  5. Aktua Hellas Holdings S.A.


21




 

C. ASSOCIATES

  1. AEDEP Thessalias and Stereas Ellados


60




  2. Banking Information Systems Α.Ε.


288




  3. Olganos Α.Ε.

3,044


5



 

Total

5,394,764

1,815,717

122,740

18,810

795,351

 

 

c. Other related party transactions

The outstanding balances and the corresponding results are analyzed as follows:

Amounts in thousants of euro


Assets

Liabilities

Income

Expenses

Employees Supplementary Funds - ΤΑP


2,345


16

Hellenic Financial Stability Fund  - HFSF



5


 

 

 

Athens, 30 August 2016

 

 

THE CHAIRMAN
OF THE BOARD OF DIRECTORS

 

 

VASILEIOS T. RAPANOS

I.D. No ΑΙ 666242


 

Interim Consolidated Financial Statements as at 30.6.2016

Interim Consolidated Income Statement

(Amounts in thousands of Euro)



From 1 January to

From 1 April to


Note

30.6.2016

30.6.2015*

30.6.2016

30.6.2015*

Interest and similar income


1,382,951

1,524,439

677,464

763,387

Interest expense and similar charges


(416,644)

(567,545)

(194,099)

(281,459)

Net interest income


966,307

956,894

483,365

481,928







Fee and commission income


182,447

194,511

94,063

96,380

Commission expense


(23,677)

(33,347)

(13,869)

(18,984)

Net fee and commission income


158,770

161,164

80,194

77,396







Dividend income


1,120

545

529

520

Gains less losses on financial transactions

2

60,038

35,962

56,999

10,005

Other income


27,275

30,576

14,921

16,979



88,433

67,083

72,449

27,504

Total income


1,213,510

1,185,141

636,008

586,828

Staff costs


(258,481)

(263,471)

(129,026)

(129,888)

Provision for voluntary separation scheme


(31,480)


(487)


General administrative expenses

3

(247,089)

(237,329)

(128,847)

(120,486)

Depreciation and amortization 


(49,495)

(51,537)

(23,632)

(25,921)

Other expenses


(16,274)

(2,208)

(12,706)

(1,311)

Total expenses


(602,819)

(554,545)

(294,698)

(277,606)

Impairment losses and provisions to cover credit risk

4

(604,828)

(2,098,842)

(349,710)

(1,672,696)

Share of profit/(loss) of associates and joint ventures


(1,967)

(3,987)

(506)

(1,997)

Profit/(loss) before income tax


3,896

(1,472,233)

(8,906)

(1,365,471)

Income tax

5

(24,447)

309,358

(9,540)

318,579

Profit/(loss) after income tax from continuing operations


(20,551)

(1,162,875)

(18,446)

(1,046,892)

Profit/(Loss) after income tax from discontinued operations

26

1,607

(89,208)

1,666

(89,353)

Profit/(loss), after income tax


(18,944)

(1,252,083)

(16,780)

(1,136,245)

Profit/(loss) attributable to:






Equity owners of the Bank






- from continuing operations


(20,650)

(1,163,042)

(18,502)

(1,046,923)

- from discontinued operations


1,607

(89,208)

1,666

(89,353)



(19,043)

(1,252,250)

(16,836)

(1,136,276)

Non-controlling interests






- from continuing operations


99

167

56

31

Earnings/(losses) per share:






Basic and diluted (€ per share)

6

(0.01)

(4.90)

(0.01)

(4.45)

Basic and diluted from continuing operations (€ per share)

6

(0.01)

(4.55)

(0.01)

(4.10)

Basic and diluted from discontinued operations (€ per share)

6

0.00

(0.35)

0.00

(0.35)

 

 

 

 

 

*       The figures of the Interim Consolidated Income Statement of the comparative periods have been restated due to modification of the presentation of legal expenses, the finalization of the Bulgaria Branch transfer terms and the presentation of Alpha Bank Skopje as a discontinued operation (notes 26 and 28).



 

Interim Consolidated Balance Sheet

(Amounts in thousands of Euro)


Note

30.6.2016

31.12.2015*

ASSETS




Cash and balances with Central Banks


1,486,533

1,730,327

Due from banks


2,121,309

1,976,273

Trading securities

8

2,590

2,779

Derivative financial assets


839,166

793,015

Loans and advances to customers

7

45,495,962

46,186,116

Investment securities




 - Available for sale

8

5,644,128

5,794,484

 - Held to maturity

8

44,746

79,709

 - Loans and receivables

8

3,683,411

4,289,482

Investments in associates and joint ventures


10,582

45,771

Investment property

9

628,290

623,662

Property, plant and equipment

10

823,731

860,901

Goodwill and other intangible assets

11

366,224

345,151

Deferred tax assets


4,421,863

4,398,176

Other assets


1,520,955

1,508,633



67,089,490

68,634,479

Assets held for sale

26

282,429

663,063

Total Assets


67,371,919

69,297,542

LIABILITIES




Due to banks

12

23,417,669

25,115,363

Derivative financial liabilities


1,659,398

1,550,529

Due to customers (including debt securities in issue)


31,667,039

31,434,266

Debt securities in issue and other borrowed funds

13

320,444

400,729

Liabilities of current income tax and other taxes


26,437

38,192

Deferred tax liabilities


23,213

20,852

Employee defined benefit obligations

14

87,674

108,550

Other liabilities


902,905

910,623

Provisions

15

335,968

298,458



58,440,747

59,877,562

Liabilities related to assets held for sale

26

9,322

366,781

Total Liabilities


58,450,069

60,244,343

EQUITY




Equity attributable to equity owners of the Bank




Share capital

16

461,064

461,064

Share premium


10,790,870

10,790,870

Reserves


189,762

300,086

Amounts recognized directly in equity for held for sale items


(122)

8,834

Retained earnings

16

(2,558,915)

(2,546,885)



8,882,659

9,013,969

Non-controlling interests


24,059

23,998

Hybrid securities

17

15,132

15,232

Total Equity


8,921,850

9,053,199

Total Liabilities and Equity


67,371,919

69,297,542

 

 

 

 

 

 

 

 

 

 

*    The figures of the Consolidated Balance Sheet of the comparative period have been restated due to the completion of the valuation of net assets of acquired subsidiary company (note 28).

Interim Consolidated Statement of Comprehensive Income

(Amounts in thousands of Euro)


Note

From 1 January to

From 1 April to



30.6.2016

30.6.2015*

30.6.2016

30.6.2015*

Profit/(loss), after income tax, recognized in the income statement


(18,944)

(1,252,083)

(16,780)

(1,136,245)

Other comprehensive income recognized directly in equity:






Amounts that may be reclassified to the income statement






Net change in available for sale securities' reserve


(20,838)

(328,119)

73,668

(127,829)

Net change in cash flow hedge reserve


(127,695)

63,745

(28,443)

153,944

Exchange differences on translating and hedging the net investment in foreign operations


(1,901)

596

1,199

(1,749)

Change in the share of other comprehensive income of associates and joint ventures



101


101

Income tax

5

38,635

62,563

(15,862)

(15,295)

Amounts that may be reclassified to the income statement from continuing operations


(111,799)

(201,114)

30,562

9,172

Amounts that may be reclassified to the income statement from discontinued operations


(40)

39

7

(10)

Amounts that may not be reclassified to the income statement


-

-

-

-

Total of other comprehensive income recognized directly in equity, after income tax

5

(111,839)

(201,075)

30,569

9,162

Total comprehensive income for the period, after income tax


(130,783)

(1,453,158)

13,789

(1,127,083)

Total comprehensive income for the period attributable to:






Equity owners of the Bank






- from continuing operations


(132,411)

(1,364,207)

12,123

(1,037,816)

- from discontinued opearations


1,567

(89,169)

1,626

(89,314)



(130,844)

(1,453,376)

13,749

(1,127,130)

Non controlling interests






-from continuing operations


61

218

40

47

 

 

 

 

 

 

 

*    The figures of the Consolidated Statement of Comprehensive Income of the comparative period have been restated due to the finalization of the Bulgaria Branch transfer terms, the completion of the valuation of net assets of acquired subsidiary company and the presentation of Alpha Bank Skopje as a discontinued operation (notes 26 and 28).



Interim Consolidated Statement of Changes in Equity

(Amounts in thousands of Euro)


Note

Share Capital

Share
Premium

Reserves

Retained earnings

Total

Non controlling interests

Hybrid securities

Total
Equity

Balance 1.1.2015


3,830,718

4,858,216

105,687

(1,142,801)

7,651,820

23,266

31,464

7,706,550

Changes for the period
1.1 - 30.6.2015










Profit for the period, after income tax





 (1,252,250)

 (1,252,250)

 167


 (1,252,083)

Other comprehensive income recognized directly in equity, after income tax




 (201,126)


 (201,126)

 51


 (201,075)

Total comprehensive income for the period, after income tax


-

-

 (201,126)

 (1,252,250)

 (1,453,376)

 218

 -

 (1,453,158)

(Purchases), (redemptions)/sales of hybrid securities, after income tax





 1,010

 1,010


 (1,729)

 (719)

Appropriation to reserves




1,599

 (1,599)

 -



 -

Balance 30.6.2015


 3,830,718

 4,858,216

 (93,840)

 (2,395,640)

 6,199,454

 23,484

 29,735

 6,252,673

Changes for the period
1.7 - 31.12.2015









 -

Profit for the period, after income tax





 (119,464)

 (119,464)

 93


 (119,371)

Other comprehensive income recognized directly in equity, after income tax




 401,839

 3,045

 404,884

 (36)


 404,848

Total comprehensive income for the period, after income tax


-

-

 401,839

 (116,419)

 285,420

 57

 -

 285,477

Decrease of ordinary shares nominal value


 (3,754,104)

 3,754,104



 -



 -

Share capital increase paid in cash


 232,825

 1,319,344



 1,552,169



 1,552,169

Share capital increase through capitalization of financial receivables


 151,625

 859,206



 1,010,831



 1,010,831

Share capital increase expenses, after income tax





 (43,506)

 (43,506)



 (43,506)

Effect due to change of the income tax rate for share capital increase expenses





 6,261

 6,261



 6,261

Purchases/sales and change of ownership interests in subsidiaries





 (457)

 (457)

457


 -

(Purchases), (redemptions)/sales of hybrid securities, after income tax





 3,797

 3,797


 (14,503)

 (10,706)

Appropriation to reserves




 921

 (921)

 -



 -

Balance 31.12.2015


461,064

10,790,870

 308,920

 (2,546,885)

 9,013,969

 23,998

 15,232

 9,053,199

 



 

(Amounts in thousands of Euro)


Note

Share Capital

Share
Premium

Reserves

Retained earnings

Total

Non controlling interests

Hybrid securities

Total
Equity

Balance 1.1.2016


 461,064

10,790,870

308,920

(2,546,885)

9,013,969

23,998

15,232

9,053,199

Changes for the period
1.1 - 30.6.2016










Profit for the period, after income tax





(19,043)

(19,043)

99


(18,944)

Other comprehensive income recognized directly in equity, after income tax




(111,801)


 (111,801)

 (38)


 (111,839)

Total comprehensive income for the period, after income tax


-

-

(111,801)

(19,043)

(130,844)

61

-

(130,783)

Share capital increase expenses, after income tax





(689)

(689)



(689)

(Purchases)/sales and change of ownership interests in subsidiaries




 (8,794)

8,794

-



 -

(Purchases), (redemptions)/sales of hybrid securities, after income tax





60

60


 (100)

 (40)

Appropriation of reserves




1,315

 (1,315)

-



-

Other





163

163



163

Balance 30.6.2016


 461,064

 10,790,870

189,640

(2,558,915)

8,882,659

24,059

15,132

8,921,850

 

 

 

 

 

 

*    The figures of the Consolidated Statement of Changes in Equity of the comparative period have been restated due the completion of the valuation of net assets of acquired subsidiary company (note 28).



 

Interim Consolidated Statement of Cash Flows

(Amounts in thousands of Euro)



From 1 January to


Note

30.6.2016

30.6.2015*

Cash flows from continuing operating activities




Profit/(loss) before income tax


3,896

 (1,472,233)

Adjustments for gains/(losses) before income tax for:



   

Depreciation/ impairment of fixed assets

9,10

27,400

 29,114

Amortization of intangible assets

11

22,095

 22,423

Impairment losses from loans, provisions and staff leaving indemnity


641,523

 2,140,817

(Gains)/losses from investing activities


(69,292)

 34,524

(Gains)/losses from financing activities


31,017

 54,269

Share of (profit)/loss of associates and joint ventures


1,967

 3,987



658,606

812,901

Net (increase)/decrease in assets relating to continuing operating activities:




Due from banks


(225,373)

 867,113

Trading securities and derivative financial assets


(45,962)

 217,710

Loans and advances to customers


298,866

 (849,764)

Other assets


2,562

 (90,108)

Net increase /(decrease) in liabilities relating to continuing operating activities:




Due to banks


(1,697,694)

 11,092,339

Derivative financial liabilities


(18,826)

 (58,901)

Due to customers


229,900

 (11,632,986)

Other liabilities


18,010

 (67,689)

Net cash flows from continuing operating activities before taxes


(779,911)

290,615

Income taxes and other taxes paid


(18,076)

 (30,601)

Net cash flows from continuing operating activities


(797,987)

260,014

Net cash flows from discontinued operating activities


(21,270)

10,551

Cash flows from continuing investing activities




Investments in associates and joint ventures


(98)

 (344)

Acquisitions during the period



 9,151

Amounts received from disposal of subsidiary



 15,392

Dividends received


1,120

 560

Acquisitions of fixed and intangible assets


(97,824)

 (42,692)

Disposals of fixed and intangible assets


44,176

 6,318

Net (increase)/decrease in investement securities


663,048

 (255,253)

Net cash flows from continuing investing activities


610,422

(266,868)

Net cash flows from discontinued investing activities


(24,390)

6,933

Cash flows from continuing financing activities




Receipts of debt securities in issue and other borrowed funds


577


Repayments of debt securities in issue and other borrowed funds


(82,194)

 (89,451)

(Purchases)/sales of hybrid securities


(15)

 (467)

Share capital increase expenses


(970)

   

Net cash flows from continuing financing activities


(82,602)

(89,918)

Effect of exchange rate differences on cash and cash equivalents


(24,489)

 1,843

Net increase/(decrease) in cash flows from continuing activities


(294,656)

(94,929)

Net increase/(decrease) in cash flows from discontinued activities


(45,660)

17,484

Cash and cash equivalents at the beginning of the period


1,328,133

1,194,244

Cash and cash equivalents at the end of the period


987,817

1,116,799

 


 

 

 

 

* The figures of the Interim Consolidated Statement of Cash Flows of the comparative period has been restated due to the finalization of the Bulgaria Branch transfer terms and the presentation of Alpha Bank Skopje as a discontinued operation (notes 26 and 28).

 



 

Notes to the Interim Consolidated Financial Statements

General Information


The Alpha Bank Group, which includes companies in Greece and abroad, offers the following services: corporate and retail banking, financial services, investment banking and brokerage services, insurance services, real estate management, hotel services.

The parent company of the Group is Alpha Bank A.E. which operates under the brand name Alpha Bank. The Bank's resistered office is 40 Stadiou Street, Athens and is listed in the General Commercial Register with registration number 223701000 (ex. societe anonyme registration number 6066/06/B/86/05). The Bank's duration is until 2100 but may be extended by the General Meeting of Shareholders.

In accordance with article 4 of the Articles of Incorporation, the Bank's objective is to engage, on its own account or on
behalf of third parties, in Greece and abroad, independently or collectively, including joint ventures with third parties, in any and all (main and secondary) operations, activities, transactions and services allowed to credit institutions, in conformity with whatever rules and regulations (domestic, community, foreign) may be in force each time. In order to serve this objective, the Bank may perform any kind of action, operation or transaction which, directly or indirectly, is pertinent, complementary or auxiliary to the purposes mentioned above.

The tenure of the Board of Directors which was elected by the Ordinary General Meeting of Shareholders on 27.6.2014 expires in 2018.

The Board of Directors as at 30.6.2016 consists of:

 

 


CHAIRMAN (Non Executive Member)

Vasileios T. Rapanos

VICE CHAIRMAN (Non Executive Independent Member)

Pavlos A. Apostolides **/****

EXECUTIVE MEMBERS

MANAGING DIRECTOR

Demetrios P. Mantzounis

EXECUTIVE DIRECTORS AND GENERAL MANAGERS

Spyros N. Filaretos (COO)

Artemios Ch. Theodoridis

George C. Aronis

NON-EXECUTIVE MEMBERS

Efthimios O. Vidalis

Ioanna E. Papadopoulou ****

NON-EXECUTIVE INDEPENDENT MEMBERS

Evangelos J. Kaloussis */***

Ioannis K. Lyras */**

Ibrahim S. Dabdoub **

Shahzad A. Shahbaz ***/****

Jan A. Vanhevel */***

NON-EXECUTIVE MEMBER
(in accordance with the requirements of Law 3723/2008)

Marica S. Ioannou - Frangakis

NON-EXECUTIVE MEMBER
(in accordance with the requirements of Law 3864/2010)

Panagiota S. Iplixian */**/***/****

SECRETARY

George P. Triantafyllides

 

At its meeting held on 28.7.2016, the Board of Directors of Alpha Bank elected Mr. Richard R. Gildea as Member of the Board of Directors of the Bank, for the remainder of its tenure, in replacement of Mrs Ioanna E. Papadopoulou who resigned.

 

 

 

*         Member of the Audit Committee

**        Member of the Remuneration Committee

***       Member of the Risk Management Committee

****      Member of Corporate Governance and Nominations Committee



 


The Ordinary General Meeting of Shareholders of 30.6.2016 has appointed for the fiscal year 2016 KPMG Certified Auditors A.E. as Certified auditors of the Bank, by the following:

a. Principal Auditors: Nikolaos E. Vouniseas

                               John A. Achilas

b. Substitute Auditors:    Michael A. Kokkinos

                               Anastasios E. Panayides

The Bank's shares are listed in the Athens Stock Exchange since 1925 and are ranked among the companies with the higher market capitalization. Additionally, the Bank's share is included in a series of international indices, such as MSCI Emerging Markets Index, the FTSE All World, the Stoxx Europe 600 and FTSE Med 100.

Apart from the Greek listing, the shares of the Bank are listed in the London Stock Exchange in the form of international certificates (GDRs) and they are traded over the counter in New York (ADRs).

Total common shares in issue as at 30 June 2016 were 1,536,881,200.

In Athens Stock Exchange are traded 1,367,706,054 common shares of the Bank, while the Hellenic Financial Stability Fund ("HFSF") possesses the remaining 169,175,146 common, registered, voting, paperless shares or percentage equal to 11.01% on the total of common shares issued by the Bank. The exercise of the voting rights for the shares of HFSF is subject to restrictions according to the article 7a of Law 3864/2010.

In addition, on the Athens Exchange there are 1,141,734,167 warrants that are traded each one incorporating the right of the holder to purchase 0,148173663047785 new shares owned by the HFSF.

During the first semester of 2016, the average daily volume per session for shares was € 20,970,465 and for warrants € 6,500.

The credit rating of the Bank performed by three international credit rating agencies is as follows:

•   Moody's: Caa3

•   Fitch Ratings: RD

•   Standard & Poor's: SD (from 2.8.2016 CCC+)

According to Law 4374 published in 1 April 2016, the obligation to publish quarterly financial statements for the first and third quarter of the financial year, pursuant to the provisions of Article 6 of Law. 3556/2007 before its amendment, was abolished.

Furthermore, according to No.8/754/14.04.2016 decision of the Hellenic Capital Market Commission with subject "Special Topics Periodic Reporting according to Law. 3556/2007", the obligation to publish Data and Information arising from the quarterly and semi-annual financial statements, as previously stated by the No. 4/507/28.4.2009 decision of the Hellenic Capital Market Commission Board of Directors, was abolished.

The financial statements have been approved by the Board of Directors on 30 August 2016. 



 

Accounting Policies Applied


1.1 Basis of presentation

The Group has prepared the condensed interim financial statements as at 30.6.2016 in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting, as it has been adopted by the European Union. The financial statements have been prepared on the historical cost basis. As an exception, some assets and liabilities are measured at fair value. Those assets are mainly the following:

-   Securities held for trading

-   Derivative financial instruments

-   Available for sale securities

-   The convertible bond issued by the Bank which is included in "Debt securities in issue held by institutional investors and other borrowed funds"

The financial statements are presented in Euro, rounded to the nearest thousand, unless otherwise indicated.

The accounting policies applied by the Group in preparing the condensed interim financial statements are consistent with those stated in the published financial statements for the year ended on 31.12.2015, after taking into account the following amendments to standards which were issued by the International Accounting Standards Board (IASB), adopted by the European Union and applied on 1.1.2016:

•   Amendment to International Financial Reporting Standard 11 "Joint Arrangements": Accounting for acquisition of interests in joint operations (Regulation 2015/2173/24.11.2015)

•   Amendment to International Accounting Standard 1 "Presentation of Financial Statements": Disclosure Initiative (Regulation 2015/2406/18.12.2015)

•   Amendment to International Accounting Standard 16 "Property, Plant and Equipment" and to International Accounting Standard 38 "Intangible Assets": Clarification of Acceptable Methods of Depreciation and Amortization (Regulation 2015/2231/2.12.2015)

•   Amendment to International Accounting Standard 16 "Property, Plant and Equipment" and to International Accounting Standard 41 "Agriculture": Bearer Plants (Regulation 2015/2113/23.11.2015)

•   Amendment to International Accounting Standard 27 "Separate Financial Statements": Equity Method in Separate Financial Statements (Regulation 2015/2441/ 18.12.2015)

•   Improvements to International Accounting Standards - cycle 2012-2014 (Regulation 2015/2343/15.12.2015)

The adoption of the above amendments by the Group, an analysis of which is presented in note 1.1 of the Group Financial Statements as at 31.12.2015, had no impact on its financial statements.

The adoption by the European Union, by 31.12.2016, of new standards, interpretations or amendments, which have been issued or may be issued during the year by the International Accounting Standards Board (IASB), and their mandatory or optional adoption for periods beginning on or after 1.1.2016, may affect retrospectively the periods presented in these interim financial statements.

1.2 Estimates, decision making criteria and significant sources of uncertainty

The Group, in the context of applying accounting policies and preparing financial statements in accordance with the International Financial Reporting Standards, makes estimates and assumptions that affect the amounts that are recognized as income, expenses, assets or liabilities. The use of estimates and assumptions is an integral part of recognizing amounts in the financial statements that mostly relate to the following:

Fair value of assets and liabilities

For assets and liabilities traded in active markets, the determination of their fair value is based on quoted, market prices. In all other cases the determination of fair value is based on valuation techniques that use observable market data to the greatest extent possible. In cases where there is no observable market data, the fair value is determined using data that are based on internal estimates and assumptions eg. determination of expected cash flows, discount rates, prepayment probabilities or potential counterparty default.

Impairment losses of financial assets

The Group, when performing impairment tests on loans and advances to customers, makes estimates regarding the amount and timing of future cash flows. Given that these estimates are affected by a number of factors such as the financial position of the borrower, the net realizable value of any collateral or the historical loss ratios per portfolio, actual results may differ from those estimated. Similar estimates are used in the assessment of impairment losses of securities classified as available for sale or held to maturity.

Impairment losses of non - financial assets

The Group, at each year end balance sheet date, assesses for impairment non - financial assets, and in particular property, plant and equipment, investment property, goodwill and other intangible assets, as well as its investments in associates and joint ventures. Internal estimates are used to a significant degree to determine the recoverable amount of the assets, i.e. the higher between the fair value less costs to sell and the value in use.

Income Tax

The Group recognizes assets and liabilities for current and deferred tax, as well as the related expenses, based on estimates concerning the amounts expected to be paid to or recovered from tax authorities in the current and future periods. Estimates are affected by factors such as the practical implementation of the relevant legislation, the expectations regarding the existence of future taxable profit and the settlement of disputes that might exist with tax authorities etc. Future tax audits, changes in tax legislation and the amount of taxable profit actually realised may result in the adjustment of the amount of assets and liabilities for current and deferred tax and in tax payments other than those recognized in the financial statements of the Group. Any adjustments are recognized within the year that they become final.

Employee defined benefit obligations

Defined benefit obligations are estimated based on actuarial valuations that incorporate assumptions regarding discount rates, future changes in salaries and pensions, as well as the return on any plan assets. Any change in these assumptions will affect the amount of obligations recognized.

Provisions and contingent liabilities

The Group recognises provisions when it estimates that it has a present legal or constructive obligation that can be estimated reliably, and it is almost certain that an outflow of economic benefits will be required to settle the obligation. In contrast, when it is probable that an outflow of resources will be required, or when the amount of liability cannot be measured reliably, the Group does not recognise a provision but it provides disclosures for contingent liabilities, taking into consideration their materiality. The estimation for the probability of the outflow as well as for the amount of the liability are affected by factors which are not controlled by the Group, such as court decisions, the practical implementation of the relevant legislation and the probability of default of the counterparty, for those cases which are related to the exposure to off-balance sheet items.

The estimates and judgments applied by the Group in making decisions and in preparing the financial statements are based on historical information and assumptions which at present are considered appropriate. The estimates and judgments are reviewed on an ongoing basis in order to take into account current conditions, and the effect of any changes is recognized in the period in which the estimates are revised.

1.2.1 Going concern principle

The Group applied the going concern principle for the preparation of the financial statements as at 30.6.2016. For the application of this principle, the Group takes into consideration current economic developments in order to make projections for future economic conditions of the environment in which it operates. The main factors that cause uncertainties regarding the application of this principle relate to the adverse economic environment in Greece and abroad and to the liquidity levels of the Hellenic Republic and the banking system.

Specifically, the high degree of uncertainty that characterizes the internal economic environment in recent years, as a result of the prolonged recession of the Greek economy, led to a significant deterioration in the creditworthiness of corporate and individuals, to an increase of non performing loans and therefore to the recognition of significant impairment losses by the Bank and by the Greek banking system in general. Additionally, during the first semester of the previous year, the internal economic environment was adversely affected by the uncertainties that were created during the negotiations of the Hellenic Republic with the European Commission, the European Central Bank and the International Monetary Fund for the financing of the Hellenic Republic, a fact that led to significant outflows of deposits, to the imposition of capital controls and of a bank holiday which was announced on 28.6.2015 and lasted until 19.7.2015. Capital controls remain in place until the date of approval of the financial statements, while the detailed provisions for their application are amended where appropriate by the adoption of a legislative act.

At the same time the liquidity needs of Greek banks continue to be mostly satisfied by the emergency liquidity mechanisms of the Bank of Greece.

The completion, in the third quarter of 2015, of the negotiations of the Hellenic Republic for the coverage of the financing needs of the Greek economy, led to an agreement for new financial support by the European Stability Mechanism. The agreement provided for the coverage of the financing needs of the Hellenic Republic for the medium-term period, under the condition that economic reforms are made, while additionally it provided for the allocation of resources to cover the recapitalization needs of the banks as a result of their assessment by the Single Supervisory Mechanism. With respect to the Bank specifically, a recapitalization of a total amount of € 2,563 million took place in the fourth quarter of 2015, exclusively from private funds, as further analyzed in note 42 of the annual financial statements as at 31.12.2015.

In June of the current year the first evaluation of the Hellenic Republic financial support program was completed and the partial disbursement of the second installment of the program, amounting to € 10.3 billion, was approved. The first disbursement of € 7.5 billion took place in June and covered the short-term public debt servicing needs as well as the clearance of part of amounts overdue by the Hellenic Republic. The remaining amount of € 2.8 billion is expected to be disbursed within the second semester of 2016, provided that a series of prerequisite actions are completed. The completion of the first evaluation and the disbursement of installments are expected to contribute to the enhancement of the real economy and the improvement of investment prospects. The above, combined  with the continuation of reforms and the measures described in the Eurogroup statement for the enhancement of the sustainability of the Greek debt (note 1.2.2), are expected to contribute to the gradual improvement of the economic environment in Greece and to the return of the economy to positive growth rates.

In parallel to the above the Bank, in the context of its strategy to address the issue of non performing loans, is taking a series of actions and initiatives, as specifically mentioned in the relevant section of the Board of Director's Semi-annual Management Report, which, combined with the changes in the legislative framework, are expected to contribute to the effective management of the non performing loans portfolio.

With regards to the liquidity levels and funding costs of the Bank and the banking system in general, they have been positively affected by the reinstatement of Greek government securities in the perimeter of collaterals accepted by the European Central Bank, by the reduction of the haircut applied on eligible collaterals and by the ability to transfer part of the securities issued by the European Financial Stability Fund that the Bank holds to the European Central Bank, as mentioned in note 8 of the financial statements.

Based on the above and taking into account the Group's high capital adequacy and the ability of the Bank to access the liquidity mechanisms of the eurosystem, the Group estimates that the conditions for the application of the going concern principle for the preparation of its financial statements are met.

1.2.2 Estimation of the Group's exposure to the Hellenic Republic

The Group's total exposure to Greek Government securities and loans related to the Hellenic Republic has not changed significantly compared to what is stated in note 41.1 of the consolidated financial statements as at 31.12.2015. The main uncertainties regarding the estimations for the recoverability of the Group's total exposure relate to the debt service capacity of the Hellenic Republic, which, in turn, is affected by the development of the macroeconomic environment in Greece and the Eurozone as well as by the levels of liquidity of the Hellenic Republic.

Following the successful outcome of the negotiations of the Hellenic Republic for the coverage of the financing needs of the Greek economy, which were completed with the signing of a relative agreement with the European Stability Mechanism on 19.8.2015, a three-year funding (which could amount to € 86 billion) was ensured, provided that specific commitments that relate to the achievement of specific financial targets and the implementation of reforms in the Greek economy will be respected. The financing agreement with the European Stability Mechanism is expected to cover the financing needs of the Hellenic Republic and in parallel to contribute to the growth of the Greek economy. In addition, it was agreed that upon the first positive assessment of the program, which was completed in June of the current year, measures will be taken for Greek debt relief in order to enhance its sustainability.

Pursuant to the above, in the Eurogroup of 9.5.2016 the framework based on which the sustainability of the Greek debt will be assessed was set. In the Eurogroup of 24.5.2016 the measures for the enhancement of the sustainability of the Greek debt were further specified, separately for the short, the medium and the long term. Based on this framework, under the baseline scenario, gross financing needs of the Hellenic Republic should remain below 15% of GDP during the post programme period for the medium term and below 20% of GDP thereafter. By taking these measures, the finalization of which is expected in subsequent meetings of the Eurogroup, it is estimated that the service capacity of the Greek debt will be improved.

Based on the above, the Group has not recognized impairment losses on the Greek Government securities that it holds as at 30.6.2016, however, it assesses the developments relating to the Greek Government debt in conjunction with the market conditions and it reviews its estimations for the recoverability of its total exposure at each reporting date.

1.2.3 Recoverability of deferred tax assets

The Group recognizes deferred tax assets to the extent that it is probable that it will have sufficient future taxable profit available, against which, deductible temporary differences and tax losses carried forward can be utilized. The amount of deferred tax assets recognized in the consolidated financial statements as at 30.6.2016 has not changed significantly compared with the corresponding amount of 31.12.2015. Therefore, what is stated in note 1.31.3 of the annual financial statements of 31.12.2015, regarding the main categories of deferred tax assets recognized is also applicable to these financial statements. In addition, with regards to the methodology applied for the assessment of recoverability of deferred tax assets, what is stated in the above note of the annual financial statements applies, taking also into account the factors that formulated the results of the first semester of the current year.

 

 

Income Statement

2. Gains less losses on financial transactions

 


From 1 January to

From 1 April to


30.6.2016

30.6.2015

30.6.2016

30.6.2015

Foreign exchange differences

6,000

 (14,109)

2,514

4,156

Trading securities





- Bonds

515

1,435

385

397

- Shares

 (148)

159

9

7

Investment securities:





- Bonds

14,036

 (52,212)

10,231

 (68,269)

- Shares

79,760

 (458)

74,354

 (458)

- Other securities

 (1,592)

 (23)

 (698)

19

From sale of holdings

 (1,695)

6,804

 (1,705)

 (25)

From sales of loans

10,876

 (10)

10,876

 (10)

Derivative financial instruments

 (20,644)

42,834

 (7,968)

23,730

Other financial instruments

 (27,070)

51,542

 (30,999)

50,458

Total

60,038

35,962

56,999

10,005


On June 21, 2016, Visa Inc. completed the acquisition of Visa Europe. According to the relevant contract (as amended on 10.05.2016), the date of completion of the transaction, Visa Inc. purchased from Visa Europe's members the shares they held due to their membership. The price for this acquisition consists of:

i.  The payment of a total amount of € 12.25 billion upon completion of the transaction.

ii. The distribution of preferred shares.

iii. The payment of the amount of € 1 billion on the third anniversary of the closing of the transaction plus interest.

The calculation of the transaction price was based on Visa Europe's net revenue contributed by each member for a specific period of time.

In this context, during the second quarter of the current period, the Group recognized as gains less losses on financial transactions result the amount of € 55.6 million which consists of the cash received at the closing of the transaction and the recognition of the present value of the deferred payment on the third anniversary.

In addition, the Group recognized during the year the preference shares of Visa Inc. acquired under the transaction. These shares, which were classified as available for sale, were recognized at a fair value of € 16.3 million and recorded in gains less losses on finacial transactions.

"Other financial instruments" includes a loss from Ioniki Hotel Enterprises A.E. valuation of € 36.4 million (Note 26).

 

3. General administrative expenses


From 1 January to

From 1 April to


30.6.2016

30.6.2015

30.6.2016

30.6.2015

Operating leases of buildings

21,884

22,351

10,836

10,976

Rent and maintenance of EDP equipment

10,224

10,224

5,080

5,201

EDP expenses

15,601

13,768

7,933

6,184

Marketing and advertisement expenses

11,063

10,277

6,558

6,726

Telecommunications and postage

11,981

10,421

6,106

4,784

Third party fees

21,628

23,881

11,990

11,564

Consultants fees

3,376

3,331

1,503

1,833

Contribution to the Deposit guarantee fund - Investment fund and Solvency Fund

31,363

21,461

15,576

10,655

Insurance

6,743

5,142

3,016

2,137

Consumables

3,044

3,138

1,450

1,843

Electricity

5,633

7,044

2,230

3,292

Third party fees for customer acquisition

26

56

18

32

Taxes (VAT, real estate etc)

36,446

37,351

18,714

19,557

Services from collection agencies

13,266

9,418

8,667

4,343

Building and equipment maintenance

4,497

4,473

2,418

2,470

Security

6,301

6,444

3,457

3,250

Cleaning fees

2,748

2,804

1,487

1,492

Other

41,265

45,745

21,808

24,147

Total

247,089

237,329

128,847

120,486

 


On 23.7.2015 under Law 4335/2015, the European Directive 2014/59 was incorporated in to Greek Law to establish a framework for the recovery and resolution of credit institutions and investment entities. In particular, the Resolution Scheme of Hellenic Deposit and Investment Guarantee Fund (HDIGF) is defined as the National Resolution Fund which within ten years (until 31 December 2024) should gradually, create a reserve equal to at least 1% of the deposits guaranteed by the HDIGF. From 1.1.2016, the Single Resolution Mechanism (SRM) is responsible for the resolution of credit institutions established in country-member states of the Eurozone. It operates in cooperation with the Single Resolution Fund (SRF), which will cover the resolution costs of non-sustainable credit institutions.

According to Law 4335/2015 (Article 98), credit institutions authorized to operate in Greece, including branches operating in third countries, should make at least an annual contribution to the Resolution Fund. According to Law 4370/2016 (Article 36), in case a credit institution enters the Resolution Fund or another ceases its participation in it during the fiscal year, the credit institution is obliged for its regular contribution for the fiscal year in proportion to the time of its operation. In addition with law 4370/2016, the Directive 2014/49 / EU of the European Parliament and the Decision of the Council of 16 April 2014 was incorporated into Greek law which enacts the same rules for all Deposit Guarantee Schemes intended to provide a uniform level of protection to all EU depositors and to ensure the same level of stability as regards the DGS.

The Single Resolution Board, determined that the 2016 contribution for credit institutions may provide irrevocable payment commitments amounting up to 15% of their total obligation which for the Bank amounts to € 21 million. These irrevocable payment commitments have to be fully covered by cash collateral. On 20.05.2016, the Bank signed a contract with the Single Resolution Board to provide irrevocable payment commitment and establish the necessary cash collateral for the 2016 contribution.

In the General Administrative Expenses of the first semester of 2015 there was not such contribution.


 



 

4. Impairment losses and provisions to cover credit risk

 


From 1 January to

From 1 April to


30.6.2016

30.6.2015

30.6.2016

30.6.2015

Impairment losses on loans and advances to customers (note 7)

619,815

2,109,150

360,712

1,680,474

Provisions to cover credit risk relating to off balance sheet items (note 15)

494

2,701

20

(145)

Recoveries

(15,481)

(13,009)

(11,022)

(7,633)

Total

604,828

2,098,842

349,710

1,672,696

 


The first semester of 2016 significantly burdened from the  recognition of impairment losses mainly for a large corporate Group of companies, taking into account the conditions,  the ongoing developments and the proposals made for the restructuring of loans until the publication of the financial statements as at 30.6.2016.

Respectively, the a' semester of 2015 was burdened with significant impairment losses, after taking into consideration the special conditions that existed in the Greek economy and affected the recoverability estimations of the loan portfolio, in the respected period and until the date of the publication of the 30.6.2015 financial statements.


 

 

5. Income tax


In accordance with Article 1 par 4 of Law 4334/2015 "Urgent prerequisites for the negotiation and conclusion of an agreement with the European Stability Mechanism (ESM)" the corporate income tax rate for legal entities increased from 26% to 29%. The increased rate will apply for profits arising in fiscal years commencing on or after 1 January 2015 on the absence of an explicit definition in the law regarding the retrospective application of income tax rate for profits of fiscal year 2014.

For the Bank's subsidiaries and branches operating in other countries, the applicable nominal tax rates for accounting periods 2015 and 2016 are as follows:

Cyprus                     12.5

Bulgaria                   10

Serbia                      15

Romania                  16

FYROM                   10

Albania                    15

Jersey                     10

United Kingdom        20  (from 1.4.2015)

In accordance with article 65A of Law 4174/2013, from 2011, the statutory auditors and audit firms conducting statutory audits to a Societe Anonyme (AE), are obliged to issue an Annual Tax Certificate on the compliance on tax issues. This tax certificate is submitted to the entity being audited within 10 days from the submission of the corporate income tax return, as well as, electronically to the Ministry of Finance, no later than 10 days following the date of the approval of the financial statements from the Ordinary Shareholders General Meeting. For fiscal years 2011 up to 2014 the Bank and its local subsidiaries have obtained the relevant tax certificate without any qualifications on the tax issues covered, whereas for year 2015 the tax audit has been completed and the Bank is expected to receive tax certificate without any qualifications. In accordance with article 56 of Law 4410/3.8.2016 for the fiscal years from 1.1.2016, the issuance of tax certificate is rendered optional.

The income tax in the income statement from continuing operations is analysed in the table below, while the income tax from discontinued operations is analysed in note 26:


 


From 1 January to

From 1 April to


30.6.2016

30.6.2015

30.6.2016

30.6.2015

Current

6,809

9,477

3,739

4,753

Deferred

17,638

(318,835)

5,801

(323,332)

Total

24,447

(309,358)

9,540

(318,579)

 



 

Deferred tax recognized in the income statement is attributable to temporary differences, the effect of which is analyzed in the table below:


From 1 January to

From 1 April to


30.6.2016

30.6.2015

30.6.2016

30.6.2015

Debit difference of Law 4046/2012

22,277

19,973

11,139

9,987

Write-offs, depreciation and impairment of fixed assets

6,660

9,874

3,301

5,092

Valuation/impairment of loans

(60,449)

(389,149)

(47,171)

(360,316)

Valuation of loans due to hedging

(640)

(550)

(348)

(334)

Employee defined benefit obligations and insurance funds

25,199

17,075

6,161

(216)

Valuation of derivatives

(6,053)

14,012

(2,569)

7,226

Effective interest rate

(279)

(832)

(87)

(311)

Fair value change of liabilities to credit institutions and other borrowed funds due to fair value hedge

3,471

(2,433)

2,264

(1,060)

Valuation/impairment of bonds and other securities

10,561

25,537

9,857

18,745

Tax losses carried forward

23,952

(29,089)

22,929

(13,126)

Other temporary differences

(7,061)

16,747

325

10,981

Total

17,638

(318,835)

5,801

(323,332)

 

A reconciliation between the nominal and effective tax rate is provided below:


From 1 January to


30.6.2016

30.6.2015


%


%


Profit/(loss) before income tax


3,896


(1,472,233)

Income tax (weighted average nominal tax rate)

94.74

3,691

25.74

(378,969)

Increase/(decrease) due to:





Non taxable income


(11,252)

0.16

(2,407)

Non deductible expenses


11,708

(2.82)

41,508

Tax losses carried forward

(13.73)

(535)

0.04

(611)

Other tax adjustments


20,835

(2.11)

31,121

Income tax (effective tax rate)


24,447

21.01

(309,358)

 


From 1 April to


30.6.2016

30.6.2015


%


%


Profit/(loss) before income tax


(8.906)


(1,365,471)

Income tax (weighted average nominal tax rate)

33.69

(3,000)

25.95

(354,342)

Increase/(decrease) due to:





Non taxable income


(10,899)

0.16

(2,177)

Non deductible expenses

48.42

(4,312)

(2.04)

27,892

Tax losses carried forward

4.79

(427)



Other tax adjustments


28,178

(0.74)

10,048

Income tax (effective tax rate)


9,540

23.33

(318.579)

 


According to article 5 of Law 4303/17.10.2014 "Ratification of the Legislative Act "Emergency legislation to replenish the General Secretary of Revenue upon early termination of office" (A 136) and other provisions", deferred tax assets of legal entities supervised by the Bank of Greece, under article 26 paragraphs 5, 6 and 7 of Law 4172/2013 that have been or will be recognized and are due to the debit difference arising from the PSI and the accumulated provisions and other general losses due to credit risk, with respect to existing amounts up to 31 December 2014, are considered final and settled claims against the State, if, the accounting result for the period, after taxes is a loss based on the audited and approved financial statements by the Ordinary Shareholders' General Meeting.

The inclusion in the Law is implemented by the General Meeting of Shareholders, related to tax assets from 2016 onwards and refers to the fiscal year 2015 and onwards, whereas it is envisaged the end of inclusion in the Law with the same procedure and after obtaining relevant approval from the Regulatory Authority.

According to article 4 of Law 4340/01.11.2015 "Recapitalization of financial institutions and other provisions of the Ministry of Finance" the above were amended regarding the time of the application which is postponed for a year. In addition, the amount of deferred tax asset which is included to the same legislation, is limited to the amount related to the debit charge of PSI and the provisions for credit risk, which have been accounted until 30 June 2015.

On 30 June 2016 the amount of deferred tax assets which is estimated to be within the scope of the aforementioned Law amounts to € 3,394,799 (31.12.2015: € 3.417.055).

 

 

Income tax of other comprehensive income recognized directly in Equity


From 1 January to


30.6.2016

30.6.2015


Before income tax

Income tax

After
income tax

Before income tax

Income tax

After
income tax

Amounts that may be reclassified to the Income Statement







Net change in available for sale securities' reserve

(20,838)

3,543

(17,295)

(328,119)

77,920

(250,199)

Net change in cash flow hedge reserve

(127,695)

37,126

(90,569)

63,745

(16,586)

47,159

Foreign exchange differences on translating and hedging the net investment in foreign operations

(1,941)

(2,034)

(3,975)

635

1,229

1,864

Change in the share of other comprehensive income of associates and joint ventures




101


101

Total

(150,474)

38,635

(111,839)

(263,638)

62,563

(201,075)

 


From 1 April to


30.6.2016

30.6.2015


Before income tax

Income tax

After
income tax

Before income tax

Income tax

After
income tax

Amounts that may be reclassified to the Income Statement







Net change in available for sale securities' reserve

73,668

(22,090)

51,578

(127,829)

25,396

(102,433)

Net change in cash flow hedge reserve

(28,443)

7,976

(20,467)

153,944

(40,038)

113,906

Foreign exchange differences on translating and hedging the net investment in foreign operations

1,206

(1,748)

(542)

(1,759)

(653)

(2,412)

Change in the share of other comprehensive income of associates and joint ventures




101


101

Total

46,431

(15,862)

30,569

24,457

(15,295)

9,162

 


During the first semester of 2016, "Retained earnings" includes a credit tax amount of € 281 which derives from the share capital increase expenses which were recognized in the same account and relates to the share capital increase which took place during 2015.

In addition, during the same period, "Retained earnings" includes deferred tax asset amount of € 24 which derives from (Purchases)/(Redemptions)/ Sales of hybrid securities. The respective amount for the first semester of 2015 was € 251 (deferred tax asset).




 

6. Earnings / (losses) per share


a. Basic

Basic earnings/(losses) per share are calculated by dividing the profit/(losses) after income tax attributable to ordinary equity owners of the Bank, by the weighted average number of outstanding ordinary shares, after deducting the weighted average number of treasury shares held by the Bank during the period.

For the calculation of basic earnings/(losses) per share, profit or loss for the period is adjusted with the deduction of the after-tax amount of dividends of those preference shares that have been classified in equity. The after-tax amount of preference dividends that is deducted is:

i.  The after-tax amount of any dividends of preference shares on non-cumulative dividend preference shares declared for distribution during the period.

 

ii. The after-tax amount of the dividends from preference shares for cumulative dividend preference shares required for the period, whether or not the dividends have been declared.

b. Diluted

Diluted earnings/(losses) per share is calculated by adjusting the weighted average number of ordinary shares outstanding to the presumed conversion amount of all dilutive potential ordinary shares. The Bank does not have any dilutive potential ordinary shares and in addition, based on the issuance terms of the convertible bond loan with Credit Agricole S.A., basic and dilutive earnings/(losses) per share should not differ.


.

 


From 1 Januray to

From 1 April to


30.6.2016

30.6.2015

30.6.2016

30.6.2015

Profit/(loss) attributable to Equity owners of the Bank

(19,043)

(1,252,250)

(16,836)

(1,136,276)

Weighted average number of outstanding ordinary shares

1,536,881,200

255,381,197

1,536,881,200

255,381,197

Basic and diluted earnings/(losses) per share (in € )

(0.0124)

(4.9035)

(0.0110)

 (4.4493)

 


From 1 Januray to

From 1 April to


30.6.2016

30.6.2015

30.6.2016

30.6.2015

Profit/(loss) from continuing operations attributable to Equity owners of the Bank

(20,650)

(1,163,042)

(18,502)

(1,046,923)

Weighted average number of outstanding ordinary shares

1,536,881,200

255,381,197

1,536,881,200

255,381,197

Basic and diluted earnings/(losses) per share from continuing operations (in € )

(0.0134)

 (4.5541)

(0.0120)

 (4.0995)

 


From 1 Januray to

From 1 April to


30.6.2016

30.6.2015

30.6.2016

30.6.2015

Profit/(loss) from discontinued operations attributable to Equity owners of the Bank

1,607

(89,208)

1,666

(89,353)

Weighted average number of outstanding ordinary shares

1,536,881,200

255,381,197

1,536,881,200

255,381,197

Basic and diluted earnings/(losses) per share from discontinued operations (in € )

0.0010

 (0.3493)

0.0011

 (0.3499)

 

The weighted average number of the ordinary shares as at 30.6.2015, has been retrospectively restated from the beginning of the year, after the decrease of the total number of shares due to the merger in proportion of 50 voting common shares of old nominal value to 1 voting common share of new nominal value which took place on November 2015.



 

Assets

7. Loans and advances to customers


30.6.2016

31.12.2015

Individuals



Mortgages

19,934,735

20,171,970

Consumer:



- Non-securitized

4,155,608

4,063,791

- Securitized

1,243,419

1,299,934

Credit cards:



- Non-securitized

705,031

720,016

- Securitized

544,701

565,583

Other

2,448

2,601

Total

26,585,942

26,823,895

Companies:



Corporate loans:



- Non-securitized

27,627,285

27,547,074

- Securitized

1,997,083

2,126,179

Finance leases (Leasing):



- Non-Securitized

372,291

378,398

- Securitized

313,107

315,201

Factoring

595,384

599,387

Total

30,905,150

30,966,239

Other receivables

325,320

417,737


57,816,412

58,207,871

Less:
Allowance for impairment losses (1)

(12,320,450)

(12,021,755)

Total

45,495,962

46,186,116

 

The Bank and Alpha Leasing A.E. have proceeded in securitization of consumer, corporate loans, credit cards and finance leases through special purpose entities controlled by them.

Based on the contractual terms and structure of the above transactions (e.g. allowance of guarantees or/and credit enhancement or due to the Bank owing the bonds issued by the special purpose entities), the Bank and Alpha Leasing A.E. retained in all cases the risks and rewards deriving from the securitized portfolios.

The Bank proceeded on 8.7.2015 to cancel an amount of € 3.75 billion of covered bonds which had been issued and secured with mortgage loans. As at 30.6.2016, the balance of the covered bonds amounts to € 5 million (note 13). The book value of mortgage loans provided as coverage for the above mentioned bonds amounted to € 16.7 million.

 

 

(1) n addition to the allowance for impairment losses regarding loans and advances to customers, a provision of € 5,200 (31.12.2015: € 4,713) has been recorded to cover credit risk relating to off-balance sheet items. The total provision recorded to cover credit risk amounts to € 12,325,650 (31.12.2015: € 12,026,468).



 

Allowance for impairment losses

Balance 1.1.2015

8,830,277

Impairment losses for the period from continuing operations (note 4)

2,109,150

Impairment losses for the period from discontinued operations

534

Transfers of accumulated provisions to assets held for sale

 (110,626)

Change in present value of the impairment losses from continuing operations

257,527

Change in present value of the impairment losses from discontinued operations

1,435

Foreign exchange differences

72,139

Loans written-off during the period

(157,712)

Balance 30.6.2015

11,002,724

Changes for the period 1.7. - 31.12.2015


Impairment losses for the period from continuing operations

938,157

Transfers of accumulated provisions to assets held for sale

 (1,286)

Change in present value of the impairment losses from continuing operations

290,469

Foreign exchange differences

 (17,358)

Loans written-off during the period

(190,951)

Balance 31.12.2015

12,021,755

Changes for the period 1.1. - 30.6.2016


Impairment losses for the period (note 4)

691,815

Transfers of accumulated provisions to assets held for sale

 (99,975)

Change in present value of the allowance account

261,047

Sales of impaired loans

 (8,596)

Foreign exchange differences

 (6,209)

Loans written-off during the period

 (467,387)

Balance 30.6.2015

12,320,450

 

The finance lease receivables by duration are as follows:


30.6.2016

31.12.2015

Up to 1 year

380,876

396,490

From 1 year to 5 years

152,361

136,893

Over 5 years

256,000

265,009


789,237

798,392

Non accrued finance lease income

(103,839)

(104,793)

Total

685,398

693,599

 

The net amount of finance lease receivables by duration is analyzed as follows:


30.6.2016

31.12.2015

Up to 1 year

364,485

380,421

From 1 year to 5 years

107,716

91,614

Over 5 years

213,197

221,564

Total

685,398

693,599

 



 

8. Investment and held for trading securities


i. Held for trading securities

Securities held for trading amounted to € 2.6 million on 30.6.2016 (31.12.2015: € 2.8 million) out of which Greek government bonds € 1.2 million (31.12.2015: € 1.9 million).

ii. Investment securities

a. Available for sale

The available for sale portfolio amounted to € 5.6 billion as at 30.6.2016 (31.12.2015: € 5.8 billion). These amounts include securities issued by the Greek State that amounted to € 3.7 billion as at 30.6.2016 (31.12.2015: € 3.9 billion) of which € 1.9 billion (31.12.2015: € 2.1 billion) related to Greek Government treasury bills. The Group during the first semester of 2016 has recognized impairment losses for shares amounting to € 1,479 and for mutual funds amounting to € 1,596 which are included in "Gains less losses on financial transactions".

b. Held to maturity

The held to maturity portfolio amounts to € 44.7 million as at 30.6.2016 (31.12.2015: € 79.7 million).

c. Loans and receivables

Loans and receivables include bonds issued by the European Financial Stability Facility (E.F.S.F.) at a nominal value of € 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 € 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 repos.

In April 2016 the subscription agreement between the European Financial Stability Fund (EFSF), the Hellenic Financial Stability Fund (HFSF) and the Bank was revised. The revision refers to the terms of use of the above bonds. The revision states that the Bank may participate with the EFSF bonds in the purchase programme for the bonds issued by central governments, special bodies-securities issuers and European supranational institutions of the Eurozone (Public Sector Purchase Programme - PSPP) conducted by ECB. According to the ECB's decision, a total up to 50% of each EFSF issue can be purchased until the completion of the program in March 2017. During the first semester of 2016, the Bank conducted sale transactions of EFSF securities at a nominal value of € 595 million, under the PSPP program.

The total book value of these bonds on 30.6.2016 was € 3.7 billion. (31.12.2015: € 4.3 billion.)


9. Investment property


Land - Buildings

Balance 1.1.2015


Cost

693,486

Accumulated depreciation and impairment losses

(126,274)

1.1.2015 - 30.6.2015


Net book value 1.1.2015

567,212

Additions

4,583

Additions from companies consolidated for the first time in the first semester of 2015

43,306

Reclassifications to "Other Assets"

(109)

Reclassification from "Property, plant and equipment"

3,800

Reclassification to "Assets held for sale"

(939)

Reclassification of investment assets from discontinued operations to "Asset held for sale"

(1,268)

Foreign exchange differences

489

Disposals/Write-offs

(5,502)

Depreciation charge for the period from continuing operations

(5,392)

Depreciation charge for the period from discontinued operations

(9)

Net book value 30.6.2015

606,171

Balance 30.6.2015


Cost

750,342

Accumulated depreciation and impairment losses

(144,171)

1.7.2015 - 31.12.2015


Net book value 1.7.2015

606,171

Additions

16,960

Additions from companies consolidated for the first time in the second semester of 2015

47,635

Reclassification from "Property, plant and equipment"

345

Foreign exchange differences

(1,259)

Disposals/Write-offs

(8,334)

Depreciation charge for the period from continuing operations

(5,572)

Impairment losses

(32,284)

Net book value 31.12.2015

623,662

Balance 31.12.2015


Cost

800,910

Accumulated depreciation and impairment losses

(177,248)

1.1.2016 - 30.6.2016


Net book value 1.1.2016

623,662

Additions

40,481

Reclassification to "Assets held for sale"

(40,233)

Reclassification from "Property, plant and equipment"

25,314

Foreign exchange differences

(101)

Disposals/Write-offs

(14,368)

Depreciation charge for the period from continuing operations

(6,465)

Net book value 30.6.2016

628,290

Balance 30.6.2016


Cost

802,219

Accumulated depreciation and impairment losses

(173,929)

 


In the first semester of 2016 transfers to "Assets held for sale" related mainly to fixed assets of APE Fixed Assets AE.

In 2015, an impairment loss amounting to € 32.3 million 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 additions from companies consolidated for the first time in 2015 and the additions of the first semester of 2016 mainly relate to investment property which were obtained as collateral for loans and acquired by the Group in the context of its credit risk methodology.



 10. Property, plant and equipment


Land and Buildings

Leased Equipment

Equipment

Total

Balance 1.1.2015





Cost

1,417,632

4,302

518,133

1,940,067

Accumulated depreciation and impairment losses

(411,831)

 (3,152)

 (441,736)

 (856,719)

1.1.2015 - 30.6.2015





Net book value 1.1.2015

1,005,801

1,150

76,397

1,083,348

Foreign exchange differences

211


55

266

Additions

3,941


9,970

13,911

Additions from companies consolidated for the first time in
the first semester of 2015



7

7

Additions from discontinued operations

127


70

197

Disposals/Write-offs

 (902)


 (58)

 (960)

Disposals/Write-offs from discontinued operations

 (120)


 (25)

 (145)

Reclassification to "Investment property"

 (3,800)



 (3,800)

Reclassification of investment assets from discontinued operations to "Asset held for sale"

 (3,582)


 (2,349)

 (5,931)

Reclassification to "Property, plant and equipment"

49


 (49)


Reclassification from/to "Other assets"

 (5,778)

 (18)

41

 (5,755)

Depreciation charge for the period from continuing operations

 (13,727)

 (294)

 (9,701)

 (23,722)

Depreciation charge for the period from discontinued operations

 (410)


 (302)

 (712)

Net book value 30.6.2015

981,810

838

74,056

1,056,704

Balance 30.6.2015





Cost

1,394,992

4,080

514,877

1,913,949

Accumulated depreciation and impairment losses

 (413,182)

 (3,242)

 (440,821)

 (857,245)

1.7.2015 - 31.12.2015





Net book value 1.7.2015

981,810

838

74,056

1,056,704

Foreign exchange differences

 (230)

 (1)

83

 (148)

Additions

3,718

102

7,490

11,310

Additions from companies consolidated for the first time in
the second semester of 2015



942

942

Disposals/Write-offs

 (2,809)

 (7)

 (69)

 (2,885)

Reclassification to "Investment property"

 (345)



 (345)

Reclassification of assets from discontinued operations to "Assets held for sale"

 (1,360)


 (525)

 (1,885)

Reclassification to "Assets held for sale"

 (164,166)


 (3,088)

 (167,254)

Reclassification to "Property, plant and equipment"


615

 (615)


Reclassification from/to "Other assets"

 (8,324)


 (581)

 (8,905)

Depreciation charge for the period from continuing operations

 (13,738)

 (106)

 (10,536)

 (24,380)

Depreciation charge for the period from discontinued operations





Depreciation charge for the period

 (1,929)


 (324)

 (2,253)

Net book value 31.12.2015

 792,627

1,441

66,833

 860,901

Balance 31.12.2015





Cost

 1,169,294

4,090

472,059

 1,645,443

Accumulated depreciation and impairment losses

 (376,667)

 (2,649)

 (405,226)

 (784,542)

1.1.2016 - 30.6.2016





Net book value 1.1.2016

 792,627

1,441

66,833

 860,901

Foreign exchange differences

 (450)


 (48)

 (498)

Additions

 3,428


10,710

 14,138

Disposals/Write-offs

 (1,199)

 (3)

 (57)

 (1,259)

Reclassification to "Investment property"

 (25,314)



 (25,314)

Reclassification from/to "Other assets"

 (3,379)

 (467)

544

 (3,302)

Depreciation charge from continuing operations

 (10,918)

 (179)

 (9,838)

 (20,935)

Net book value 30.6.2016

 754,795

792

68,144

 823,731

Balance 30.6.2016





Cost

 1,135,677

3,334

475,766

 1,614,777

Accumulated depreciation and impairment losses

 (380,882)

 (2,542)

 (407,622)

 (791,046)

During the current period there was no significant variation in property, plant and equipment.

In 2015, an impairment loss of € 2.3 million was recognized for property, plant and equipment and was recorded in "Other Expenses".



 

11. Goodwill and other intangible assets

 


Goodwill

Software

Other

Total

Balance 1.1.2015





Cost


488,347

155,103

643,450

Accumulated amortization and impairment loss


 (278,559)

 (33,467)

 (312,026)

1.1.2015 - 30.6.2015





Net book value 1.1.2015


209,788

121,636

331,424

Additions


24,244


24,244

Additions from companies consolidated for the first time in
the first semester of 2015

2,900



2,900

Additions from discontinued operations


74


74

Reclassification of assets of discontinued operations to "Assets held for sale"


 (3,353)

1

 (3,352)

Foreign exchange differences


13


13

Amortization for the period from continuing operations


 (11,003)

 (11,420)

 (22,423)

Amortization for the period from discontinued opearations


 (240)


 (240)

Net book value 30.6.2015

2,900

219,523

110,217

332,640

Balance 30.6.2015





Cost

2,900

506,086

153,827

662,813

Accumulated amortization and impairment loss


 (286,563)

(43,610)

 (330,173)

1.7.2015 - 31.12.2015





Net book value 1.7.2015

2,900

219,523

110,217

 332,640

Additions


36,611

72

 36,683

Reclassification of assets of discontinued operations to "Assets held for sale"


 (865)

 (2)

 (867)

Reclassification to "Assets held for sale"


22


 22

Foreign exchange differences


185


 185

Amortization charge for the period from continued operations


 (12,022)

 (11,490)

 (23,512)

Net book value 31.12.2015

2,900

243,454

98,797

 345,151

Balance 31.12.2015





Cost

2,900

544,009

152,363

 699,272

Accumulated amortization and impairment loss


 (300,555)

 (53,566)

 (354,121)

1.1.2016 - 30.6.2016





Net book value 1.1.2016

 2,900

243,454

98,797

 345,151

Additions


43,205


 43,205

Foreign exchange differences


 (38)

1

 (37)

Amortization charge for the period from continuing operations


 (12,949)

 (9,146)

 (22,095)

Net book value 30.6.2016

 2,900

273,672

89,652

 366,224

Balance 30.6.2016





Cost

2,900

586,672

152,192

 741,764

Accumulated amortization and impairment loss


 (313,000)

 (62,540)

 (375,540)

 

The additions of the first semester of 2016 mainly concern acquisitions of user rights for computer applications.

In 2015 the goodwill amounting to € 2.9 million relates to the acquired company Asmita Gardens SLR during the first semester of 2015 after the restatement, following the completion of valuation of its assets (note 28).



 

Liabilities

12. Due to Banks

 


30.6.2016

31.12.2015

Deposits:



- Current accounts

36,079

112,482

- Term deposits:



  Central Banks

22,671,359

24,404,828

  Other credit institutions

25,945

17,408

  Cash collateral for derivative margin account

28,703

56,960

Sale of repurchase agreements (Repos)

400,540

269,292

Borrowing funds

252,162

252,123

Deposits redeemable at notice:



- Other credit institutions

2,881

2,270

Total

23,417,669

25,115,363

 


Eurosystem funding decreased by € 1.7 billion during the first semester of 2016 mainly due to the sale of EFSF bonds through the PSPP programme (note 8), new repurchase agreements (Repos). In June 2016, 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 € 1 billion.

 

 

13. 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 amounting to € 5.15 billion while the maturities/redemptions for the same period amounted to € 9.22 billion.

The total balance of senior debt securities guaranteed by the Greek State as at 30.6.2016 amounts to € 5.15 billion (31.12.2015: € 9.22 billion).

These securities are not included in the "Debt securities in issue and other borrowed funds", as they are held by the Group.

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 Group.

The total balance of covered bonds as at 30.6.2016 amounts to € 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

340,272

Changes for the period 1.1 - 30.6.2016


Maturities/Repayments

(62,560)

Accrued interest

4,411

Foreign exchange differences

(6,839)

Balance 30.6.2016

275,284

 

The Bank proceeded to a shipping loan securitization transaction, transferring them to the fully consolidated Special Purpose Entity, Alpha Shipping Finance Ltd, which raised funding from third parties. The liability of the Group to third parties on 30.6.2016 amounts to € 275.3 million.

 

v. Liabilities from the securitization of other loans

Liabilities arising from the securitisation of consumer loans, corporate loans, credit cards and leasing are not included in "Debt securities in issue and other borrowed funds" since these securities of nominal value € 4.2 billion have been issued by special purpose entities and are held by the Bank.

 

vi. Subordinated debt

1. Subordinated debt (Lower Tier II, Upper Tier II)

Balance 1.1.2016

100,270

Changes for the period 1.1 - 30.6.2016


(Repurchases)/sales

(17,753)

Accrued interest

(16)

Balance 30.6.2016

82,501

 

2. 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 € 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 € 9.3 million gain.

 

Total of debt securities in issue and other borrowed funds as at 30.6.2016

399,904

 

Of the above debt securities in issue amounting to € 399,904 an amount of € 79,460 (31.12.2015: € 94,155) held by Group customers has been reclassified to "Due to customer". Therefore, the balance of "Debt securities in issue held by institutional investors and other borrowed funds" as at 30.6.2016, amounts to € 320,444 (31.12.2015: € 400,729).



 

14. Employee defined benefit obligations


The decrease of defined benefit obligations by € 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 € 24 million to TAP and the relevant liability amounts to € 4.8 million against € 27.4 million as at 31.12.2015. The final settlement of the liability is estimated that will take place during the current year. 

 

 

15. Provisions


30.6.2016

31.12.2015

Insurance

197,682

168,818

Provisions to cover credit risk and other provisions

138,286

129,640

Total

335,968

298,458

 

a. Insurance


30.6.2016

31.12.2015

Life insurance



Mathematical reserves

197,682

168,629

Outstanding claim reserves


189

Total

197,682

168,818

 

b. Provisions to cover credit risk and other provisions

Balance 1.1.2015

80,501

Changes for the period 1.1 - 30.6.2015


Reclassification of provisions from Bulgaria branch to "Liabilities related to assets held for sale"

(780)

Provisions to cover credit risk relating to off-balance sheet items (note 4)

 2,701

Other provisions for the period

1,249

Other provisions for companies consolidated for the first time

2,444

Other provisions used during the period

 (4,560)

Write-offs

 (612)

Foreign exchange differences

 6

Balance 30.6.2015

 80,949

Changes for the period 1.7 - 31.12.2015


Reclassification of provisions from Ionian Hotel Enterpises to "Liabilities related to assets held for sale"

(54)

Provisions to cover credit risk relating to off-balance sheet items

 (13,409)

Other provisions for the period

851

Other provisions used during the period

 (3,503)

Provision for voluntary separation scheme

64,300

Write-offs

612

Foreign exchange differences

 (106)

Balance 31.12.2015

129,640

Changes for the period 1.1. - 30.6.2016


Provisions to cover credit risk relating to off-balance sheet items (note 4)

494

Provision for voluntary separation scheme

30,993

Used provision for voluntary separation scheme

(30,993)

Other provisions for the period

11,212

Other provisions used during the period

 (3,094)

Foreign exchange differences

34

Balance 30.6.2016

138,286

 




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 € 5.2 million and other provisions to € 132.9 million out of which:

•   An amount of € 34.8 million relates to pending legal cases.

•   An amount of € 64.3 million relates to provision of voluntary separation scheme of Alpha Bank A.E. As analyzed in the 31.12.2015 Annual Financial Report (note 7) Alpha Bank A.E. has recorded within 2015 that provision within the context of the implementation of the updated restructuring plan and its relevant commitments.

During the first quarter, Alpha Bank Cyprus prepared a voluntary separation scheme, aiming to achieve substantial benefit in operational costs. The Group recognized during the first quarter a provision of amount € 31 million for the expected cost, which has been used during the second quarter for the compensations. The final cost amounted to € 31,5 million.

 

Equity

16. Share capital and Retained earnings


a. Share capital 

On 30.6.2016 the Bank's share capital amounts to €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 € 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 € 0.30 each.

b) Retained earnings

Since 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.

 

 

17. Hybrid securities


30.6.2016

31.12.2015

Perpetual with 1st call option on 18.2.2015 and annually

15,232

15,232

Securities held by Group companies

(100)

-

Total

15,132

15,232

 



 

Additional Information

18. Contingent liabilities and commitments

a. Legal cases


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.  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 up to and including the years 2013 and 2015 respectively.  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. Diners Club of Greece A.E.P.P. 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.

The Group's subsidiaries have been audited by the tax authorities up to and including the year indicated in the table below:

Name

Year

Banks


1. Alpha Bank London Ltd (voluntary settlement of tax obligation)

2013

2. Alpha Bank Cyprus Ltd (tax audit is in progress for years from 2008 - 2011)

2007

3. Alpha Bank Romania S.A.

2006

4. Alpha Bank AD Skopje (the company was transfered on 10.5.2016)

2009

5. Alpha Bank Srbija A.D.

2004

6. Alpha Bank Albania SH.A.

2011

Leasing companies


1. Alpha Leasing A.E. ** ( tax audit is in progress for years from 2008 - 2010)

2007

2. Alpha Leasing Romania IFN S.A.

2007

3. ABC Factors A.E. ** (tax audit is in progress for the year 2010)

2009

Investment Banking


1. Alpha Finance A.EP.Ε.Υ. **/***

2009

2. SSIF Alpha Finance Romania S.A.

2002

3. Alpha Α.Ε. Investment Holdings **/***

2009

4. Alpha Α.Ε. Ventures Capital Management - ΑΚΕS **/***

2009

5. Emporiki Ventures Capital Developed Markets Ltd

2007

6. Emporiki Ventures Capital Emerging Markets Ltd

2008

Asset Management


1. Alpha Asset Management Α.Ε.D.Α.Κ. **/***

2009

2. ABL Independent Financial Advisers Ltd (voluntary settlement of tax obligation)

2013

Insurance


1. Alpha Insurance Brokers Α.Ε. **/***

2009

2. Alpha Insurance Brokers S.R.L.

2005

3. Alphalife A.A.E.Z. **/***

2009

 

 

 

**      These companies received tax certificate for the years 2011, 2012 and 2013 without any qualification (note 5).

***   These companies have been audited by the tax authorities up to and including 2009 in accordance with Law 3888/2010 which relates to voluntary settlement for the unaudited tax years.



 

Name

Year

Real estate and hotel


  1. Alpha Astika Akinita Α.Ε.**

2009

  2. Ioniki Hotel Enterprises ** (tax audit is in progress for the year 2011)

2010

  3. Oceanos Α.Τ.Ο.Ε.Ε. **/***

2009

  4. Emporiki Development and Real Estate Management Α.Ε.

2008

  5. Alpha Real Estate D.O.O. Beograd

2008

  6. Alpha Astika Akinita D.O.O.E.L. Skopje

2005

  7. Alpha Real Estate Bulgaria E.O.O.D. (commencement of operation 2007)

*

  8. Chardash Trading E.O.O.D. (commencement of operation 2006)

*

  9. Alpha Real Estate Services S.R.L. (commencement of operation 1998)

*

10. Alpha Investment Property Chalandriou Α.Ε(commencement of operation 2012)

* *

11. Alpha Investment Property Attikis Α.Ε (commencement of operation 2012)

* *

12. Alpha Investment Property Attikis ΙΙ Α.Ε. (commencement of operation 2012)

* *

13. Alpha Investment Property Amarousion Ι Α.Ε. (commencement of operation 2012)

* *

14. Alpha Investment Property Amarousion ΙI Α.Ε. (commencement of operation 2012)

* *

15. AGI-RRE Participations 1 S.R.L. (commencement of operation 2010)

*

16. AGI-BRE Participations 1 E.O.O.D. (commencement of operation 2012)

*

17. Stockfort Ltd (commencement of operation 2010)

*

18. Romfelt Real Estate SA (commencement of operation 1991)

*

19. AGI-RRE Zeus S.R.L. (commencement of operation 2012)

*

20. AGI-RRE Athena S.R.L. (commencement of operation 2012)

*

21. AGI-RRE Poseidon S.R.L. (commencement of operation 2012)

*

22. AGI-RRE Hera S.R.L. (commencement of operation 2012)

*

23. AGI-BRE Participations 2 E.O.O.D. (commencement of operation 2012)

*

24. AGI-BRE Participations 2BG E.O.O.D. (commencement of operation 2012)

*

25. AGI-BRE Participations 3 E.O.O.D. (commencement of operation 2012)

*

26. AGI-BRE Participations 4 E.O.O.D. (commencement of operation 2012)

*

27. APE Fixed Assets A.E.**/***

2009

28. SC Cordia Residence S.R.L.

2011

29. HT-1 E.O.O.D (commencement of operation 2013)

*

30. AGI-RRE Venus S.R.L. (commencement of operation 2014)

*

31. AGI-RRE Cleopatra S.R.L. (commencement of operation 2014)

*

32. AGI-RRE Hermes S.R.L. (commencement of operation 2014)

*

33. SC Carmel Residential S.R.L. (commencement of operation 2013)

*

34. Alpha Investment Property Neas Kifissias Α.Ε. (commencement of operation 2014)

*

35. Alpha Investment Property Kallirois Α.Ε. (commencement of operation 2014)

*

36. Alpha Investment Property Livadias Α.Ε. (commencement of operation 2014)

*

37. AGI-SRE Ariadni DOO (commencement of operation 2015)

*

38. Alpha Investment Property Kefalariou Α.Ε. (commencement of operation 2015)

*

39. Alpha Investment Property Neas Erythreas Α.Ε. (commencement of operation 2015)

*

40. Anaplasis Plagias Α.Ε. (commencement of operation 2011)

*

41. Asmita Gardens S.R.L.

2010

42. Ashtrom Residents S.R.L. (commencement of operation 2006)

*

43. Cubic Center Development S.A. (commencement of operation 2010)

*

44. AGI-BRE Participations 5 EOOD (commencement of operation 2015)

*

45. AGI-SRE Participations 1 DOO (commencement of operation 2016)

*

Special purpose and holding entities


  1. Alpha Credit Group Plc (voluntary settlement of tax obligation)

2013

  2. Alpha Group Jersey Ltd

****

  3. Alpha Group Investments Ltd (commencement of operation 2006)

*

  4. Ionian Holdings Α.Ε.**/***

2009

  5. Ionian Equity Participations Ltd (commencement of operation 2006)

*

  6. Emporiki Group Finance Plc (voluntary settlement of tax obligation)

2013

  7. AGI-BRE Participations 1 Ltd (commencement of operation 2009)

*

  8. AGI-RRE Participations 1 Ltd (commencement of operation 2009)

*

  9. Alpha Group Ltd (commencement of operation 2012)

*

10. Katanalotika Plc (voluntary settlement of tax obligation)

2013

11. Epihiro Plc (voluntary settlement of tax obligation)

2013

 

*    These companies have not been audited by the tax authorities since the commencement of their operations.

**    These companies received tax certificate for the years 2011, 2012 and 2013 without any qualification (note 5).

***   These companies have been audited by the tax authorities up to and including 2009 in accordance with Law 3888/2010 which relates to voluntary settlement for the unaudited tax years.

****  These companies are not subject to a tax audit.



 

Name

Year

12. Irida Plc (voluntary settlement of tax obligation)

2013

13. Pisti 2010-1 Plc (voluntary settlement of tax obligation)

2013

14. Alpha Shipping Finance Ltd (commencement of operation 2014)

*

15. AGI-RRE Athena Ltd (commencement of operation 2011)

*

16. AGI-RRE Poseidon Ltd (commencement of operation 2012)

*

17. AGI-RRE Hera Ltd (commencement of operation 2012)

*

18. Umera Ltd (commencement of operation 2012)

*

19. AGI-BRE Participations 2 Ltd (commencement of operation 2011)

*

20. AGI-BRE Participations 3 Ltd (commencement of operation 2011)

*

21. AGI-BRE Participations 4 Ltd (commencement of operation 2010)

*

22. Alpha Real Estate Services Ltd (commencement of operation 2010)

*

23. AGI-RRE Ares Ltd (commencement of operation 2010)

*

24. AGI-RRE Venus Ltd (commencement of operation 2012)

*

25. AGI-RRE Artemis Ltd (commencement of operation 2012)

*

26. AGI-BRE Participations 5 Ltd (commencement of operation 2012)

*

27. AGI-RRE Cleopatra Ltd (commencement of operation 2013)

*

28. AGI-RRE Hermes Ltd (commencement of operation 2013)

*

29. AGI-Cypre Arsinoe Ltd (commencement of operation 2013)

*

30. AGI-SRE Ariadni Ltd (commencement of operation 2014)

*

31. Zerelda Ltd (commencement of operation 2012)

*

32. AGI-Cypre Alaminos Ltd (commencement of operation 2014)

*

33. AGI-Cypre Tochni Ltd (commencement of operation 2014)

*

34. AGI-Cypre Evagoras Ltd (commencement of operation 2014)

*

35. AGI-Cypre Tersefanou Ltd (commencement of operation 2014)

*

36. AGI-Cypre Mazotos Ltd (commencement of operation 2014)

*

37. AGI-Cypre Ermis Ltd (commencement of operation 2014)

*

38. AGI-SRE Participations 1 Ltd (commencement of operation 2016)

*

Other companies

 

1. Alpha Bank London Nominees Ltd

****

2. Alpha Trustees Ltd (commencement of operation 2002)

*

3. Flagbright Ltd

****

4. Kafe Alpha A.E.**/***

2009

5. Alpha Supporting Services Α.Ε.**/*** (tax audit is in progress for the year 2012)

2009

6. Real Car Rental A.E.**/***

2009

7. Evisak Α.Ε.**/***

2009

8. Emporiki Management Α.Ε.***

2009

9. Alpha Bank Notification Services Α.Ε. (commencement of operation 2015)

*

 

c. Operating leases

The Group's minimum future lease payments are:


30.6.2016

31.12.2015

- less than one year

42,702

43,930

- between one and five years

108,697

112,402

- over five years

158,184

164,421

Total

309,583

320,753

 

The minimum future lease fees are:


30.6.2016

31.12.2015

- less than one year

11,386

10,423

- between one and five years

42,015

41,694

- over five years

44,094

46,474

Total

97,495

98,591

 

*    These companies have not been audited by the tax authorities since the commencement of their operations.

**    These companies received tax certificate for the years 2011, 2012 and 2013 without any qualification (note 5).

***   These companies have been audited by the tax authorities up to and including 2009 in accordance with Law 3888/2010 which relates to voluntary settlement for the unaudited tax years.

****  These companies are not subject to a tax audit.

d. Off balance sheet liabilities


The Group 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.

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 Group's client. Letters of credit, as well as letters of guarantee, are commitments under specific terms and are issued by the Group for the purpose of ensuring that its clients will fulfill the terms of their contractual obligations.

The outstanding balances are as follows:


30.6.2016

31.12.2015

Letters of credit

33,888

35,159

Letters of guarantee and other guarantees

3,642,314

3,940,146

 

In addition, contingent liabilities for the Group arise from undrawn loan agreements 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 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 € 415.5 million (31.12.2015: € 278.9 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 € 1 billion concerning the Group's obligation to maintain deposits in Central Banks according to ratios determined in the respective country.

•   Deposits pledged amounting to € 0.2 billion concerning guarantees provided on behalf of the Greek State.

•   Deposits pledged to credit institutions amounting to € 1.3 billion which have been provided as guarantee for derivative transactions.

•   Deposits pledged to credit institutions amounting to € 0.06 billion which have been provided for Letter of Credit or Guarantee Letters issued by the Bank in order to facilitate clients' imports.

•   Deposits of € 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.

•   Loans and advances to customers:

i.  amount of nominal value of € 22.1 billion pledged to Central Banks for liquidity purposes.

ii. a carrying amount of € 3.3 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 € 4.2 billion, which are held by the Bank and pledged to Central Banks for liquidity purposes.

iii. a carrying amount of € 0.6 billion, which relates to shipping loans, has been securitized for the purpose of financing the Bank through a Special Purpose Entitiy, which amounts to € 0.3 billion at 30.6.2016.

iv. an amount of nominal value of € 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 € 3.54 billion of  Greek Government securities, of which a nominal amount of € 3.5 billion has been pledged to Central Banks for liquidity purposes, while Greek State securities of a nominal amount of € 0.04 billion has been pledged for other loan facilities.

ii. An amount of nominal value of € 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 € 3.39 billion is pledged as collateral to Central Banks for participation in main refinancing operations and an amount of € 0.26 billion has been given as collateral for other loan facilities.

iii. An amount of € 0.4 billion of other corporate securities has been given as a collateral of repo agreements.

In addition an amount of nominal value of € 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, a) out of which an amount of € 5 billion has been pledged as collateral to Central Banks for raising liquidity purposes and b) an amount of € 0.2 billion has been given as collateral for other loan facilities. 

 

19. Group Consolidated Companies

The consolidated financial statements, apart from the parent company Alpha Bank include the following entities:

Α. SUBSIDIARIES

 

Name

Country

Group's ownership interest %

30.6.2016

31.12.2015

Banks




  1. Alpha Bank London Ltd

United Kingdom

100.00

100.00

  2. Alpha Bank Cyprus Ltd

Cyprus

100.00

100.00

  3. Alpha Bank Romania S.A.

Romania

99.92

99.92

  4. Alpha Bank AD Skopje (27h)

FYROM


100.00

  5. Alpha Bank Srbija A.D.

Serbia

100.00

100.00

  6. Alpha Bank Albania SH.A.

Albania

100.00

100.00

Leasing Companies




  1. Alpha Leasing A.E.

Greece

100.00

100.00

  2. Alpha Leasing Romania IFN S.A.

Romania

100.00

100.00

  3. ABC Factors A.E.

Greece

100.00

100.00

Investment Banking




  1. Alpha Finance A.E.P.Ε.Υ.

Greece

100.00

100.00

  2. SSIF Alpha Finance Romania S.A.

Romania

100.00

100.00

  3. Alpha Α.Ε. Investment Holdings

Greece

100.00

100.00

  4. Alpha A.E. Ventures Capital Management - ΑΚΕS

Greece

100.00

100.00

  5. Emporiki Ventures Capital Developed Markets Ltd

Cyprus

100.00

100.00

  6. Emporiki Ventures Capital Emerging Markets Ltd

Cyprus

100.00

100.00

Asset Management




  1. Alpha Asset Management Α.Ε.D.Α.Κ.

Greece

100.00

100.00

  2. ABL Independent Financial Advisers Ltd

United Kingdom

100.00

100.00

Insurance




  1. Alpha Insurance Agents Α.Ε.

Greece

100.00

100.00

  2. Alpha Insurance Brokers S.R.L.

Romania

100.00

100.00

  3. Alphalife A.A.E.Z.

Greece

100.00

100.00

Real estate and hotel




  1. Alpha Astika Akinita Α.Ε.

Greece

93.17

93.17

  2. Ionian Hotel Enterprises Α.Ε.

Greece

97.27

97.27

  3. Oceanos Α.Τ.Ο.Ε.Ε.

Greece

100.00

100.00

  4. Emporiki Development and Real Estate Management Α.Ε

Greece

100.00

100.00

  5. Alpha Real Estate D.O.O. Beograd

Serbia

93.17

93.17

  6. Alpha Astika Akinita D.O.O.E.L. Skopje

FYROM

93.17

93.17

  7. Alpha Real Estate Bulgaria E.O.O.D.

Bulgaria

93.17

93.17

  8. Chardash Trading E.O.O.D.

Bulgaria

93.17

93.17

  9. Alpha Real Estate Services S.R.L.

Romania

93.17

93.17

10. Alpha Investment Property Chalandriou Α.Ε. (27d)

Greece

100.00

100.00

11. Alpha Investment Property Attikis Α.Ε.

Greece

100.00

100.00

12. Alpha Investment Property Attikis II Α.Ε.

Greece

100.00

100.00

13. Alpha Investment Property Amarousion Ι Α.Ε. (27d)

Greece

100.00

100.00

14. Alpha Investment Property Amarousion ΙI Α.Ε. (27d)

Greece

100.00

100.00

15. AGI-RRE Participations 1 S.R.L.

Romania

100.00

100.00

16. AGI-BRE Participations 1 E.O.O.D.

Bulgaria

100.00

100.00

 



 

Name

Country

Group's ownership interest %

30.6.2016

31.12.2015

17. Stockfort Ltd

Cyprus

100.00

100.00

18. Romfelt Real Estate S.A.

Romania

98.86

98.86

19. AGI-RRE Zeus S.R.L.

Romania

100.00

100.00

20. AGI-RRE Athena S.R.L.

Romania

100.00

100.00

21. AGI-RRE Poseidon S.R.L.

Romania

100.00

100.00

22. AGI-RRE Hera S.R.L.

Romania

100.00

100.00

23. AGI-BRE Participations 2 E.O.O.D.

Bulgaria

100.00

100.00

24. AGI-BRE Participations 2BG E.O.O.D.

Bulgaria

100.00

100.00

25. AGI-BRE Participations 3 E.O.O.D.

Bulgaria

100.00

100.00

26. AGI-BRE Participations 4 E.O.O.D.

Bulgaria

100.00

100.00

27. APE Fixed Assets Α.Ε.

Greece

72.20

72.20

28. SC Cordia Residence S.R.L.

Romania

100.00

100.00

29. ΗΤ-1 E.O.O.D.

Bulgaria

100.00

100.00

30. AGI-RRE Venus S.R.L. *

Romania

100.00

100.00

31. AGI-RRE Cleopatra S.R.L. *

Romania

100.00

100.00

32. AGI-RRE Hermes S.R.L. *

Romania

100.00

100.00

33. SC Carmel Residential S.R.L.

Romania

100.00

100.00

34. Alpha Investment Property Neas Kifisias Α.Ε.  (27d)

Greece

100.00

100.00

35. Alpha Investment Property Kallirois Α.Ε. (27d)

Greece

100.00

100.00

36. Alpha Investment Property Livadias Α.Ε.

Greece

100.00

100.00

37. AGI-SRE Ariadni DOO

Serbia

100.00

100.00

38. Asmita Gardens SRL (27k)

Romania

100.00

100.00

39. Alpha Investment Property Kefalariou Α.Ε.

Greece

100.00

100.00

40. Ashtrom Residents S.R.L.

Romania

100.00

100.00

41. AGI-BRE Participations 5 E.O.O.D. *

Bulgaria

100.00

100.00

42. Cubic Center Development S.A.

Romania

100.00

100.00

43. Alpha Investment Property Neas Erythreas Α.Ε.

Greece

100.00

100.00

44. Anaplasis Plagias Α.Ε.

Greece

100.00

100.00

45. AGI-SRE Participations 1 DOO (27l)

Serbia

100.00


Special purpose and holding entities




  1. Alpha Credit Group Plc

United Kingdom

100.00

100.00

  2. Alpha Group Jersey Ltd

Jersey

100.00

100.00

  3. Alpha Group Investments Ltd (27c, 27d, 27g, 27i)

Cyprus

100.00

100.00

  4. Ionian Holdings Α.Ε.

Greece

100.00

100.00

  5. Ionian Equity Participations Ltd

Cyprus

100.00

100.00

  6. Emporiki Group Finance Plc

United Kingdom

100.00

100.00

  7. AGI-BRE Participations 1 Ltd

Cyprus

100.00

100.00

  8. AGI-RRE Participations 1 Ltd (27k)

Cyprus

100.00

100.00

  9. Alpha Group Ltd

Cyprus

100.00

100.00

10. Katanalotika Plc

United Kingdom



11. Epihiro Plc

United Kingdom



12. Irida Plc

United Kingdom



13. Pisti 2010-1 Plc

United Kingdom



14. Alpha Shipping Finance Ltd

United Kingdom



15. AGI - RRE Athena Ltd

Cyprus

100.00

100.00

16. AGI - RRE Poseidon Ltd

Cyprus

100.00

100.00

17. AGI - RRE Hera Ltd

Cyprus

100.00

100.00

18. Umera Ltd

Cyprus

100.00

100.00

19. AGI-BRE Participations 2 Ltd

Cyprus

100.00

100.00

20. AGI-BRE Participations 3 Ltd

Cyprus

100.00

100.00

21. AGI-BRE Participations 4 Ltd

Cyprus

100.00

100.00

22. Alpha Real Estate Services Ltd

Cyprus

100.00

100.00

23. AGI-RRE Ares Ltd

Cyprus

100.00

100.00

24. AGI-RRE Venus Ltd

Cyprus

100.00

100.00

25. AGI-RRE Artemis Ltd

Cyprus

100.00

100.00

26. AGI-BRE Participations 5 Ltd

Cyprus

100.00

100.00

27. AGI-RRE Cleopatra Ltd

Cyprus

100.00

100.00

28. AGI-RRE Hermes Ltd

Cyprus

100.00

100.00

*    The companies do not have economic activity.



 

Name

Country

Group's ownership interest %

30.6.2016

31.12.2015

29. AGI-RRE Arsinoe Ltd

Cyprus

100.00

100.00

30. AGI-SRE Ariadni Ltd

Cyprus

100.00

100.00

31. Zerelda Ltd

Cyprus

100.00

100.00

32. AGI-Cypre Alaminos Ltd

Cyprus

100.00

100.00

33. AGI-Cypre Tochni Ltd

Cyprus

100.00

100.00

34. AGI-Cypre Evagoras Ltd

Cyprus

100.00

100.00

35. AGI-Cypre Tersefanou Ltd

Cyprus

100.00

100.00

36. AGI-Cypre Mazotos Ltd

Cyprus

100.00

100.00

37. AGI-Cypre Ermis Ltd

Cyprus

100.00

100.00

38. AGI-SRE Participations 1 Ltd (27g, 27l)

Cyprus

100.00


Other companies




  1. Alpha Bank London Nominees Ltd

United Kingdom

100.00

100.00

  2. Alpha Trustees Ltd

Cyprus

100.00

100.00

  3. Kafe Alpha A.E.

Greece

100.00

100.00

  4. Alpha Supporting Services Α.Ε.

Greece

100.00

100.00

  5. Real Car Rental A.E.

Greece

100.00

100.00

  6. Evisak Α.Ε.

Greece

85.71

85.71

  7. Emporiki Management Α.Ε.

Greece

100.00

100.00

  8. Alpha Bank Notification Services Α.Ε.

Greece

100.00

100.00

 

b. Joint ventures

Name

Country

Group's ownership interest %

30.6.2016

31.12.2015

1. APE Commercial Property Α.Ε.

Greece

72.20

72.20

2. APE Investment Property A.E.

Greece

72.80

72.80

3. Alpha ΤΑΝΕΟ Α.Κ.Ε.S. (27b)

Greece

51.00

51.00

4. Rosequeens Properties Ltd.

Cyprus

33.33

33.33

5. Aktua Hellas Holdings Α.Ε. (27a, 27e, 27f)

Greece

45.00


 

APE Investment Property prepares consolidated financial statements, in which the subsidiaries SYMET SA, Astakos Terminal SA, Akaport SA and NA.VI.PE SA are included. Furthemore, Rosequeens Properties Ltd and Aktua Hellas Holdings A.E are group of companies with subsidiaries the companies Rosequeens SRL and Aktua Greece Financial Solutions AE respectively. The aforementioned subsidiaries are not included in this note.

c. Associates

 

Name

Country

Group's ownership interest %

30.6.2016

31.12.2015

1. ΑΕDEP Thessalias and Stereas Ellados

Greece

50.00

50.00

2. A.L.C. Novelle Investments Ltd

Cyprus

33.33

33.33

3. Banking Information Systems Α.Ε.

Greece

23.77

23.77

4. Propindex Α.Ε.D.Α.

Greece

35.58

35.58

5. Olganos Α.Ε.

Greece

30.44

30.44

 


It is noted that since 2015, the Bank following the related loans restructuring agreements with the companies, SELONDA A.E.G.E. and NIREUS A.E.G.E., owns 23.01% and 20.72% of their shares, respectively. The Bank intends to transfer these companies in the near future and as a result these companies were classified in assets held for sale at their fair value, which was determined in the amount of € 1.

Subsidiaries are fully consolidated, while joint ventures and associates are accounted under the equity method, in accordance with IAS 28 "Investments in associates and joint ventures" and IFRS 11 "Joint Arrangements".

Consolidated financial statements do not include the Commercial Bank of London Ltd which is a dormant company and Smelter Medical Systems AE, Aris-Diomidis Emporiki SA, Metek SA, Flagbright Ltd which have been fully impaired and are in the process of liquidation. The Group hedges the foreign exchange risk arising from the net investment in subsidiaries through the use of derivatives in their functional currency.

 

20. Disclosures of Law 4261/5.5.2014

Article 81 of Law 4261/5.5.2014 incorporated into Greek legislation the Article 89 of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013, according to which, it is adopted for the first time the obligation to disclose information on a consolidated basis by Member State and third country in which the Group has headquarters and specified as follows: name or names, nature of business, geographic location, turnover, results before tax, taxes on results, public subsidies received and number of full time employees.

The required information is listed below. 

Greece

Turnover in Greece on 31.12.2015 amounted to € 3,160,041, results before tax amounted to losses € (1,806,082) taxes on results amounted to € 796,415 and the number of employees was 10,395 for the following companies that included:

 


Banks

  1. Alpha Bank A.E.

       (Bank's branches in Bulgaria and United Kingdom    
      are
 included)

Investment Banking

  1. Alpha Finance A.E.P.Ε.Υ.

  2. Alpha Α.Ε. Investment Holdings

  3. Alpha A.E. Ventures Capital Management -ΑΚΕS

  4. Emporiki Management Α.Ε.

Financing Companies

  1. Alpha Leasing A.E.

  2. ABC Factors A.E.

  3. Diners Club Greece Α.Ε.P.P.

Asset Management

  1. Alpha Asset Management Α.Ε.D.Α.Κ.

Insurance

  1. Alpha Insurance Agents Α.Ε.

  2. Alphalife A.A.E.Z.

Real estate and hotels

  1. Alpha Astika Akinita Α.Ε.

  2. Ioniki Hotel Enterprises Α.Ε.

  3. Oceanos Α.Τ.Ο.Ε.Ε.

  4. Emporiki Development and Real Estate
       Management Α.Ε.

  5. Alpha Investment Property Chalandriou Α.Ε.

  6. Alpha Investment Property Attikis Α.Ε.

  7. Alpha Investment Property Attikis II Α.Ε.

  8. Alpha Investment Property Amarousion Ι Α.Ε.

  9. Alpha Investment Property Amarousion ΙΙ Α.Ε.

10. Alpha Investment Property Eleonas Α.Ε.

11. APE Fixed Assets Α.Ε.

12. Αlpha Investment Property Neas Kifisias Α.Ε.

13. Αlpha Investment Property Kalirois Α.Ε.

14. Αlpha Investment Property Levadias Α.Ε..

15. Αlpha Investment Property Kefalariou Α.Ε.

16. Alpha Investment Property Neas Erythraias Α.Ε.

17. Anaplasi Plagias Α.Ε.

Special purpose and holding entities 

1. Ionian Holdings Α.Ε.

Other companies

1. Kafe Alpha A.E.

2. Alpha Supporting Services Α.Ε.

3. Real Car Rental A.E.

4. Evisak Α.Ε.

5. Alpha Bank Notification Services Α.Ε. 

Cyprus

Turnover in Cyprus on 31.12.2015 amounted to € 279,640, results before tax amounted to losses € (391,152), taxes on results amounted to € (3,291), the number of employees was 874 and the following companies were included:

 

Banks

1. Alpha Bank Cyprus Ltd

2. Emporiki Bank Cyprus Ltd

Investment Banking

1. Emporiki Ventures Capital Developed Markets Ltd

2. Emporiki Ventures Capital Emerging Markets Ltd


Insurance

1. Alpha Insurance Ltd

Real estate and hotels

1. Stockfort Ltd

Special purpose and holding entities

1. Alpha Group Investments Ltd

2. Ionian Equity Participations Ltd

3. AGI-BRE Participations 1 Ltd

4. AGI-RRE Participations 1 Ltd

5. Alpha Group Ltd

6. AGI-RRE Athena Ltd

7. AGI-RRE Poseidon Ltd

8. AGI-RRE Hera Ltd

9. Umera Ltd

10. AGI-BRE Participations 2 Ltd

11. AGI-BRE Participations 3 Ltd

12. AGI-BRE Participations 4 Ltd

13. AGI-RRE Apollo Ltd

14. AGI-RRE Ares Ltd

15. AGI-RRE Venus Ltd

16. AGI-RRE Artemis Ltd

17. AGI-BRE Participations 5 Ltd

18. AGI-RRE Cleopatra Ltd

19. AGI-RRE Hermes Ltd

20. AGI-Cypre Arsinoe Ltd

21. AGI-SRE Ariadni Ltd

22. AGI-Cypre Alaminos Ltd

23. AGI-Cypre Tochni Ltd

24. AGI-Cypre Evagoras Ltd

25. AGI-Cypre Tersefanou Ltd

26. AGI-Cypre Mazotos Ltd

27. AGI-Cypre Ermis Ltd

Other companies

1. Alpha Trustees Ltd

2. Zerelda Ltd 

United Kingdom

Turnover in United Kingdom on 31.12.2015 amounted to € 106,336, results before tax amounted to gains € 10,717, taxes on results amounted to € (1,044), the number of employees was 44 and the following companies included were:

 

Banks

1. Alpha Bank London Ltd

Asset Management

1. ABL Independent Financial Advisers Ltd

Special purpose and holding entities

1. Alpha Credit Group Plc

2. Emporiki Group Finance Plc

3. Katanalotika Plc

4. Epihiro Plc

5. Irida Plc

6. Pisti 2010-1 Plc

7. Alpha Finance Shipping LTD

Other companies

1. Alpha Bank London Nominees Ltd

2. Flagbright Ltd

 

 

Bulgaria

 

Turnover in Bulgaria on 31.12.2015 amounted to € 3,725, results before tax amounted to losses € (4,327), taxes on results amounted to € 51 and the following companies included:

Real estate and hotels

1. Alpha Real Estate Bulgaria E.O.O.D.

2. Chardash Trading E.O.O.D.

3. AGI-BRE Participations 1 E.O.O.D.

4. AGI-BRE Participations 2 E.O.O.D.

5. AGI-BRE Participations 2BG E.O.O.D.

6. AGI-BRE Participations 3 E.O.O.D.

7. AGI-BRE Participations 4 E.O.O.D.

8. HT-1 E.O.O.D

9. AGI-BRE Participations 5 E.O.O.D..

 

Jersey

Turnover in Jersey on 31.12.2015 amounted to € 971 and the results before tax amounted to losses € (63).

 

Special purpose and holding entities

1. Alpha Group Jersey Ltd

Serbia

Turnover in Serbia on 31.12.2015 amounted to € 53,555, results before tax amounted to losses € (7,647), tax on results amounted to € (31), the number of employees was 921 and the following companies included were:

 

Banks

1. Alpha Bank Srbija A.D.

Real estate and hotels

1. Alpha Real Estate D.O.O. Beograd 

Romania

Turnover in Romania on 31.12.2015 amounted to € 146,005, results before tax amounted to losses € (23,247), taxes on results amounted to € (123), the number of employees was 1,882 and the following companies included were:

 


Banks

1. Alpha Bank Romania S.A.

Leasing companies

1. Alpha Leasing Romania IFN S.A.

Investment Banking

1. SSIF Alpha Finance Romania S.A.

Insurance

1. Alpha Insurance Brokers S.R.L.

Real estate and hotels

1. Alpha Astika Akinita Romania S.R.L.

2. AGI-RRE Participations 1 S.R.L.

3. Romfelt Real Estate S.A.

4. AGI-RRE Zeus S.R.L.

5. AGI-RRE Athena S.R.L.

6. AGI-RRE Poseidon S.R.L.

7. AGI-RRE Hera S.R.L.

8. AGI-RRE Venus S.R.L.

9. AGI-RRE Cleopatra S.R.L.

10. AGI-RRE Hermes S.R.L.

11. SC Cordia Residence S.R.L.

12. SC Carmel Residential S.R.L.

13. Asmita Gardens S.R.L.

14. Ashtrom Residents S.R.L.

15. Cubic Center Development S.A.

Albania

Turnover in Albania on 31.12.2015 amounted to € 25,198, results before tax amounted to losses € (1,831), tax on results amounted to € 5 the number of employees was 425 and the following companies included were:

 

Banks

1. Alpha Bank Albania SH.A.

 

FYROM

Turnover in FYROM on 31.12.2015 amounted to € 6,690, results before tax amounted to losses € (3,101), tax on results amounted to € 199, the number of employees was 238 and the following companies included were:

 


Banks

1. Alpha Bank AD Skopje

Real estate and hotels

1. Alpha Astika Akinita D.O.O.E.L. Skopje


 

Neither the Bank nor the Group companies have received any public subsidies.  According to article 82 of Law 4261/5.5.2014 with which incorporated into Greek legislation the article 90 of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 is established the requirement to disclose the total return on assets.

The overall performance of the assets of the Group for the year of 2015 amounted to (1.9)% (31.12.2014: (0.5)%).



 

21. Operating segments

(Amounts in million of Euro)


1.1 - 30.6.2016


Retail Banking

Corporate Banking

Asset Management/Insurance

Investment Banking/ Treasury

South-Eastern Europe

Other

Total

Net interest income

 506.0

 346.7

 7.6

 (40.5)

 144.9

 1.6

 966.3

Net fee and commission income

 54.1

 67.0

 16.6

 4.6

 15.8

 0.7

 158.8

Other income

 3.3

 5.8

 (0.7)

 18.6

 27.1

 32.3

 86.4

Total income

 563.4

 419.5

 23.5

 (17.3)

 187.8

 34.6

 1,211.5

Total expenses

 (326.1)

 (75.3)

 (13.3)

 (14.5)

 (108.1)

 (34.0)

 (571.3)

Impairment losses

 (166.0)

 (356.8)



 (82.0)


 (604.8)

Provision for Voluntary Separation Scheme





 (31.5)


 (31.5)

Profit/(loss) before income tax

 71.3

 (12.6)

 10.2

 (31.8)

 (33.8)

 0.6

 3.9

Income tax







 (24.4)

Profit/(loss) after income tax from continuing operations







 (20.5)

Profit/(loss) from discontinued operations





 1.6


 1.6

Profit/(loss) after income tax







 (18.9)

Assets

 25,209.5

 15,594.2

 484.5

 11,910.6

 9,377.8

 4,795.3

 67,371.9

Liabilities

 22,218.1

 4,971.7

 1,408.7

 23,727.0

 5,969.9

 154.7

 58,450.1

(Amounts in million of Euro)


1.1 - 30.6.2015


Retail Banking

Corporate Banking

Asset Management/Insurance

Investment Banking/ Treasury

South-Eastern Europe

Other

Total

Net interest income

486.7

352.4

9.2

 (48.4)

157.8

(0.8)

 956.9

Net fee and commission income

 54.5

 65.3

 27.4

 (2.5)

 15.9