Annual Report • Sep 24, 2015
Annual Report
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For the period from 1st January to 31st December 2008 (In accordance with the Law 3556/2007)
| Statement by the members of the Board of Directors6 | |
|---|---|
| Board of Directors' Report 7 | |
| Independent Auditors' Report 14 | |
| Group Financial Statements as at 31.12.2008 | |
| ► Consolidated income statement 16 | |
| ► Consolidated balance sheet 17 | |
| ► Consolidated statement of changes in equity 18 | |
| ► Consolidated cash flow statement 20 | |
| ► Notes to the Group Financial Statements | |
| General information 21 | |
| Accounting policies applied | |
| 1.1 Basis of presentation 23 | |
| 1.2 Basis of consolidation 27 | |
| 1.3 Segment reporting 28 | |
| 1.4 Transactions in foreing currency and translation of foreign operations28 | |
| 1.5 Cash and cash equivalents29 | |
| 1.6 Classification and measurement of financial assets 29 | |
| 1.7 Derivative financial instruments and hedge accounting31 | |
| 1.8 Property, plant and equipment33 | |
| 1.9 Investment property33 | |
| 1.10 Goodwill and other intangible assets 33 | |
| 1.11 Leases34 | |
| 1.12 Insurance activities35 | |
| 1.13 Impairment losses on loans and advances36 | |
| 1.14 Deferred taxation 37 | |
| 1.15 Non-current assets held for sale and related liabilities 37 | |
| 1.16 Financial liabilities38 | |
| 1.17 Employee benefits 39 | |
| 1.18 Share options granted to employees 39 | |
| 1.19 Provisions40 | |
| 1.20 Sale and repurchase agreements 40 | |
| 1.21 Securitization40 | |
| 1.22 Equity 41 | |
| 1.23 Interest income and expense 41 | |
| 1.24 Fee and commission income 41 | |
| 1.25 Discontinued operations42 | |
| 1.26 Comparatives 42 |
| 2 Net interest income 43 | |
|---|---|
| 3 Net fee and commission income43 | |
| 4 Dividend income43 | |
| 5 Gains less losses on financial transactions44 | |
| 6 Other income 44 | |
| 7 Staff costs45 | |
| 8 General administrative expenses45 | |
| 9 Impairment losses and provisions to cover credit risk46 | |
| 10 Income tax 46 | |
| 11 Profit after income tax from discontinued operations47 | |
| 12 Earnings per share 48 | |
| 13 Cash and balances with Central Banks 50 | |
| 14 Due from banks 50 | |
| 15 Financial assets at fair value through profit or loss | |
| – Held for trading51 | |
| 16 Derivative financial instruments (assets and liabilities) 51 | |
| 17 Loans and advances to customers 53 | |
| 18 Investments securities – available-for-sale – held to maturity 54 | |
| 19 Investments in associates 55 | |
| 20 Investment property 56 | |
| 21 Property, plant and equipment 57 | |
| 22 Goodwill and other intangible assets 58 | |
| 23 Deferred tax assets and liabilities 59 | |
| 24 Other assets 60 | |
| 25 Non-current assets held for sale and related liabilities 61 | |
| Liabilities | |
| 26 Due to banks 62 | |
| 27 Due to customers 62 | |
| 28 Debt securities in issue and other borrowed funds63 | |
| 29 Liabilities for current income tax and other taxes 64 | |
| 30 Employee defined benefit obligations 64 | |
| 31 Other liabilities 68 | |
| 32 Provisions 68 | |
| 33 Share capital 70 | |
| 34 Share premium 70 | |
| 35 Reserves 70 | |
| 36 Retained earnings 70 | |
| 37 Treasury shares 71 | |
|---|---|
| 38 Hybrid securities 71 | |
| Additional Information | |
| 39 Contingent liabilities and commitments 72 | |
| 40 Group consolidated companies 74 | |
| 41 Segment reporting 76 | |
| 42 Financial risk management 78 | |
| 42.1 Credit risk78 | |
| 42.2 Market risk 88 | |
| 42.3 Liquidity risk 94 | |
| 42.4 Fair value of financial assets and liabilities 98 | |
| 43 Capital management – capital adequacy 99 | |
| 44 Related-party transactions 100 | |
| 45 Acquisitions, disposals of subsidiaries and associates and other corporate events 100 | |
| 46 Events after the balance sheet date 102 | |
| Independent Auditors' Report 103 | |
| Financial statements as at 31.12.2008 ► Income Statement 105 |
|
| ► Balance sheet 106 | |
| ► Statement of changes in equity 107 | |
| ► Cash flow statement 109 | |
| ► Notes to the financial statements | |
| General information 110 | |
| Accounting policies applied | |
| 1.1 Basis of presentation 112 | |
| 1.2 Segment reporting 116 | |
| 1.3 Transactions in foreign currency and translation of foreign operations 116 | |
| 1.4 Cash and cash equivalents117 | |
| 1.5 Classification and measurement of financial assets117 | |
| 1.6 Derivative financial instruments and hedge accounting120 | |
| 1.7 Investments in subsidiaries, associates and joint ventures 121 | |
| 1.8 Property, plant and equipment122 1.9 Investment property 122 |
|
| 1.10 Goodwill and other intangible assets122 | |
| 1.11 Leases 123 | |
| 1.12 Impairment losses on loans and advances 124 | |
| 1.13 Deferred taxation125 | |
| 1.14 Non-current assets held for sale125 | |
| 1.15 Financial liabilities126 | |
| 1.16 Employee benefits126 | |
| 1.17 Share options granted to employees127 | |
| 1.18 Provisions127 | |
| 1.19 Sale and repurchase agreements128 | |
| 1.20 Securitization 128 | |
|---|---|
| 1.21 Equity128 | |
| 1.22 Interest income and expense129 | |
| 1.23 Fee and commission income129 | |
| 1.24 Comparatives 129 | |
| 2 Net interest income 130 | |
| 3 Net fee and commission income130 | |
| 4 Dividend income130 | |
| 5 Gains less losses from financial transactions131 | |
| 6 Other income 131 | |
| 7 Staff costs131 | |
| 8 General administrative expenses132 | |
| 9 Impairment losses and provisions for credit risk 132 | |
| 10 Income tax133 | |
| 11 Earnings per share134 | |
| 12 Cash and balances with Central Banks 135 | |
| 13 Due from banks 135 | |
| 14 Securities held for trading135 | |
| 15 Derivatives financial instruments (assets and liabilities)136 | |
| 16 Loans and advances to customers 138 | |
| 17 Investment securities Available for sale - Held to maturity 139 | |
| 18 Investments in subsidiaries, associates and joint ventures 140 | |
| 19 Investment property142 | |
| 20 Property, plant and equipment143 | |
| 21 Goodwill and other intangible assets144 | |
| 22 Deferred tax assets and liabilities 145 | |
| 23 Other assets146 | |
| 24 Non-current assets held for sale146 | |
| 25 Due to banks147 | |
| 26 Due to customers147 | |
| 27 Debt securities in issue and other borrowed funds148 | |
| 28 Liabilities for current income tax and other taxes149 | |
| 29 Employee defined benefit obligations149 | |
| 30 Other liabilities152 | |
| 31 Provisions152 | |
| 32 Share capital 153 | |
| 33 Share premium153 | |
| 34 Reserves153 | |
| 35 Retained earnings154 |
| 36 Treasury shares154 | |
|---|---|
| 37 Contingent liabilities and commitments155 | |
| 38 Segment reporting156 | |
| 39 Financial risk management158 | |
| 39.1 Credit risk 158 | |
| 39.2 Market risk166 | |
| Foreign currency risk166 | |
| Interest rate risk (Gap Analysis)169 | |
| 39.3 Liquidity risk (Liquidity Gap Analysis)172 | |
| 39.4 Fair values of financial Assets and Liabilities 176 | |
| 40 Capital management - Capital adequacy177 | |
| 41 Related-party transactions 177 | |
| 42 Acquisitions, disposals of subsidiaries, associates and other corporate events 179 | |
| 43 Events after the balance sheet date180 | |
| Financial Statements and Information of Alpha Bank A.E. and the Group181 | |
| Information Pursuant to Article 10 of Law 3401/2005183 | |
| Anailability of Annual Financial Report185 |
(In accordance with article 4 paragraph 2 of Law 3556/2007)
To the best of our knowledge, the annual 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 statements taken as a whole, as provided in article 4 paragraphs 3 and 4 of Law 3556/2007, and the Board of Directors' annual report presents fairly the information required by article 4 paragraphs 7 and 8 of Law 3556/2007 and the related decisions of the Hellenic Capital Market Commission.
Athens, 24 February 2009
THE CHAIRMAN OF THE BOARD OF DIRECTORS
THE MANAGING DIRECTOR THE EXECUTIVE DIRECTOR
YANNIS S. COSTOPOULOS I.D. No. Χ 661480
DEMETRIOS P. MANTZOUNIS I.D. No Ι 166670
MARINOS S. YANNOPOULOS I.D. No Ν 308546
The activities and economic results of Alpha Bank in Greece and abroad in the year 2008 under review have developed along satisfactory lines, within an environment of rapidly deteriorating global financial markets. The difficulties faced by banks internationally in obtaining financing through the interbank and commercial paper markets has rendered their economic position fragile and has necessitated the extensive intervention of the monetary and fiscal authorities in each and every country in an effort to secure the stability and the functioning of the system.
In particular, interventions have taken the form of: a) facilitating the financing of the banks in each country from the central bank and the interbank markets, mainly through the provision of government securities that may be used as collateral, at a fee, b) providing, against an appropriate fee, government guarantees for the refinancing the loans that are on the books of banks via the commercial paper market and c) bolstering bank's own capital via the purchase of preferred or/and common stocks by the state.
Despite the extensive intervention, it was not possible to avert a significant slowdown or/and curtailment of credit expansion across economies. Already, the global financial system is going through a second bout of unfavorable effects flowing from the global financial crisis.
In particular, the severe financial crisis that started in July 2007 in the market for securitized subprime mortgages in the USA, expanded in the market for corporate bonds and in the whole of the global financial system. The crisis resulted in the write-off of a significant part of the value of the financial assets in the balance sheet of many of the major banks in the world as a consequence of their valuation in their new, much lower, current prices prevailing in the malfunctioning markets of securitized mortgages and other complex derivative financial products. The crisis compelled banks to look for capital of comparable magnitude and restore their capital base, a function which became all the more crucial in an environment of rapidly declining stock markets and one where the trust of the general public in the credit institutions of many countries, was gradually being eroded owing to the uncertainty regarding their exposure to the malfunctioning market of mortgages and asset backed bonds in the USA and their actual financial state.
On the other hand, the crisis has contributed to the curtailment of the liquidity in the interbank markets as the perceived counterparty risk between financial institutions increased substantially. Liquidity in these markets had been partially restored by July of 2008 which can be gagged from the fall in the margins observed in the interbank markets, as a result of intensive interventions by the Central Banks who accepted as collateral an extensive array of financial assets and of the drastic reduction, by the FED and the Bank of England, of their respective benchmark interest rates.
Nevertheless, in the first seven months of 2008, the financial crisis overlapped with the large increases in the price of oil and food products which contributed to the rise of inflation and the eruption of inflationary expectations in the USA and in Europe which led the ECB to increase (as opposed to the required decrease in) its benchmark interest rate in July of 2008. This fact was one of the basic factors which led to the abrupt deceleration of the economic activity across all economies from the 3rd quarter of 2008 and, importantly, to the deterioration and geographical amplification of the financial crisis from September of 2008 in all those countries which we now know to be affected by the crisis and which include emerging economies.
In particular, following the nationalization of the big mortgage securitization companies Freddie Mac and Fannie Mae in August of 2008, the continued fall in the housing market and the market for corporate bonds, resulted in the substantial increase in the write offs of non performing assets and the further curtailment of the capacity of the big investment banks and other financial institutions to refinance their liabilities in the interbank and the commercial paper markets. This led the situation to crisis point in the middle of September of 2008 when Lehman Brothers, the largest investment bank, went into bankruptcy, AIG, the largest insurance company in the world was virtually nationalized, Merrill Lynch was bought out by Bank of America, the remaining investment banks were transformed into banks under the oversight of and with access to FED refinancing, etc. These developments contributed to the almost total disruption of the functioning of the interbank markets and the markets for corporate bonds and commercial paper and led to the unveiling of the large problems of liquidity and doubtful liabilities that faced many European banks. In this way, the financial crisis was transferred with great force to Europe and to the emerging economies, compelling governments to take measures in support of banks, as has been previously mentioned. The resulting intensification of the credit crunch situation led all the advanced economies into a deep recession and all emerging economies to an abrupt slowdown of their economic growth and also to a large fall in commodities prices and the volume of international trade.
Moreover, the drastic reduction in the price of oil, in combination with the recession of the global economy, has led to a significant retrenchment of inflation in all economies. Thus in December 2008 inflation was 0.1% in the USA and 1,6% in the Euro zone, while, GDP fell considerably in annual terms in the 4th quarter of 2008 by -0.2% in the USA, -1.2% in the Euro zone and -4.6% in Japan. The general consensus holds that 2009 GDP will fall even more, by -2.0% in the USA, -2.3% in the Euro zone, -2.4% in Japan and -2.9% in the United Kingdom.
The considerable slowdown in the growth of emerging economies across the world, including the economies of southeastern Europe, is another contributing factor to the negative economic juncture currently underway. Greek banks have invested heavily in expanding their operation in the countries of South Eastern Europe, which have also undergone a slowdown in economic growth. In particular, the general consensus holds that GDP growth in China will slow to around 6.5% in 2009 from 9.0% in 2008, owing to the significant fall of its exports, as a result of the slowdown of global demand. Also, in our neighboring counties, growth is expected to slow in Bulgaria and Romania to 2.3% and 2.8% respectively in 2009, from 6.0% and 7.8% respectively in 2008.
The Greek economy retained a strong growth of 3.0% in 2008, from 4.0% in 2007, despite the significant slowdown it had to endure as a result of the global financial crisis. Growth in 2008 was characterized by the increase of consumer expenditure by 2.4%, the substantial fall in investment, especially investment in the housing sector, the increase of exports of goods and services by 3.0% in real terms and the decline of imports by around -0.5%. Furthermore, the abovementioned growth in 2008 was based on the increase of credit expansion in the private sector of the economy by 16.5%, with credit expansion to households slowing to 12.8% in December 2008 and credit expansion to businesses remaining robust at 19.8%. Finally, the economic growth in 2008 was combined with a new surge of the general government deficit to the 3.7% of GDP and the forecast in the 2008 Update of the Hellenic Stability and Growth Program 2008-2011 for an equally high deficit in 2009, as well as for a deficit above 3.0% of GDP in 2010. This apparent inability of making any headway in the management of the fiscal finances, in combination with pervasive risk aversion as a result of the global financial crisis, has led to the significant widening of the spread between the yields of German and Greek government bonds to 230- 300bps.
The report of the Bank of Greece concerning the Monetary Policy for 2008-2009 estimates a GDP growth in 2009 of around 0.5%, whereas the Stability and Growth Program foresees GDP growth to reach 1.1% in 2009. Nevertheless, the Bank of Greece also maintains that there are a number of important factors which could lead to a greater increase of GDP in Greece in 2009. Despite the high level of uncertainty surrounding economic developments in 2009 and the following years, prospects are still favorable for growth exceeding 1.5% in 2009.
In contrast to the significant problems faced by the banks in many countries of Europe and in USA, Greek banks have not recorded direct losses from the financial crisis. In order to secure their appropriate financing in the interbank and corporate bonds markets and in view of the unfavorable economic environment in 2009, the Greek banks are making use of the government measures of € 28 billion to strengthen liquidity in the Greek economy, ensuring the continuation of the financing and development of the economy. Overall, Greek banks are aiming to consolidate their position in the market for financial services not only in Greece but also across the countries of South Eastern Europe. The expansion of the Greek banks in the countries of South Eastern Europe was realized in full understanding of the macro-economic and other risks which existed and still exist in the region, especially in the previously mentioned turbulent environment of the global financial crisis. That which is primarily being monitored in the current period, is the systemic risks that arise as a result of the unavoidable curtailment of net capital inflows from abroad in these countries. In any case, this expansion was and still remains necessary for the Greek banks but also for the numerous Greek businesses that operate in the region. Moreover, it is not accidental that the increase of Greek exports of goods and services during the last years has been based on their substantial increase towards the countries of South Eastern Europe.
Alpha Bank, according to the decision made by the board of directors on 16.12.2008, will make use of the government measures of €28 billion that were implemented via the law 3723/2008 for the enforcement of the liquidity in economy as measure to encounter the effects of the global financial crisis. Alpha Bank's General Assembly on 12.01.2009, following the above-mentioned Board of Director's decision, has decided among other to increase the share capital till the amount of € 950 million through the issue and distribution of preference shares and to appoint a government representative as member of the Board of Directors as required by the abovementioned law and under the condition that the government will participate in the Bank's share capital.
Alpha Bank's rapid growth, both in Greece and Southeastern Europe, is reflected by the increase in market share in the majority of sectors within which the bank operates.
The Bank maintains its long-term leading position in corporate loans in Greece, which has been enhanced by the expansion of services to medium size enterprises, by utilizing its new centralized management relations scheme, a result of the creation of 10 new Business Centers. In mortgage lending, we achieved a market share of 14.4% and the second largest portfolio in the Greek Market. Furthermore, during 2008, our growth in consumer credit exceeded that of the market, increasing our market share to 13.5% from 13.0% in 2007. In the broader region of Southeastern Europe Alpha Bank operates has achieved a market share of more than 8%.
Our presence in Greece and in Southeastern Europe is supported by a solid network of approximately 1000 branches in both urban and rural areas, which has allowed us to easily adjust to the changing market conditions. However, due to the negative effect of the global financial crisis on the region, we have decided to postpone our plans to further expand our branch network. Instead, our focus has now shifted to fully utilizing our existing branch network and to increase our brand's visibility in the market.
Alpha Bank, under the current financial circumstances, has increased by 19,4% its assets as result of the dynamic expansion of loans by 20,5%, acquiring the funds from deposits and from the interbank markets.
The Bank, during 2008, has performed securitization of mortgage and consumer loans in order to enhance its liquidity. In detail, the Bank has issued two series of covered bonds, on 18 July, via its subsidiary Alpha Covered Bonds Plc that was founded for this reason. The 2 series of bonds, which amount to € 1 billion each, have three and five years duration, are guaranteed by the Bank and are covered by mortgage loans. The bonds that have been rated as AAA from three international firms (Standard & Poor's, Moody's και Fitch) have been used as collateral in monetary acts with Bank of Greece. Two more bond loans were issued in 9.12.2008 through the Bank's subsidiary company Katanalotika Plc with coverage of consumer loans. The bonds, which amount to € 1,5 billion, have been acquired by the Bank and their mutual issuance, that has been rated as Aa2 by the international firm Moody's, has been used for refinancing purposes with the Bank of Greece.
The guarantee of bank deposits that are insured by the deposit guarantee fund has been increased from € 20.000 to € 100.000 per depositor according to updated legislation as consequence of the financial uncertainty derived from the collapse of financial institutions abroad the last quarters of 2008. Consequence of the above measures that were mending to protect the banks' depositors is the increase of the contribution fees paid by the banks to the Hellenic deposit guarantee fund. The corresponding legislation that was presented in the Parliament, under the title "Deposit and investment guarantee fund" provides that the additional contribution formats a fund of which every financial institutions entitles a portion based on the amounts of its contribution.
The impairment charge that was performed in 2008 was up to 1,13% of the total balance of loans and receivables (31.12.2007: 0,6%) and the total percentage coverage of credit risk is up to 2,46% of the portfolio of loans and receivables. This increase reflects the
Bank's policy that requires the formation of adequate provisions in face of the anticipated deterioration in the repayments of the portfolio of loans.
Consequently, the profit after tax for year 2008 has decreased by 33% comparing to last year's results from continuing activities, mainly due to the increase in the impairment charge by 139%.
The capital adequacy has been preserved at high levels resulting in a capital adequacy ratio of 10,1% and core Tier 1 ratio of 8,3%. Capital adequacy from 1 January 2008 is calculated under the new regulatory framework (Basel II) which has been incorporated into Greek law by Law 3601/2007. The new regulatory framework significantly amends the measurement of credit risk and introduces capital requirements for operational risk. There are no significant changes in the measurement of market risk. Specifically, credit risk of the investment portfolio and operational risk are measured based on the Standardized Approach.
The main developments were the acquisitions of 93% of the newly established Ukraine bank OJSC Astra Bank and the transition of 100% of the share capital of company "Touristika Theretra A.E." owner of the hotel Hilton Rhodes Resort that was held by 50% from the "Greek Hotel Company Lampsa S.A." and by 50% from the "Plaka S.A". The total purchase price was up to € 35,5 million.
In the middle of the year, Alpha Bank has sold part of its treasury shares which represented 4% of its share capital to the Paramount Services Holding Limited, a company which is mainly controlled by one of the most prominent families of Qatar.
On 31.12.2008 the Bank owned 5.683.358 treasury shares, of acquisition value €68,9 million and of market value €38 million. The group's companies don't hold any treasury shares. In the period from 31.12.2008 till 16.2.2009, the Bank has purchased 457.601 treasury shares, of acquisition value €2,6 million (€5,83 per share). Therefore, the total number of treasury shares as at 16.2.2009 amounted to 6.140.959 shares of total acquisition value of €71,7million and represent 1,49% of the share capital.
Also, on 17.02.2009 the third securitization of a part of the portfolio of bond loans amounting to 1,25 billion was completed through the special purpose entity Talanto PLC. A part of those bonds, which has received an A1 rating from the international firm Moody's, is accepted by the European Central Bank as collateral for refinancing purposes.
Alpha Bank is constantly keeping apace with the evolving international macroeconomic environment, adapting to international trends and moving forwards with added emphasis on managing and controlling the quality of its lending, the inherent credit risk and its liquidity, and is continuously seeking to maximize the use of its capital, while strengthening the policies, procedures and the models used according to international best practices. Based on the above and its long-standing history, the Bank is steadily developing while maintaining strong and healthy assets.
The liquidity risk faced by the Bank has increased due to the current financial circumstances and the difficulty to access the international capital markets. During 2008, the Bank has proceeded to issue covered bonds on a collateral pool of mortgage loans and to securitize a portfolio of consumer loans, which are currently used as collateral to draw liquidity from Bank of Greece. During 2009 the Bank intends to proceed with additional securitization of loans as decided by the Asset/ Liability Committee (ALCO). If the current market conditions persist, the above securitizations will be used as collateral to draw liquidity from Bank of Greece. Additionally, the Bank has decided to participate in the Greek government's bank liquidity support plan, which will improve its liquid reserves and its capital adequacy ratios.
Moreover, today's challenges in global financial markets demand vigilance and the ability to manage uncertainty. Throughout its long standing history, Alpha Bank has always effortlessly and successfully navigated the changing market conditions, relying on its well established reputation, leveraging the Bank's organizational structure and qualified personnel while maintaining mutually beneficial relationships with customers and a conservative approach to risk taking.
The Board of Directors' intention was to propose a cash dividend for the year 2008, as per the provisions of Law 3723/2008. However, in light of the forthcoming legislative amendments regarding the distribution of dividend, the Board of Directors will suspend any decision on the distribution of dividend until the Annual General Meeting of Shareholders, by which time it expects to be in a position to formulate its final proposal
According to the corresponding regulatory framework, the present report must contain the main transactions with related parties. All the transactions between the related parties, the bank and the group's companies are performed in the ordinary business course, conducted according the market's conditions and are authorized by corresponding management personnel. There are no other material transactions between the related parties beyond those described in the following paragraph.
a. The outstanding balances and the corresponding income and expense of the Group companies with members of their Boards of Directors and their close family members are as follows:
| Loans | 172.472 |
|---|---|
| Deposits | 73.991 |
| Debt securities in issue | 20.096 |
| Letters of guarantee | 21.392 |
| Interest and similar income | 10.295 |
| Interest expense and similar charges | 3.942 |
| Staff costs | 13.021 |
b. The outstanding balances and the corresponding results of the most significant transactions with subsidiaries are as follows: ΑLPHA BANK LONDON
| Assets | |
|---|---|
| Due from banks | 169.715 |
| Liabilities | |
| Due to banks | 202.793 |
| Letters of guarantee | 479.477 |
| Income | |
| Interest and similar income | 10.003 |
| ΑLPHA LEASING A.E | |
| Assets | |
| Loans and advances to customers | 970.900 |
| Income | |
| Interest and similar income | 47.510 |
| ABC FACTORS A.E | |
| Assets | |
| Loans and advances to customers | 455.212 |
| Income | |
| Interest and similar income | 17.017 |
| ALPHA LEASING ROMANIA S.A | |
| Assets | |
| Loans and advances to customers | 115.893 |
| Income | |
| Interest and similar income | 724 |
| ALPHA BANK SRBIJA A.D | |
| Assets Due from banks |
143.507 |
| Income | |
| Assets | |
|---|---|
| Due from banks | 2.551.692 |
| Letters of guarantee | 52.637 |
Interest and similar income 8.176
| Income | |
|---|---|
| Interest and similar income | 120.272 |
| ALPHA CREDIT GROUP PLC | |
| Assets | |
| Investment securities Available for sale | 5.464.510 |
| Liabilities | |
| Debt securities in issue and other liabilities | 17.395.646 |
| Income | |
| Interest and similar income | 224.204 |
| Expenses | |
| Interest expense and other expenses | 1.026.366 |
| ALPHA BANK CYPRUS LTD | |
| Assets | |
| Due from banks | 2.863.071 |
| Liabilities | |
| Due to banks | 1.977.836 |
| Letters of guarantee | 462.953 |
| Income | |
| Interest and similar income | 67.597 |
| Expenses | |
| Interest expense and other expenses | 63.054 |
| ALPHA GROUP INVESTMENTS LTD | |
| Income | |
| Gain/Loss form financial transactions | 84.297 |
The Explanatory Report of the Board of Directors for the year 2008 to the Ordinary General Meeting of Shareholders contains detailed information in accordance with article 11 of Law 3371/2005, the reference date being 31.12.2008.
a. The share capital of the Bank is Euro 1,931,590,264.40 and is divided into 410,976,652 common, nominal, voting, paperless shares of nominal value of Euro 4.70 each. All shares are listed on the Athens Exchange. The Bank shares are registered, voting and indivisible, in a paperless form or as the law provides from time to time.
It is reminded that the Extraordinary General Meeting of Shareholders on 12.1.2009 approved:
Law 2190/1920, has not yet been implemented.
The Bank may increase its share capital by virtue of a resolution of its General Meeting of Shareholders or of its Board of Directors, in accordance with its Articles of Incorporation and the statutory provisions then in force. The Bank may acquire treasury shares according to the stipulations of the law. By virtue of its resolution dated 6 June 2006, in accordance with section 13 of Codified Law 2190/1920 and for a period of four (4) years, i.e. till the expiration of the term of the current Board of Directors, the General Meeting of the Bank's Shareholders assigned to its Board of Directors the authority to cause an extraordinary increase of the share capital of the Bank. If such authority is exercised, then, under section 13(4) of Codified Law 2190/1920, the share capital may be increased by an amount up to the outstanding paid in share capital on the date the above authority was granted i.e. up to the amount of Euro 1,589,971,702.80. By virtue of a resolution of the General Meeting of Shareholders and subject to the publicity requirements of section 7b of Codified Law 2190/1920, this authority of the Board of Directors may be renewed for a period not to exceed five (5) years per each renewal, such renewal to take effect upon the expiration of each five-year period.
The Bank may purchase its own shares by the definitions and under the provisions of the law. The Ordinary General Meeting of Shareholders of 3.4.2008 approved, in accordance with the provisions of article 16 of Codified Law 2190/1920 as in effect, a share buy-back scheme expiring on 3.4.2010 for up to 5.00% of the outstanding paid in share capital at a minimum price of Euro 1.00 and a maximum of Euro 33.00 per share. Acting on the above-mentioned resolution, in the period between 8.4.2008 through to 27.6.2008, the Bank purchased 7,989,610 treasury shares, representing 1.94% of the outstanding paid in share capital, at an aggregate acquisition cost of Euro 166,666,842.39. The total amount of treasury shares held by the Bank on 27.6.2008 was
16,522,691, representing 4.02% of the outstanding paid in share capital. On 30.6.2008 and by way of private placement, the Bank sold 16,439,066 treasury shares representing 4,00% of the Bank's outstanding paid in share capital to Paramount Services Holding Limited, a company representing the business interests of the most prominent family in Qatar. Furthermore, in the period between 4.7.2008 through to 31.12.2008, the Bank purchased 5,599,733 treasury shares, representing 1.36% of the outstanding paid in share capital, at an aggregate acquisition cost of Euro 67,247,830.52. On 31.12.2008, the Bank held 5,683,358 treasury shares, representing 1,38% of the outstanding paid in share capital, at an aggregate acquisition cost of Euro 68,984,548.89 and a market value of Euro 38,078,498.60 on 31.12.2008.
Athens, 24 February 2009 THE CHAIRMAN OF THE BOARD OF DIRECTORS YIANNIS S.COSTOPOULOS
KPMG Certified Auditors AE 3 Stratigou Tombra Street Aghia Paraskevi GR – 153 42 Athens Greece
Στρατηγού Τόμπρα 3 153 42 Αγία Παρασκευή Ελλάς ΑΡΜΑΕ29527/01AT/B/93/1 62/96
Telephone Τηλ: +30 210 60 62 100 Fax Φαξ: +30 210 60 62 111 Internet www.kpmg.gr e-mail [email protected]
Independent Auditors' Report
(Translated from the original in Greek)
To the Shareholders of ALPHA BANK A.E.
We have audited the accompanying Consolidated Financial Statements of ALPHA BANK A.E. (the "Bank") which comprise the balance sheet as at 31 December 2008, and the statements of income , changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and the fair presentation of these Consolidated Financial Statements in accordance with International Financial Reporting Standards, as adopted by the European Union. This responsibility includes: designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Our responsibility is to express an opinion on these Consolidated Financial Statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the consolidated financial statements are free of material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank's internal control. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the Consolidated Financial Statements give a true and fair view, of the consolidated financial position of the Bank as of 31 December 2008, and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union.
We verified that the contents of the Board of Directors' Report are consistent and correspond with the accompanying Financial Statements within the scope set by articles 37 and 107 of C.L. 2190/1920
Athens, 24 February 2009
KPMG Certified Auditors AE
Marios T. Kyriacou Certified Auditor Accountant AM SOEL 11121
Nick Vouniseas Certified Auditor Accountant AM SOEL 18701
| (Thousands of Euro) From 1 January to |
|||
|---|---|---|---|
| Note | 31.12.2008 | 31.12.2007 | |
| Interest and similar income | 2 | 4,406,935 | 3,406,725 |
| Interest expense and similar charges | 2 | (2,608,333) | (1,801,472) |
| Net interest income | 2 | 1,798,602 | 1,605,253 |
| Fee and commission income | 505,039 | 507,651 | |
| Commission expense | (40,625) | (43,061) | |
| Net fee and commission income | 3 | 464,414 | 464,590 |
| Dividend income | 4 | 2,591 | 2,254 |
| Gains less losses from financial transactions | 5 | (6,848) | 82,542 |
| Other income | 6 | 79,944 | 81,432 |
| 75,687 | 166,228 | ||
| Total income | 2,338,703 | 2,236,071 | |
| Staff costs | 7 | (589,488) | (526,935) |
| General administrative expenses | 8 | (495,623) | (416,253) |
| Depreciation and amortization expenses | 20, 21, 22 | (88,949) | (78,254) |
| Other expenses | (4,256) | (3,903) | |
| Total expenses | (1,178,316) | (1,025,345) | |
| Impairment losses and provisions to cover credit risk | 9 | (541,751) | (226,683) |
| Share of profit/(loss) of associates | 19 | 6,997 | 1,220 |
| Profit before tax | 625,633 | 985,263 | |
| Income tax | 10 | (112,186) | (214,565) |
| Profit after tax from continuing operations | 513,447 | 770,698 | |
| Profit after income tax from discontinued operations | 11 | 80,388 | |
| Profit after tax | 513,447 | 851,086 | |
| Profits attributable to: | |||
| Equity holders of the Bank | 512,067 | 850,035 | |
| Minority interests | 1,380 | 1,051 | |
| Earnings per share: | 12 | ||
| From continuing and discontinued operations | |||
| Basic earnings per share (€) | 1.26 | 2.10 | |
| Diluted earnings per share (€) | 1.26 | 2.09 | |
| From continuing operations | |||
| Basic earnings per share (€) | 1.26 | 1.90 | |
| Diluted earnings per share (€) | 1.26 | 1.89 |
(Thousands of Euro)
| Note | 31.12.2008 | 31.12.2007 | |
|---|---|---|---|
| ASSETS | |||
| Cash and balances with Central Banks | 13 | 3,450,947 | 3,263,612 |
| Due from banks | 14 | 2,829,970 | 3,509,696 |
| Financial assets at fair value through profit or loss | |||
| - Held for trading | 15 | 81,135 | 266,047 |
| Derivative financial assets | 16 | 485,026 | 383,432 |
| Loans and advances to customers | 17 | 50,704,702 | 42,072,071 |
| Investments securities | |||
| -Available for sale | 18 | 752,526 | 3,156,901 |
| -Held to maturity | 18 | 4,488,709 | - |
| Investments in associates | 19 | 59,260 | 5,320 |
| Investment property | 20 | 66,875 | 73,560 |
| Property, plant and equipment | 21 | 1,254,240 | 1,173,275 |
| Goodwill and other intangible assets | 22 | 159,961 | 134,497 |
| Deferred tax assets | 23 | 333,499 | 170,257 |
| Other assets | 24 | 549,299 | 385,676 |
| 65,216,149 | 54,594,344 | ||
| Non-current assets held for sale | 25 | 53,805 | 89,945 |
| Total Assets | 65,269,954 | 54,684,289 | |
| LIABILITIES | |||
| Due to banks | 26 | 8,963,796 | 4,437,736 |
| Derivative financial liabilities | 16 | 805,346 | 384,139 |
| Due to customers (including debt securities in issue) | 27 | 42,546,777 | 34,665,158 |
| Debt securities in issue held by institutional investors and other borrowed | |||
| funds | 28 | 7,241,185 | 9,189,297 |
| Liabilities for current income tax and other taxes | 29 | 128,062 | 158,797 |
| Deferred tax liabilities | 23 | 197,779 | 94,807 |
| Employee defined benefit obligations | 30 | 42,762 | 42,019 |
| Other liabilities | 31 | 1,350,287 | 1,323,554 |
| Provisions | 32 | 53,263 | 95,935 |
| 61,329,257 | 50,391,442 | ||
| Liabilities related to non-current assets held for sale | 25 | 1,583 | |
| Total Liabilities | 61,329,257 | 50,393,025 | |
| EQUITY | |||
| Equity attributable to equity holders of the Bank | |||
| Share capital | 33 | 1,931,590 | 1,602,809 |
| Share premium | 34 | 184,033 | |
| Reserves | 35 | 188,404 | 445,662 |
| Retained earnings | 36 | 969,815 | 1,138,195 |
| Treasury shares | 37 | (68,985) | (188) |
| 3,020,824 | 3,370,511 | ||
| Minority interest | 32,567 | 32,859 | |
| Hybrid securities | 38 | 887,306 | 887,894 |
| Total Equity | 3,940,697 | 4,291,264 | |
| Total Liabilities and Equity | 65,269,954 | 54,684,289 |
(Thousands of Euro)
| Note | Share capital |
Share premium |
Reserves | Retained earnings |
Treasury shares |
Total | Minority interests |
Hybrid securities |
Total equity |
|
|---|---|---|---|---|---|---|---|---|---|---|
| Balance 1.1.2007 Changes in equity for the period 1.1 - 31.12.2007 Net change in fair |
1,591,286 | 127,961 | 349,121 | 686,018 (14,653)2,739,733 | 44,280 829,654 3,613,667 | |||||
| value of available for-sale securities Net change in fair value available-for sale securities |
(38,613) | (38,613) | (38,613) | |||||||
| transferred to profit or loss from sales Foreign currency translation |
123,054 | 123,054 | 123,054 | |||||||
| differences for foreign operations |
68 | 68 | 68 | |||||||
| Net income recognized directly in equity |
84,509 | 84,509 | 84,509 | |||||||
| Net income for the | ||||||||||
| period after tax | 850,035 | 850,035 | 1,051 | 851,086 | ||||||
| Total Purchases/sales and change of ownership interests in |
84,509 | 850,035 | 934,544 | 1,051 | 935,595 | |||||
| subsidiaries Purchases/sales of |
(3,613) | (3,613) (11,395) | (15,008) | |||||||
| treasury shares and hybrid securities |
37, 38 | (18,197) | 14,465 | (3,732) | 58,240 | 54,508 | ||||
| Recognition of employee share options Exercise of |
19,487 | 19,487 | 19,487 | |||||||
| employee share options Issue of new shares |
34, 35 | 25,477 | (25,477) | |||||||
| due to share options exercise Dividends distributed to equity holders of |
33, 34 | 11,523 | 30,595 | 42,118 | 42,118 | |||||
| the Bank and minority interest Dividends paid to hybrid securities |
36 | (304,421) | (304,421) | (1,077) | (305,498) | |||||
| holders Transfer of reserves |
(36,827) | (52,996) 36,827 |
(52,996) | (52,996) | ||||||
| Appropriation to reserves Other |
35 | 54,849 | (54,849) (609) |
(609) | (609) | |||||
| Balance 31.12.2007 |
1,602,809 | 184,033 | 445,662 1,138,195 | (188)3,370,511 | 32,859 887,894 4,291,264 |
(Thousands of Euro)
| Note | Share capital |
Share premium |
Reserves | Retained earnings |
Treasury shares |
Total | Minority interests |
Hybrid | securities Total equity | |
|---|---|---|---|---|---|---|---|---|---|---|
| Balance 1.1.2008 |
1,602,809 | 184,033 | 445,662 1,138,195 | (188) 3,370,511 | 32,859 887,894 4,291,264 | |||||
| Changes in equity for the period 1.1 - 31.12.2008 |
||||||||||
| Net change in fair value of available for sale securities (after tax) |
(205,653) | (205,653) | (205,653) | |||||||
| Net change in fair value available-for sale reserve transferred to profit |
||||||||||
| or loss from sales | 33,655 | 33,655 | 33,655 | |||||||
| Foreign currency translation differences for foreign operations |
(132,924) | (132,924) | (132,924) | |||||||
| Net income | ||||||||||
| recognized directly in equity |
(304,922) | (304,922) | (304,922) | |||||||
| Profit for the period, after income tax |
512,067 | 512,067 | 1,380 | 513,447 | ||||||
| Total | (304,922) | 512,067 | 207,145 | 1,380 | 208,525 | |||||
| Share capital increase by capitalization of share premium and retained earnings |
33, 34, 36 | 328,781 | (184,033) | (144,748) | ||||||
| Expenses relating to the share capital |
||||||||||
| increase | (2,204) | (2,204) | (2,204) | |||||||
| Purchases/ sales and change of ownership interests in |
||||||||||
| subsidiaries Purchases/sales of |
(5,270) | (5,270) | (1,140) | (6,410) | ||||||
| treasury shares and hybrid securities |
37, 38 | (57,789) (68,797) | (126,586) | (588) | (127,174) | |||||
| Dividends distributed to equity holders of the Bank and minority interest |
36 | (362,199) | (362,199) | (532) | (362,731) | |||||
| Dividends paid to hybrid securities holders |
(58,575) | (58,575) | (58,575) | |||||||
| Appropriation to reserves |
35 | 47,664 | (47,664) | |||||||
| Other | (1,998) | (1,998) | (1,998) | |||||||
| Balance 31.12.2008 |
1,931,590 | 188,404 | 969,815 (68,985) 3,020,824 | 32,567 887,306 3,940,697 |
| (Thousands of Euro) | |||
|---|---|---|---|
| From 1 January to | |||
| Note | 31.12.2008 | 31.12.2007 | |
| Cash flows from operating activities | |||
| Profit before income tax | 625,633 | 985,263 | |
| Adjustments for: | |||
| Depreciation of property, plant and equipment | 20, 21 | 59,191 | 54,509 |
| Amortization of intangible assets | 22 | 29,758 | 23,745 |
| Impairment losses from loans and provisions | 614,490 | 237,398 | |
| Other adjustments | 1,932 | 19,487 | |
| (Gains)/losses from investing activities | 14,661 | 15,323 | |
| (Gains)/losses from financing activities | 43,338 | 53,487 | |
| Share of (profit)/loss of associates | (6,996) | (1,220) | |
| 1,382,007 | 1,387,992 | ||
| Net (increase)/decrease in assets relating to operating activities: | |||
| Due from banks | (186,744) | (240,602) | |
| Financial assets at fair value through profit or loss and derivative financial assets | 83,319 | (97,812) | |
| Loans and advances to customers | (9,260,424) | (10,050,212) | |
| Other assets | (162,254) | (13,071) | |
| Net increase/(decrease) in liabilities relating to operating activities: | |||
| Due to banks | 4,520,683 | (2,307,395) | |
| Derivative financial liabilities | 421,206 | 159,563 | |
| Due to customers | 6,255,366 | 6,216,867 | |
| Other liabilities | (11,239) | (33,841) | |
| Net cash flows from operating activities before taxes | 3,041,920 | (4,978,511) | |
| Income taxes and other taxes paid | (153,537) | (126,471) | |
| Net cash flows from continuing operating activities | 2,888,383 | (5,104,982) | |
| Cash flows from investing activities | |||
| Acquisitions of subsidiaries and associates | (140,550) | (22,387) | |
| Proceeds from sale of investments in subsidiaries and associates | 1,840 | 20 | |
| Dividends received | 4 | 2,591 | 2,254 |
| Purchase of property, plant and equipment | (225,253) | (183,060) | |
| Disposal of property, plant and equipment | 27,492 | 21,637 | |
| Net (increase)/decrease in investment securities | (2,394,454) | 4,451,770 | |
| Net cash flows from continuing investing activities | (2,728,334) | 4,270,234 | |
| Cash flows from financing activities | |||
| Equity increase from share options exercise | 42,118 | ||
| Expenses relating to the share capital increase | (2,204) | ||
| Dividends paid | (361,094) | (303,531) | |
| (Purchase)/sale of treasury shares | (122,140) | 11,466 | |
| Proceeds from the issue of loans | 100,000 | 677,038 | |
| Repayment of loans | (410,965) | (526,956) | |
| (Purchases)/sales of hybrid securities | (210) | 43,042 | |
| Dividends paid to hybrid securities holders | (58,575) | (52,996) | |
| Net cash flows from continuing financing activities | (855,188) | (109,819) | |
| Effect of exchange rate fluctuations on cash and cash equivalents | (83,256) | 67 | |
| Net increase /(decrease) in cash and cash equivalents from continuing | |||
| activities | (778,395) | (944,500) | |
| Net cash flows from discontinued operating activities | |||
| Net cash flows from discontinued investing activities | 160,700 | ||
| Net cash flows from discontinued financing activities | |||
| Net increase/(decrease) in cash and cash equivalents from discontinued | |||
| activities | 160,700 | ||
| Cash and cash equivalents at the beginning of the period | 13 | 3,792,031 | 4,575,831 |
| Cash and cash equivalents at the end of the period | 13 | 3,013,636 | 3,792,031 |
| The attached notes (pages 23 to 102) form an integral part of these consolidated financial statements. |
The Alpha Bank Group, which includes companies in Greece and abroad, offers services such as: banking, corporate and retail banking, financial services, investment banking and brokerage services, insurance services, real estate management, hotel activities. The parent company of the Group is ALPHA BANK A.E. which operates under the brand name of ALPHA BANK. The Bank's registered office is 40 Stadiou Street, Athens and it is listed as a societe anonyme with registration number 6066/06/B/86/05. The Bank's duration is until 2100 which can 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 parites, 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 term of the Board of Directors, elected by the Shareholders at the General Meeting of 19 April 2005, ends in 2010.
The General Meeting of Shareholders on 3 April 2008 approved the resolution to increase the number of the Directors from 14 to 15, as set out in the Bank's Articles of Incorporation and elected Mrs. Ioanna E. Papadopoulou as a non-executive member. It also elected Mr. Minas G. Tanes and Mr. George E. Agouridis as non-executive independent members. The Board of Directors as at 31 December 2008 consists of:
CHAIRMAN (Executive Member)
Yannis S. Costopoulos
VICE CHAIRMAN (Νon Εxecutive Independent Μember)
Minas G. Tanes***
MANAGING DIRECTOR Demetrios P. Mantzounis
EXECUTIVE DIRECTORS AND GENERAL MANAGERS Marinos S. Yannopoulos (CFO)*** Spyros N. Filaretos Artemis Ch. Theodoridis
Sophia G. Eleftheroudaki Paul G. Karakostas* Nicholaos I. Manessis ** Ioanna E. Papadopoulou
George E. Agouridis * Pavlos A. Apostolides ** Thanos M. Veremis Evangelos J. Kaloussis */*** Ioannis K. Lyras ** SECRETARY Hector P. Verykios
* Member of the Audit Committee
** Member of the Remuneration Committee
*** Member of the Risk Management Committee
The certified auditors of the semi-annual and year end financial statements are:
| Principal Auditors: | Marios T. Kyriacou |
|---|---|
| Nick E. Vouniseas | |
| Substitute Auditors: | Charalambos G. Sirounis |
| Nikolaos Ch. Tsiboukas |
of KPMG Certified Auditors A.E.
The Bank's shares are listed in the Athens Stock Exchange since 1925. As at 31 December 2008 Alpha Bank was ranked sixth in terms of market capitalization. Since February 2004 the Bank has been included in the FTSE Eurofirst 300 Index, an index which consists of the 300 largest European companies. Additionally, the Bank is included in a series of other indices, such as S&P Europe 350, FTSE Med 100, MSCI Europe, DJ Euro Stoxx and FTSE4 Good.
Apart from the listing in Greece, the shares of the Bank are listed in the London Stock Exchange in the form of international certificates (GDR's) and they are traded over the counter in New York (ADR's).
As at 31 December 2008 the Bank has 410,976,652 shares in issue.
During 2008 the shares liquidity amounted to an average 1,422,261 shares per day. The credit rating of the Bank is evaluated by three international credit rating agencies (Standard & Poor's: BBB+, Moody's: A2, Fitch Ratings: A-).
These consolidated financial statements relate to the fiscal year 1 January 2008 to 31 December 2008 and they have been prepared:
a) in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union in accordance with Regulation 1606/2002 of the European Parliament and the Council of the European Union on 19 July 2002 and
b) on the historical cost basis except for the following assets and liabilities which are measured at fair value:
The financial statements are presented in Euro, rounded to the nearest thousand unless otherwise indicated.
The estimates and judgments applied in preparing the financial statements are based on historical information and assumptions which at present are considered appropriate.
The estimates and assumptions are reviewed on an ongoing basis to take into account current conditions, and the effect of any revisions are recognized in the period in which the estimate is revised.
The accounting policies, applied by the Group in the financial statements as at 31 December 2008, are the same as those applied in the financial statements for the year ended 31 December 2007 after taking into account the following amendments to International Accounting Standards, and the new interpretations issued by the International Accounting Standards Board (IASB) and adopted by the European Union which are effective for annual periods beginning on or after 1.1.2008:
● Amendment of International Accounting Standard 39 «Financial Instruments: Recognition and Measurement» and the International Financial Reporting Standard 7 «Financial Instruments: Disclosures» regarding to the reclassification of financial assets (Regulation 1004/15.10.2008)
This amendment, issued on 13 October 2008, allows under specific conditions, the reclassification of certain financial assets to other categories with different measurement rules than those of the category in which the financial assets were classified upon initial recognition. This reclassification can be applied retrospectively from 1 July 2008. The Group made use of this amendment and the impact on the financial statements is set out to in note 17.
● Interpretation 11 «IFRS 2 – Group and treasury share transactions» (Regulation 611/1.6.2007)
The adoption of this interpretation did not have a significant impact on the financial statements.
● Interpretation 14 «IAS 19 – The limit on a defined benefit asset, minimum funding requirements and their interaction» (Regulation 1263/16.12.2008)
This interpretation defines when a surplus in a defined benefit plan can be recognized as an asset and to what extent the recognition is limited by any obligation to fund benefit that will accrue in the future.
The adoption of this interpretation did not have a significant impact on the Group's financial statements.
Apart from the above Standards and Interpretations, the European Union adopted the following standards and interpretations, which are effective for annual periods beginning after 1.1.2008 and which have not been early adopted by the Group.
● International Financial Reporting Standard 8 «Operating Segments» (Regulation 1358/21.11.2007) Effective for annual periods beginning on or after 1.1.2009
This standard replaces IAS 14 «Segment reporting». Its adoption by the European Union and by the Group will have an impact on the Group's disclosures relating to operating segments.
● Amendment of International Accounting Standard 23 «Borrowing costs» (Regulation 1260/10.12.2008) Effective for annual periods beginning on or after 1.1.2009
On 29 March 2007, the Board issued the revised IAS 23, which removes the option to expense borrowing costs directly attributable to the acquisition of assets that have a substantial period of time to be ready for use or sale. Such borrowing costs are capitalized as part of the cost of the asset.
Its adoption will not have a significant impact on the Group's financial statements.
i. Service conditions which are further distinguished to:
In addition, for each of the above categories the amendment defines when non-vesting conditions are taken into account in measuring the grant date fair value of the share-based payment as well as the respective accounting treatment. The adoption of this standard by the European Union and the Group, is not expected to have a significant impact on the financial statements.
● Amendment of International Accounting Standard 1 «Presentation of financial statements» (Regulation
Effective for annual periods beginning on or after 1.1.2009
On 6 September 2007, the Board published the revised version of IAS 1. The most significant changes are the following:
i. Introduction of a statement of comprehensive income. This statement includes the profit or loss of the period and all non-owner changes in equity. Entities may present a separate income statement, but all non-owner changes in equity must be presented in an additional statement.
ii. The statement of changes in equity, will include transactions between the entity and the equity holders.
iii. In the instances where a new accounting standard is retrospectively implemented or items are restated, the comparative figures must include the opening and closing balance sheet of the prior year.
The adoption of this Standard by the European Union and the Group will affect the presentation of financial statements.
Effective for annual periods beginning on or after 1.1.2009
With the implementation of the above amendment, issued on 14 February 2008, financial instruments that give the holder of the financial instrument the right to require the issuer to repurchase or repay the financial instruments may be classified as equity if certain conditions are met. A similar classification, under certain condition, is also possible for financial instruments where the holder is entitled to a pro-rata share of the net assets of the entity only on liquidation. This amendment requires additional disclosures on the financial statements.
The Group is examining whether there will be an impact from the adoption of the above amendment in the financial statements.
● Amendment of International Accounting Standard 27 «Consolidated and Separate Financial Statements» and the International Financial Reporting Standard 1 «First Time Adoption of International Financial Reporting Standards» regarding the cost of an investment in a subsidiary, associate and jointly controlled entity. Effective for annual periods beginning on or after 1.1.2009 (Regulation 69/23.1.2009).
With this amendment, issued by the Council on 22 May 2008, the cost of an investment in a subsidiary, associate or joint venture in the investor's separate financial statements will not be adjusted for distributions of profits relating to periods prior to acquisition. These profit appropriations will be accounted in income statement as dividend income. This amendment also made changes to IAS 36 - Impairment of Assets, where indications of impairment on investments were included, based on the effect of dividend distribution on equity.
With regard to the first time adopters of IFRS and in order to facilitate the issuance of financial statements, options are given on the cost measurement of an investment in a subsidiary, associate and jointly controlled entity based on either their fair value at the date of transition or their previous GAAP carrying amount.
The amendment will make changes in accounting policies for recognition of dividend's income and determination of the cost of acquisition of Group's investments.
● Interpretation 13 «Customer loyalty programs» (Regulation 1262/16.12.2008)
Effective for annual periods beginning on or after 1.7.2008
This interpretation, issued on 28 June 2007, addresses the accounting of customer loyalty programs offered by entities to customers as an incentive to increase sales or revenues. In particular, it states that the value of credits awarded to customers must be separated from the initial sale and be recognized as revenue when the credits are redeemed. In cases where the entity collects amounts on behalf of third parties who grant reward points to the entity's customers, these should be accounted for as a liability to third parties.
The adoption of this interpretation is not expected to have a significant impact on the Group's financial statements.
As part of the improvements project the International Accounting Standards Board issued on 22 May 2008, certain non urgent but necessary amendments to various standards. The majority of these are effective for annual periods beginning on or after 1.1.2009.
The adoption of these improvements is not expected to have a significant impact on the Group's financial statements.
In addition, the International Accounting Standards Board (IASB) has issued the following standards and interpretations which have not yet been adopted by the European Union and they have not also been early adopted by the Group.
● Amendment of International Accounting Standard 27 – «Consolidated and Separate Financial Statements» and International Financial Reporting Standard 3 «Business combinations»
Effective for annual period beginning on or after 1.7.2009
The main changes from the amended standards issued on 10 January 2008, are summarized as follows:
i. In cases of changes in ownership interests of subsidiaries with which control is obtained or lost, the value of the investment existed prior to the change of ownership interest or the remaining ownership interest, should be measured at fair value with changes recognized in profit and loss account.
ii. Upon initial recognition non-controlling interest might be measured at fair value. In addition non-controlling interest should absorb the total losses incurred attributable to their interest.
iii. Any contingent consideration of an entity is recognized as a liability and measured at fair value.
iv. Costs incurred by the acquirer are not included in the cost of a business combination but are expensed.
Finally, changes in a parent's ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. The Group has already implemented the above accounting treatment (relevant note 1.2).
● Amendment of International Financial Reporting Standard 1 «First time adoption of International Financial Reporting Standards»
Effective for annual periods beginning on or after 1.7.2009.
On 27 November 2008 IASB published a revised edition with a change in the structure of this standard. The purpose of this change was to improve information and to facilitate implementation of future amedments. This revised edition does not apply to the Group's financial statements.
● Amendment of International Accounting Standard 39 «Financial Instruments: Recognition and Measurement» concerning eligible hedged items.
Effective for annual periods beginning on or after 1.7.2009.
This amendment issued on 31 July 2008 provides clarifications regarding the application of hedge accounting. It is clarified that in a fair value hedge or a cash flow hedge the following can be designated as hedged items:
The Group is examining whether there will be an impact from the adoption of the above amendment in the financial statements.
● Interpretation 12 «Service concession arrangements»
Effective for annual periods beginning on or after 1.1.2008
The interpretation issued on 30 November 2006, clarifies issues relating to the recognition and valuation of assets arising from service concession agreements of public infrastructure. This interpretation does not apply in Group's activities.
Effective for annual periods beginning on or after 1.1.2009
This interpretation issued on 3 July 2008 provides guidance on how to determine whether an agreement for the construction of real estate or agreements with buyers before the completion of real estate construction is within the scope of IAS 11 (construction contracts) or IAS 18 Revenue (as contracts to provide services or sell goods).
The adoption of this interpretation will have no impact on the financial statements since it does not apply to the Group.
Effective for annual periods beginning on or after 1.10.2008.
This interpretation, issued on 3 July 2008, provides clarifications regarding the application of hedge accounting of the net investment in a foreign operation which has different functional currency from that of the parent.
This interpretation is not expected to have a significant impact on the consolidated financial statements.
● Interpretation 17 «Distribution of non-cash assets to owners»
Effective for annual periods beginning on or after 1.7.2009
This interpretation, issued on 27 November 2008, provides guidance to an entity in order to recognize and subsequent measure a liability arising from the distribution of non-cash assets to owners. The Group is in the process of evaluating the potential effects of this interpretation.
● Interpretation 18 «Transfer of assets from customers»
Effective for annual periods beginning on or after 1.7.2009
This interpretation, issued on 29 January 2009, clarifies the accounting treatment for agreements under which an entity receives from a customer an item of property, plant and equipment that the entity must then use to serve conventional obligations to him. The interpretation applies also, in cases where the entity receives cash from customers to construct or to buy an item of property, plant and equipment to be used as defined above. This interpretation does not apply to Group activiities.
The consolidated financial statements include the parent company Alpha Bank, its subsidiaries, associates and joint ventures.
Subsidiaries are entities controlled, directly or indirectly, by the Bank. The Group assesses control based on voting rights which are presently excercisable and the power to govern the financial operating policies of the entities. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.
The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. When the cost of acquisition exceeds the fair value of the Group's share of the identifiable net assets acquired the excess is recorded as goodwill, which is tested for impairment annually. If the cost of acquisition is less than the fair value of the identifiable net assets of the subsidiary acquired, the difference is recognized directly in the income statement.
When the Group's interest in a subsidiary increases as a result of an acquisition, the difference between the consideration paid and the share of net assets acquired is recognized directly to retained earnings.
Sales of ownership interests in subsidiaries that do not result in a loss of control for the Group, is considered as a transaction between equity parties and the gain or loss arising from the sale is recognized directly to retained earnings.
Special purpose entities are consolidated when the substance of the relationship between the Bank and the entity indicates that the entity is controlled by the Bank.
In assessing control, besides voting rights and the power to govern the financial and operating policies, the following circumstances may indicate a relationship in which, in substance, the Group controls the SPE:
i. the activities of the SPE are being conducted on behalf of the Group according to its specific business needs so that the Group obtains benefits from the SPE's operation,
ii. the Group has the decision-making powers to obtain the majority of the benefits of the activities of the SPE,
iii. the Group has rights to obtain the majority of the benefits of the SPE and therefore may be exposed to risks incident to the activities of the SPE.
iv. the Group retains the majority of the residual or ownership risk related to the SPE or its assets in order to obtain benefits from its activities.
The Group, according with the voting rights or the above mentioned circumstances controls the special purposes entities which are used for the issuance of debt and the securitization of financial assets.
Accounting policies of subsidiaries have been adjusted when neceassry to ensure consistency with the policies of the Group.
Associates are entities over which the Group has significant influence but not control, generally accompanying a shareholding, directly or indirectly, of between 20% and 50% of the voting rights.
Investments in associates are accounted for by the equity method of accounting.
The Group's share of the associates post-acquisition profits or losses is recognized separately in the income statement. Accounting policies of associates have been adjusted where necessary to ensure consistency with the policies of the Group.
According to IAS 31, «joint ventures are those entities over whose activities, the Group has joint control, established by contractual agreement whereby two or more parties undertake an economic activity».
The consolidated financial statements include the Group's share of the joint venture under the proportionate consolidation method.
Inter company transactions are eliminated unless the transaction provides evidence of impairment of the asset transferred and it is recognized in the consolidated balance sheet.
Details of the entities and the Group's ownership interest of subsidiaries, associates and joint ventures is provided in note 40.
The Group after considering the present management and reporting structure, and that the majority of its income arises from activities in Greece decided that:
Detailed information relating to business and geographical segments is presented in note 41.
The consolidated financial statements are presented in Euro, which is the functional currency and the currency of the country of incorporation of the parent company Alpha Bank.
Items included in the financial statements of the subsidiaries are measured using the currency of the country of incorporation or the currency of the primary economic environment in which the company operates or the currency used for the majority of transactions held.
Transactions in foreign currencies are translated to the functional currency of each subsidiary at the closing exchange rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to the functional currency at the closing exchange rate at that date. Foreign exchange differences arising on translation are recognized in the income statement.
Non-monetary assets and liabilities are recognized at the exchange rate ruling at initial recognition, except for non-monetary items denominated in foreign currencies that are stated at fair value. The exchange differences relating to these items are part of the change in fair value and they are recognized in the income statement or recorded directly in equity depending on the classification of the non-monetary item.
The financial statements of all group entities that have a functional currency that is different from the presentation currency of Group financial statements are translated as follows:
i. Assets and liabilities are translated to Euro at the closing rate applicable on the balance sheet date. The comparative figures presented are translated to Euro at the closing rates at the respective date of the comparative balance sheet.
ii. Income and expense items are translated to Euro at average exchange rates applicable for each period presented.
The resulting exchange difference from the retranslation and those arising from other monetary items designated as a part of the net investment in the entity are recorded in equity. When a foreign subsidiary is sold, the exchange differences are recognized in the income statement as part of the gain or loss on sale.
For the purposes of the consolidated cash flow statement, cash and cash equivalents consists of:
Short-term balances due from banks are amounts that mature within three months of the balance sheet date.
The Group, upon initial recognition measures financial assets at fair value plus, in case of securities not at fair value through profit or loss, incremental direct transaction costs.
The Group classifies its financial assets as:
For each of the above classifications the following is applicable:
In this category, the Group has included:
iii. all receivables from customers, banks etc.
This category is measured at amortized cost.
Held-to-maturity investments are financial assets that the Group has the positive intent and ability to hold to maturity.
In this category, the Group has included bonds and other debt securities with fixed maturity and fixed or determinable cash flows.
This category is carried at amortized cost.
Financial assets included in this category are:
i. Financial assets which are acquired principally for the purpose of selling in the near term for short term profit (held for trading).
The Group has included in this category fixed rate Greek Government bonds and treasury bills, except for certain specific issues, for which different decisions have been taken, and a limited number of shares.
ii. The Group, at initial recognition, designates these financial assets at fair value and recognizes changes in the fair value in the income statement.
This classification is used in the following cicrumstances:
• When management monitors and manages the financial instruments on a fair value basis in accordance with a documented risk management or investment strategy.
• When the designation eliminates an accounting mismatch which would otherwise arise from measuring financial assets and liabilities on a different basis (i.e. amortized cost) in relation to another financial asset or liability (i.e. derivatives which are measured at fair value through the profit or loss).
• When the financial instrument contains an embedded derivative that significantly modifies the cash flows, or the separation of these derivatives from the main financial instruments is not prohibited.
Available-for-sale financial assets are investments that have not been classified in any of the previous categories.
The Group has included in this category:
i. Variable debt securities and interest rate bonds
ii. Certain issues of fixed rate Greek Government bonds, for which a specific decision has been taken, and fixed rate bonds of other issuers
iii. Shares and
iv. Mutual fund units
This category is measured at fair value. Changes in fair value are recognized directly in equity until the financial asset is sold or impaired where upon the cumulative gains and losses previously recognized in equity are recognized in profit or loss. The financial assets included in this category are reviewed at each balance sheet date to determine whether there is any indication of impairment. When a subsequent event causes the amount of impairment loss on an available-for-sale debt security to decrease, the impairment loss is reversed through profit or loss. An impairment loss is reversed through the profit or loss if it can be objectively related to an event occurring after the impairment loss was recognized. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognized in equity. The measurement principles noted above are not applicable when a specific financial asset is the hedged item in a hedging relationship, in which case the principles set out in note 1.7.
Reclassification of non-derivative financial assets is permitted as follows:
i. Reclassification out of the held-for-trading category to the loans and receivable category, investments held to maturity category or available-for-sale category is permitted only in rare circumstances and the financial assets are no longer held for sale in the foreseeable future.
ii. Reclassification out of held-for-trading category to either loans and receivables, or available-for-sale is permitted only if the financial assets meet the definition of loans and receivables and there is the intention to hold them for the foreseeable future or until maturity.
iii. Reclassification out of available-for-sale category to the loans and receivables category, is permitted for financial assets that would have met the definition of loans and receivables and the entity has the intent to hold the financial asset for the foreseeable future or until maturity.
iv. Reclassification out of available-for-sale category to the held to maturity category, is permitted for financial assets that meet the relevant characteristics and the entity has the intent and ability to hold that financial asset until maturity.
Reclassification out of the held-to-maturity category to other categories is not permitted. Any sale or reclassification of a more than insignificant amount of held-to-maturity investment would result in the reclassification of all held-to-maturity investments as available-for-sale, and also this would result in a prevention from classifying securities as held-for-maturity for the current and the following two financial years.
The Group has reclassified certain financial assets which is analysed in notes 17 and 18.
The Group derecognizes financial assets when:
• the cash flows from the financial assets expire.
• when it transfers the contractual right to receive the cash flows of the financial asset and at the same time it transfers both risks and rewards of ownership.
• when loans or investments in securities are no longer recoverable and consequently written off.
In the case of transactions, where despite the transfer of the contractual right to recover the cash flows from financial assets, both the risk and rewards remain with the Group no derecognition of these financial assets occurs. The amount received by the transfer is recognized as a financial liability. The accounting practises followed by the Group in such transactions are discussed further in notes 1.20 and 1.21.
In the case of transactions, whereby the Group neither maintains nor transfers risks and rewards of the financial assets, but retains control they are recognized, to the extent of the Group's continuing involvement. If the Group does not retain control of assets then their derecognition occurs, and in their position, it recognizes, distinctively, the assets and liabilities which are created or retained during the transfer. No such transactions occurred upon balance sheet date.
Derivatives are financial instruments that upon inception have a minimal or zero value and subsequently change in accordance with a particular underlying instrument (foreign exchange, interest rate, index or other variable).
All derivatives are recognized as assets when their fair value is positive, and as liabilities when their fair value is negative.
Derivatives are entered into for either hedging or trading purposes and they are measured at fair value irrespective of the purpose for which they have been transacted.
In the cases when derivatives are embedded in other financial instruments, such as bonds, loans, deposits, borrowed funds etc and the host contract is not itself carried at fair value through profit or loss then they are accounted for as separate derivatives when the derivative is not closely related to the host contract. These embedded derivatives are measured at fair value and are recognized as derivative assets or liabilities.
In the cases where derivatives embedded in financial instruments have been designated at fair value through profit or loss, the changes in the fair value of the derivative is included in the fair value change of the combined instrument and recognized in gains less losses on financial transactions.
The Group uses derivatives as a means of exercising asset-liability management within the guidelines established by the Asset-Liability Committee (ALCO).
In addition the Group uses derivatives for trading purposes to exploit short-term market fluctuations, within the Group risk level set by the Asset-Liability Committee (ALCO)
Valuation differences arising from these derivatives are recognized in gains less losses on financial transactions.
When the Group uses derivatives for hedging purposes it ensures that appropriate documentation exists on inception of the transaction, and that the effectiveness of the hedge is monitored on an ongoing basis and the above are repeated at each balance sheet date.
We emphasize the following:
The parent company (Alpha Bank), in order to increase the return on deposits to selected customers, uses synthetic swaps.
This involves the conversion of a Euro deposit to JPY with a simultaneous forward purchase of JPY to cover the foreign exchange exposure.
The result arising from the forward foreign exchange is recognized as interest expense, foreign exchange differences and other gains less losses on financial transactions.
These types of swaps are entered into primarily to hedge the exposures arising from customer loans and deposits.
As there is no documentation to support hedge accounting they are accounted for as trading instruments.
The result arising from these derivatives is recognized as interest, foreign exchange differences, in order to match with the interest element resulting from the deposits and loans, and other gains less losses on financial transactions.
Hedge accounting establishes the valuation rules to offset the gain or loss of the fair value of a hedging instrument and a hedged item which would not have been possible if the normal measurement principles were applied.
Documentation of the hedge relationship upon inception and of the effectiveness of the hedge on a on-going basis are the basic requirements for the adoption of hedge accounting.
The hedge relationship is documented upon inception and the hedge effectiveness test is carried out upon inception and it is repeated at each reporting date.
A fair value hedge of a financial instrument offsets the change in the fair value of the hedged item in respect of the risks being hedged. Changes in the fair value of both the hedging instrument and the hedged item in respect of the specific risk being hedged are recognized in the income statement.
When the hedge relationship no longer exists, the hedged items are remeasured based on the classification and valuation principles set out in notes 1.6 and 1.16.
Specifically any adjustment, up to the point that the hedge relationship ceases to be effective, to a hedged item for which the effective interest method is used, is amortized to interest income or expense based on a recalculated effective interest rate of the item, over its remaining life.
The Group uses interest rate swaps (IRS's) to hedge risks relating to borrowings, bonds, loans and fixed rate term deposits.
A cash flow hedge changes the cash flows of a financial instrument from a variable rate to a fixed rate.
The effective portion of the gain or loss on the hedging instrument is recognized directly in equity, whereas the ineffective portion is recognized in profit or loss. The accounting treatment of the hedged item does not change.
There were no instances that would require cash flow hedge accounting.
The Group uses foreign exchange derivatives or borrowing to hedge foreign exchange risks arising from investment in foreign operations.
Hedge accounting of net investment in foreign operation is similar to cash flow hedge accounting. In cases where the hedge relationship no longer exists the cumulative gain or loss recognized in equity is reversed and recognized in profit or loss, at the time the disposal of the foreign operation takes place.
This caption includes: land, buildings (owned and leased) for use by the branches or for administrative purposes, additions and improvements of leased fixed assets and equipment. Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
Cost includes expenditures that are directed attributable to the acquisition of the asset.
Subsequent expenditure is recognized in carrying amount of the item when it increases future economic benefit. Expenditure on repairs and maintenance is recognized in profit or loss as an expense as incurred.
Depreciation is charged on a straight line basis over the estimated useful lives of property, plant and equipment.
The estimated useful lives are as follows:
Land is not depreciated.
The right to use of land for indefinite period that is held by Alpha Real Estate D.O.O. Belgrade, a subsidiary of the Group, is recorded as land and is not depreciated. The residual value of property and equipment and their useful lives are periodically reviewed and adjusted if necessary at each reporting date.
Property, plant and equipment are reviewed at each reporting date to determine whether there is an indication of impairment and if they are impaired the carrying amount is adjusted to its recoverable amount with the difference recorded in profit or loss.
Gains and losses from the sale of property and equipment are recognized in profit or loss.
The Group includes in this category buildings or a portion of buildings together with the respective portion of the land that is held to earn rental income.
Investment property is measured at cost, which includes all expenditures directly attributable to the acquisition.
After initial recognition investment property is measured at cost less accumulated depreciation and impairment losses.
All costs for repairs and maintenance are recognized in profit or loss as incurred.
The estimated useful lives over which depreciation is calculated using the straight line method, are the same as those applied to property, plant and equipment.
Goodwill represents the difference between the cost of an acquisition and the fair value of the net identifiable assets acquired.
Positive goodwill arising from acquisitions after 1/1/2004 is recorded to "Goodwill and other intangible assets". Goodwill on acquisitions of associates is included in "Investment in associates".
At the end of each fiscal year recognized goodwill is tested for impairment.
Negative goodwill is recognized in profit or loss.
The Group has included in this caption:
a) Intangible assets (deposit base, relationships with customers and brand name) which were recognized from the acquisition of the Serbian Bank Jubanka A.D. Beograd (currently Alpha Bank Srbija A.D.) in accordance with IFRS 3.
The intangible assets are carried at cost less accumulated amortization. The amortization is charged over the estimated useful life of each asset which is as follows:
b) Software, which is carried at cost less accumulated amortization. Amortization is charged over the estimated useful life which the Group has estimated between 3 to 4 years. Expenditure incurred to maintain the software programs is recognized in the income statement as incurred.
c) Brand names and other rights are carried at cost less accumulated amortization. The amortization is charged over the estimated useful life which the Bank has defined to 5 years.
Intangible assets are measured at cost less accumulated amortization, excluding those with indefinite useful life, which are not amortized. All intangible assets are subject to an impairment test.
For intangible assets no residual value is estimated.
The Group enters into leases either as a lessee or as a lessor.
When the risks and rewards incident to ownership of an asset are transferred to the lessee they are classified as finance leases.
All other lease agreements are classified as operating leases.
The accounting treatment followed depends on the classification of the lease, which is as follows:
For finance leases where the Group is the lessor the aggregate amount of lease payments is recognized as loans and advances.
The difference between the present value (net investment) of lease payments, and the aggregate amount of lease payments, is recognized as unearned finance income and is deducted from loans and advances.
The lease rentals received decrease the aggregate amount of lease payments and finance income is recognized on an accrual basis.
The finance lease loans are subject to the same impairment testing as applied to customer loans and advances as described in note 1.13.
When the Group is a lessor of assets under operating leases, the leased asset is recognized and depreciation is charged over its estimated useful life. Income arising from the leased asset is recognized as other income on an accrual basis.
For finance leases, where the Group is the lessee, the leased asset is recognized as property, plant and equipment and a respective liability is recognized in other liabilities.
At the commencement of the lease the leased asset and liability are recognized at amounts equal to the fair value of leased property or, if lower, the present value of the minimum lease payments. The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease or if this is not available the Group's borrowing rate for similar financing.
Subsequent to initial recognition the leased assets are depreciated over their useful lives unless the duration of the lease is less than the useful life of the leased asset and the Group is not expected to obtain ownership at the end of the lease, in which case the asset is depreciated over the term of the lease.
The lease payments are apportioned between the finance charge and the reduction of the outstanding liability.
For operating leases, the Group as a lessee does not recognize the leased asset but charges in general administrative expenses, the lease payments on an accrual basis.
The insurance reserves are the current estimates of future cash flows arising from insurance life and non-life contracts. The reserves consist of:
The insurance reserves for the term life contracts (e.g. term, comprehension, investment) are calculated on actuarial principles using the present value of future liabilities less the present value of premiums to be received.
The calculations are based on technical assumptions (mortality tables, interest rates) in accordance with the respective supervisory authorities on the date the contract was signed.
If the carrying amount of the insurance reserves is inadequate, the entire deficiency is provided for.
Represent part of net premiums earned which cover proportionally the period from the balance sheet date to the termination of the period the net premium covers.
Concern liabilities on claims occurred and reported but not yet paid at the balance sheet date. These claims are determined on a case-by-case basis based on existing information (loss adjustors' reports, doctors reports, court decisions etc) at the balance sheet date.
Provisions are also determined for claims incurred but not reported at the balance sheet date (IBNR), the calculation of these provisions is based on the estimated average cost of claim.
These reserves are accounted for as assets and liabilities at the current value of the associated investments.
Revenue from life and non-life insurance contracts is recognized when it becomes payable.
The reinsurance premiums ceded and the respective ceded portion of the insurance reserves follow the terms of the relevant reinsurance agreements.
In accordance with IFRS 4 contracts that do not transfer significant insurance risk are characterized as investment and/or service contracts, and their accounting treatment is covered by IAS 32 and IAS 39 for financial instruments, and IAS 18 for revenue.
Based on the above the following were separated from insurance services:
In accordance with IFRS 4 an insurer shall assess at each reporting date whether its recognized insurance reserves are adequate less deferred acquisition costs to cover the risk arising from the insurance contracts.
If that assessment shows that the carrying amount of its insurance reserves is inadequate, the entire deficiency is recognized in profit or loss.
The methodology applied for life insurance was based on current estimates of all future cash flows from insurance contracts and of related handling costs. These estimates were based on assumptions representing current market conditions and regarding mortality, cancellations, future changes and allocation of administrative expenses, medical inflation relating to medical changes and the discount rate. The guaranteed return included in certain insurance contracts has also been taken into account in estimating cash flows.
For the liability adequacy test of claims reserves, the triangulation method (chain-ladder/link ratio) was used which is based on the assumption that the proportional relation occurred in past years between the amounts of cumulative claims (paid and outstanding) will be repeated in the future. Data of the last five years were used for the calculation of the relevant test.
The Group assess as at each balance sheet date, whether there is evidence of impairment in accordance with the general principles and methodology set out in IAS 39 and the relevant implementation guidance.
Specifically, the steps performed are the following:
The loans and advances with payment of interest or principal overdue by more than 90 days represents the majority of the loans which are tested for impairment.
In addition an impairment test may be performed for accounts with delays less than 90 days, or accounts with no delay when:
i. procedures for forced recovery and settlement of debts, with more burdensome conditions on the Group, have been initiated or
ii. the Group has information that indicates that the financial position of the borrower is deteriorating (reduced sales, gross margins, profit etc.) or other events (bankruptcy filing, extra-ordinary events such as floods, fire, etc at the installations of the borrower) which occurred after the date of initial recognition and which are considered to affect the ability of the borrower to adhere to the agreed repayment schedule.
Finally, an impairment test is performed on loans and advances granted to sectors of the economy or geographical regions which are experiencing problems that arose after the date of initial recognition of the loans.
The outstanding balance is the basic factor in determining whether the assessment of impairment will be performed on an individual basis or on a collective basis.
In determining the amount for each entity of the Group numerous factors are considered such as the composition of the loan portfolio, the specific circumstances of the market and experience obtained from the management of the portfolio.
More specifically for the Group's parent company Alpha Bank the separation point is the amount of € 1 million.
In those instances whereby based on the amount outstanding the assessment of impairment is performed on a collective basis of assets with similar risk characteristics, with respect to credit risk, the collective groups were determined as follows:
i. buckets arising from ageing analysis of loans and advances to customers.
ii. the type of loan (consumer, credit cards, mortgage etc.) for retail loans.
Based on detailed internal data the above groups are either expanded or combined in the event that this is justified from the historical data.
The Group has accumulated a significant amount of historical data of the last six years, which includes the loss given default for loans after the completion of forced recovery, or other measures taken to secure collection of loans, including the realization of collaterals.
On the basis of this data the amount of the impairment is determined on both an individual and collective basis taking into account the time value of money.
The cash flows are discounted at the loans' original effective interest rate.
Interest income on impaired loans is recognized based on the carrying value of the loan net of impairment at the original effective interest rate.
Impaired loans are usually written-off, with the exception of a small number of accounts with large outstandings where an allowance account is established.
If in a subsequent period after the recognition of the impairment loss, events occur which require the impairment loss to be reduced, or there has been a collection of amounts from loans and advances previously written-off, the recoveries are recognized in profit and loss account.
Deferred taxation is the tax that will be paid, or for which relief will be obtained in future periods from the different period that certain items are recognized for financial reporting purpose and for taxation purposes. Deferred tax is provided for temporary differences between the tax base of assets and liabilities and their respective carrying amounts in the financial statements.
Deferred tax assets and liabilities are calculated using the tax rates that are expected to apply the temporary difference reverses, based on the tax rate (and laws) enacted at the balance sheet date.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.
Deferred tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.
Non-current assets or disposal group comprise assets and liabilities that are expected to be recovered primarily through sale and therefore they are classified as held-for-sale.
These items consist of:
Before their classification as held for sale, the assets are remeasured in accordance with the respective accounting policy. Thereafter they are measured at the lower of their carrying amount and fair value less cost of sale.
Any loss arising from the above measurement is recorded in the profit or loss. This loss which can be reversed in the future, is allocated to assets in the disposal group that are within the scope of the measurement requirements of the Standard. The impairment loss on a disposal group first is allocated to goodwill and then to remaining assets and liabilities on a pro-rata basis.
Property in this category is not depreciated, however, it is reviewed for impairment at each reporting date.
Gains or losses from the sale of these assets are recognized in the income statement.
At initial recognition financial liabilities are measured at fair value plus, for financial liabilities which are not measured at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue
The Group for measurement purposes classifies financial liabilities in the following categories:
i. This category includes financial liabilities held for trading:
ii. In addition in this category the Group includes financial liabilities which are designated at initial recognition, as fair value through profit or loss in accordance to the principles set in note 1.6 (point cii).
The Group has included in the category of financial liabilities held for trading, derivatives which are not used for hedging purposes.
Liabilities arising from both the derivatives held for trading and derivatives which are used for hedging purposes are presented in "derivative financial liabililties" and measurement principles are set out in note 1.7.
At present no financial liabilities have been designated, at initial recognition, as at fair value through profit or loss.
The liabilities which are classified in this category are measured at amortized cost using the effective interest method.
Liabilities to credit institutions and customers, debt securities in issue and other loan liabilities are classified in this category.
If financial liabilities included in this category are the hedged item in a hedge relationship the accounting principles applied are those set out in note 1.7.
The Group derecognizes a financial liability (or part thereof) when its contractual obligations are discharged or cancelled or expire.
The difference between the book value of a financial liability that has been repaid or transferred and the consideration paid is recognized in the financial results.
The Group has both defined benefit and defined contribution plans. A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement which is dependent, among others, on years of service and salary on date of retirement and it is guaranteed by the Bank.
A defined contribution plan is where the Group pays fixed contributions into a separate entity and the Group has no legal or constructive obligation to pay further contributions if the fund does not have sufficient assets to pay all employees the benefits relating to employee service in current or prior years.
The liability recognized in the consolidated financial statements in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets together with adjustments for unrecognized actuarial gains or losses and past service costs.
The defined benefit obligation is calculated annually based on actuarial valuation performed by independent actuaries using the projected unit credit method.
Cumulative actuarial gains and losses arising from experience adjustments and changes, and actuarial assumption variations to the extent that they exceed 10 per cent of the greater of the accrued obligation or the fair value of plan assets are amortized over the period equal to the average remaining working lives of the employees.
Past-service costs are recognized immediately in the income statement, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In the second case, the past service costs are amortized on a straight line basis over the vesting period.
For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans, to insurance companies and other funds on a mandatory or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense on an accrual basis. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available.
The Group rewards the performance of its executives and managers by granting share options. The number of granted share options, the price and the exercise date are decided from the Board of Directors in accordance to Shareholders' Meeting approvals.
The fair value calculated at grant date, is recognized over the period from the grant date and exercise date and recorded as an expense in payroll and related costs with an increase of a reserve in equity respectively. The amount paid by the beneficiaries of share options on the exercise date increases the share capital of the Group and the reserve in equity from previously recognized fair value of the exercised options is transferred to share premium.
A provision is recognized if as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future cash flows. The discount rate applied reflects current market assessments of the time value of money required to settle the obligation. Cash payments are recorded to provisions to the extent that they relate to the specific provision. At each reporting period provisions are re-assessed.
Provisions are not recognized for future operating losses.
Future events that may affect the amount required to settle the obligation, for which a provision has been recognized, are taken into account when sufficient objective evidence exists that they will occur.
Reimbursements from third parties relating to a portion of or all of the estimated cash outflow are recognized as assets, only when it is virtually certain that they will be received. The expense recognized in the profit or loss relating to the provision may be presented net of the amount of the reimbursement.
The Group enters into purchases of securities under agreements to resell at a certain date in the future at a fixed price. Securities purchased subject to commitments to resell them at future dates are not recognized as investments.
The amounts paid are recognized in loans and advances to either banks or customers. The difference between the purchase price and the resale price is recognized as interest on an accrual basis.
Securities that are sold under agreements to repurchase continue to be recognized in the consolidated balance sheet and are measured in accordance with accounting policy of the category that they have been classified and are presented as investments.
The proceeds from the sale of the securities are reported as liabilities to either banks or customers. The difference between the sales price and the repurchase price is recognized on an accrual basis as interest.
Securities borrowed by the Group under securities lending agreements are not recognized in the consolidated balance sheet except when they have been sold to third parties whereby the liability to deliver the security is recognized and measured at fair value.
The Group securitises financial assets, by transferring these assets to special purpose entities, which in turn issue bonds.
In each securitization of financial assets the assessment of control of the special prupose entity is considered, based on the circumstances mentioned in note 1.2, so as to examine whether it should be consolidated. In addition, the contractual terms and the economic substance of transactions are considered, in order to decide whether the Group should proceed with the derecognition of the securitised financial assets, as referred in note 1.6.
Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.
The difference between the nominal value of the shares issued and their market value, in cases of the exchange of shares as consideration for the acquisition of a business by the Group is recorded as share premium.
This also includes the difference between the nominal value of the shares and the cost consideration received in the case of a share capital increase.
The cost of acquiring treasury shares is recognized as a reduction of equity. Subsequent gains or losses from the sale of treasury shares, after deducting all direct costs and taxes, is recognized directly in retained earnings.
Dividends are deducted from retained earnings and recorded as a liability in the period that the dividend is approved by the shareholders in general meeting.
Interest income and expense is recognized in the income statement for all instruments measured at amortized cost.
The recognition of interest income and expense is performed on the accrual basis using the effective interest rate method.
The effective interest rate method is a method of calculating the amortized cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period.
The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or the next repricing date, in order the present value of the future cash flows to be equal to the carrying amount of the financial instrument including fees or transaction costs.
Interest on financial assets that are impaired is determined on the balance after the impairment provision using the effective interest rate.
Interest income and expense is also calculated for interest bearing financial instruments that are measured at fair value.
Fee and commission income are recognized on a accrual basis when the relevant service has been provided.
Transaction revenues relating to the recognition of a financial instrument which measured at amortized cost, such as loans and advances, are capitalized and recognized in the income statement using the effective interest method.
A discontinued operation is a component of the Group that either has been disposed of, or it has been classified as held for sale and represents:
The assets and liabilities of discontinued operation are presented separately from other assets and liabilities in balance sheet and are not offset.
Any cumulative income or expense recognized directly in equity relating to a discontinued operation are presented separately (as a separate line in equity).
The post tax profit or loss from discontinued operations and any losses recognized on the measurement to fair value less costs to sell of the disposal group are presented in a separate line in the face of the income statement after net profit from continuing operations.
The comparative financial statements are restated only for the income statement and the cash flow statement.
The Group has classified in 2006 its subsidiary Alpha Insurance A.E. representing significant line of Asset Management/Insurance business segment as a discontinued operation based on the signed agreement of sale to the insurance company AXA, reached on February 2008.
To the extent considered necessary the comparatives have been adjusted to facilitate changes in presentation of the current year amounts.
| 2. Net interest income | |||
|---|---|---|---|
| From 1 January to | |||
| Interest and similar income | 31.12.2008 | 31.12.2007 | |
| Due from banks | 201,868 | 286,634 | |
| Loans and advances to customers | 3,289,190 | 2,615,855 | |
| Securitized loans | 74,635 | ||
| Financial assets at fair value through profit or loss | 7,523 | 10,035 | |
| Available-for-sale securities | 140,852 | 170,030 | |
| Held to maturity securities | 46,025 | ||
| Derivative financial instruments | 636,022 | 313,538 | |
| Other | 10,820 | 10,633 | |
| Total | 4,406,935 | 3,406,725 | |
| Interest expense and similar charges | |||
| Due to banks | (255,019) | (151,580) | |
| Due to customers | (942,971) | (563,045) | |
| Debt securities in issue and other borrowed funds | (683,206) | (684,800) | |
| Derivative financial instruments | (622,881) | (310,625) | |
| Other | (104,256) | (91,422) | |
| Total | (2,608,333) | (1,801,472) | |
| Net interest income | 1,798,602 | 1,605,253 |
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Loans | 71,650 | 70,140 | |
| Letters of guarantee | 40,398 | 36,821 | |
| Imports – Exports | 15,588 | 17,071 | |
| Credit Cards | 83,466 | 54,537 | |
| Fund transfers | 88,389 | 89,214 | |
| Mutual funds | 51,757 | 70,204 | |
| Advisory fees and securities transactions fees | 4,955 | 4,175 | |
| Other | 108,211 | 122,428 | |
| Total | 464,414 | 464,590 |
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Available-for-sale securities | 2,591 | 2,254 | |
| Total | 2,591 | 2,254 |
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Foreign exchange differences | 64,378 | 46,732 | |
| Financial assets at fair value through profit or loss: | |||
| - Bonds | (10,967) | (1,676) | |
| - Shares | (1,586) | 4,414 | |
| Available-for-sale securities: | |||
| - Bonds | 48,167 | (38,245) | |
| - Shares | (31,154) | 2,044 | |
| - Other securities | (58) | 13,129 | |
| Sale of participations | 1,903 | ||
| Derivative financial instruments | (79,757) | 54,490 | |
| Other financial instruments | 2,226 | 1,654 | |
| Total | (6,848) | 82,542 |
| From 1 January to | ||
|---|---|---|
| 31.12.2008 | 31.12.2007 | |
| Insurance activities | 6,026 | 2,669 |
| Hotel activities | 41,758 | 47,607 |
| Operating lease income | 6,133 | 5,773 |
| Sale of property, plant and equipment | 7,485 | 8,019 |
| Other | 18,542 | 17,364 |
| Total | 79,944 | 81,432 |
Income from insurance activities is analyzed as follows:
| From 1 January to | ||||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | |||
| Non-life Insurance | ||||
| Premiums and other related income | 12,726 | 12,911 | ||
| Less: | ||||
| - Reinsurance premiums ceded | (3,986) (3,385) |
|||
| - Commissions | (1,107) (873) |
|||
| - Claims from policyholders | (6,244) (6,395) |
|||
| Reinsurers' participation | 562 109 |
|||
| Net income from non-life insurance | 1,951 2,367 |
|||
| Life insurance | ||||
| Premiums and other related income | 10,039 | 9,365 | ||
| Less: | ||||
| - Reinsurance premiums ceded | (784) (906) |
|||
| - Commissions | (1,254) (1,147) |
|||
| - Claims from policyholders | (4,716) (7,325) |
|||
| Reinsurers' participation | 790 315 |
|||
| Net income from life insurance | 4,075 302 |
|||
| Total | 6,026 | 2,669 |
| From 1 January to | ||
|---|---|---|
| 31.12.2008 | 31.12.2007 | |
| Wages and salaries | 432,975 | 387,535 |
| Social Security contributions | 90,455 | 81,380 |
| Ε.Τ.Α.Τ. | 20,417 | |
| Employee defined benefit obligation (note 30) | 6,163 16,539 |
|
| Other | 39,478 | 41,481 |
| Total | 589,488 | 526,935 |
The total employees of the Group as at 31.12.2008 were 15,619 (31.12.2007: 12,907) of which 8,421 (31.12.2007: 7,846) are employed in Greece and 7,198 (31.12.2007: 5,061) are employed abroad.
All the employees of the Group in Greece receive their main pension from the Social Insurance Fund (IKA). Specifically for the Bank's employees the following apply:
a) The supplementary pension plan for employees of the former Ionian and Popular Bank of Greece is TAPILTAT, a multi-employer plan. The Bank has obtained legal opinions that indicate that it has no obligation if the fund does not have sufficient assets to pay employee benefits. Therefore the Bank considers that the fund is a defined contribution plan and it is accounted for as such. The Bank has applied for membership in ETAT (Common Insurance Fund of Bank Employees) for it's employees who are insured in TAPILTAT (Pension Plan for employees of Ionian – Popular Bank and other Banks).
b) All employees of the Bank receive medical benefits from the Bank Employee and Companies Common Benefit Plan (TAYTEKO). This plan has been accounted for as a defined contribution plan.
An analysis of liabilities arising from defined benefit plans are set out in note 30.
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Rent of buildings | 51,872 | 36,416 | |
| Rent and maintenance of EDP equipment | 25,534 | 22,124 | |
| EDP expenses | 45,536 | 39,314 | |
| Marketing and advertisement expenses | 51,652 | 43,736 | |
| Telecommunications and postage | 39,400 | 30,822 | |
| Third party fees | 57,368 | 42,243 | |
| Consultants fees | 9,983 | 8,981 | |
| Contribution to Deposit Guarantee Fund | 16,785 | 12,697 | |
| Insurance | 14,823 | 11,219 | |
| Consumables | 11,334 | 9,834 | |
| Electricity | 11,130 | 8,837 | |
| Agency fees | 7,443 | 4,713 | |
| Taxes (VAT, real estate etc) | 53,468 | 41,968 | |
| Other | 99,295 | 103,349 | |
| Total | 495,623 | 416,253 |
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Impairment losses on loans and advances to customers | 601,285 | 206,232 | |
| Impairment loss of participation | 5,100 | ||
| Reversal of impairment losses from due from banks | (24) (14) |
||
| Provisions to cover credit risk relating to off balance sheet items | (42,178) | 30,983 | |
| Recoveries | (22,432) | (10,518) | |
| Total | 541,751 | 226,683 |
The severe aggravation of credit turmoil during the third quarter of 2008 and its gradual transfer to real economy represents a significant indication of loan impairment.
Despite the fact that there are not as yet any signs that the credit turmoil has affected the repayment of loans, the Group reassessed the potential impairment loss, which as a percentage of loans amounts for 2008 to 1.13% compared to 0.60% as of 2007.
In accordance with Greek tax law the profits of entities in Greece are taxed at a rate of 25% for fiscal year 2007 and thereafter. According to Law 3697/08 the tax rate is reduced by one percent each year starting from 2010 until the rate reaches 20% in 2014 and thereafter.
In accordance with article 26 of Law 3634/2008 income tax is imposed for the fiscal year 2007, at the current tax rate (25%), on profits which previously were not subject to tax until distributed or capitalized (interest on Greek government bonds, gains from the sale of listed shares etc.). Only dividend income is not subject to tax since it has been already taxed at the corporate level for the fiscal years 2007 and 2008.
It should be noted, that in accordance with Law 3697/08, dividends approved by the general shareholders meetings after 1.1.2009 are subject to a withholding tax of 10% with no further tax obligation for the beneficiary.
The tax rates of years 2007 and 2008 of the subsidiaries and the Bank's branches operating aborad, are as follows:
| Fiscal year 2007 | Fiscal year 2008 | |
|---|---|---|
| % | % | |
| Cyprus | 10 | 10 |
| Bulgaria | 10 | 10 |
| Serbia | 10 | 10 |
| Romania | 16 | 16 |
| Jersey | 20 | 20 |
| Ukraine | 25 | 25 |
| Luxembroug | 29.63 | 29.63 |
| FYROM | 12 | 10 |
| Albania | 20 | 10 |
| United Kingdom | 30 | 28 |
The income tax expense is analysed as follows:
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Current tax | 126,940 | 156,097 | |
| Deferred tax | (14,754) | 58,468 | |
| Total | 112,186 | 214,565 |
Under the provisions of Law 3697/2008 concerning the gradual reduction of tax rates between the years 2010 to 2014, the Bank and the subsidiaries in Greece performed a recalculation of deferred taxes under the new tax rates. The effect was recorded in the financial statements.
Deferred tax recognized in the income statement is attributable to the following temporary differences:
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Depreciation and fixed asset write-offs | 3,185 | 7,882 | |
| Fixed assets revaluation | (8,236) | ||
| Valuation of loans | 91,511 | (6,844) | |
| Suspension of interest accruals | 40,108 | 29,108 | |
| Loans impairment | (49,360) | 27,301 | |
| Employee defined benefit obligations | 17,508 | 15,454 | |
| Liabilities to E.T.A.T. (Common Insurance Fund of Bank Employees) | 11,716 | ||
| Valuation of derivatives | (84,493) | (3,595) | |
| Effective interest rate | 15,586 | 5,364 | |
| Valuation of liabilities to credit institutions and other borrowed funds due to fair | |||
| value hedge | (10,119) | 9,886 | |
| Valuation of bonds | 10,067 | 1,838 | |
| Valuation of other securities | (7,951) | ||
| Carry forward of unused tax losses | (434) | 516 | |
| Other temporary differences | (43,842) | (28,442) | |
| Total | (14,754) | 58,468 |
The temporary differences attributable to the valuation of bonds and other securities are due to the tax imposed according to Law 3634/2008.
Reconciliation of effective and nominal tax rate:
| From 1 January to | ||||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | |||
| % | % | |||
| Profit before income tax | 625,633 | 985,263 | ||
| Income tax (nominal tax rate) | 22.01 | 137,727 | 22.06 | 217,315 |
| Increase/(decrease) due to: | ||||
| Additional tax on income of fixed assets | 0.09 | 538 | (0.06) | (552) |
| Non taxable income | (4.58) | (28,625) | (2.32) | (22,856) |
| Non deductible expenses | 1.71 | 10,708 | 1.00 | 9,804 |
| Part of profit relating to non taxable income | 0.07 | 670 | ||
| Part of profit relating to distributable income | 5 | (0.03) | (295) | |
| Effect of tax rates used for current and deferred tax | (0.36) | (2,236) | ||
| Other temporary differences | (0.93) | (5,832) | 1.07 | 10,520 |
| Usage of tax losses | (0.02) | (99) | (0.01) | (41) |
| Income tax (effective tax rate) | 17.93 | 112,186 | 21.78 | 214,565 |
The applicable income tax rate of 22.01% for 2008 and 22.06% for 2007 is the weighted average nominal tax rate based on the nominal income tax rate and the profit before tax of the Group's subsidiaries.
On 23 March 2007, the sale of 99.57% shares of the subsidiary Alpha Insurance A.E. to AXA, an insurance company which is the worldwide leader in financial protection was completed.
Alpha Bank and AXA have also signed a long term exclusive bankassurance agreement for the distribution of AXA products through the extensive branch network of the Bank.
The results of Alpha Insurance A.E. which has been classified as a discontinued operation for the period 1.1.2007 up to 23.3.2007 and the profit from the sale are included in caption "profit after income tax from discontinued operations" and are analyzed as follows:
| From 1 January to 31.12.2007 |
|
|---|---|
| Income | |
| Net interest income | 860 |
| Net fee and commission income | 409 |
| Other income (premiums etc.) | 3,573 |
| Total income | 4,842 |
| Expense | |
| Staff costs | (2,338) |
| General administrative expenses | (1,583) |
| Depreciation and amortization expenses | (239) |
| Total expense | (4,160) |
| Profit/(losses) before income tax | 682 |
| Income tax | (421) |
| Profit/(losses) after income tax | 261 |
| Profit from the disposal of Alpha Insurance A.E. | 80,127 |
| Profit after income tax from discontinued operations | 80,388 |
Basic earnings per share is calculated by dividing the profit after tax for the period attributable to the equity holders of the Bank by the weighted average number of ordinary shares outstanding, after deducting the weighted average number of treasury shares held by the companies of the Group, during the period.
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Profit attributable to equity holders of the Bank from continuing and | |||
| discontinued operations | 512,067 | 850,035 | |
| Weighted average number of outstanding ordinary shares | 405,624,439 | 405,502,633 | |
| Basic earnings per share from continuing and discontinued operations (in €) | 1.26 | 2.10 |
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Profit attributable to equity holders of the Bank from continuing | |||
| operations | 512,067 | 769,647 | |
| Weighted average number of outstanding ordinary shares | 405,624,439 | 405,502,633 | |
| Basic earnings per share from continuing operations (in €) | 1.26 | 1.90 |
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.
The Bank has a single category of dilutive potential ordinary shares resulting from a share options program granted to executives and managers of the Group exercised during 2007.
For the share options, a calculation is performed to determine the number of shares that could have been acquired at fair value (determined as the average market share price of the Bank's shares for the period) based on the monetary value of the subscription rights attached to outstanding share options. Upon the issuance of new ordinary shares resulting from share options exercise, the shares are included in the calculation of basic and dilutive earnings per share.
The weighted average number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.
| From 1 January to | ||
|---|---|---|
| 31.12.2008 | 31.12.2007 | |
| Profit attributable to equity holders of the Bank from continuing and | ||
| discontinued operations | 512,067 | 850,035 |
| Weighted average number of outstanding ordinary shares | 405,624,439 | 405,502,633 |
| Adjustment for share options | 727,195 | |
| Weighted average number of outstanding ordinary shares for diluted earnings per | ||
| share | 405,624,439 | 406,229,828 |
| Diluted earnings per share from continuing and discontinued operations (in €) | 1.26 | 2.09 |
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Profit attributable to equity holders of the Bank from continuing | |||
| operations | 512,067 | 769,647 | |
| Weighted average number of outstanding ordinary shares | 405,624,439 | 405,502,633 | |
| Adjustment for share options | 727,195 | ||
| Weighted average number of outstanding ordinary shares for diluted earnings per | |||
| share | 405,624,439 | 406,229,828 | |
| Diluted earnings per share from continuing operations (in €) | 1.26 | 1.89 |
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Cash | 491,410 | 411,539 |
| Cheques receivable | 99,212 | 69,052 |
| Balances with Central Banks | 2,860,325 | 2,783,021 |
| Total | 3,450,947 | 3,263,612 |
| Less: Deposits pledged to Central Banks | (2,252,477) | (1,826,958) |
| Total | 1,198,470 | 1,436,654 |
The Bank is required to maintain a current account with the Bank of Greece (Central Bank) in order to facilitate interbank transactions with the Central Bank and other financial institutions through the Trans European – Automated Real Time Gross Settlement Express Transfer System (TARGET).
The Bank of Greece also requires, that all financial institutions established in Greece maintain reserve deposits with the Central Bank equal to 2% of customer deposits.
These deposits bear interest at the refinancing rate as set by the European Central Bank which as at 31.12.2008 was 2.50% (31.12.2007: 4.18%).
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Cash and balances with Central Banks | 1,198,470 | 1,436,654 |
| Sale and repurchase agreements (Reverse Repos) | 523,863 | 47,874 |
| Short-term placements with other banks | 1,291,303 | 2,307,503 |
| Total | 3,013,636 | 3,792,031 |
| 14. Due from banks | ||
|---|---|---|
| -- | -------------------- | -- |
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Placements with other banks | 1,878,105 | 2,790,362 |
| Sale and repurchase agreements (Reverse Repos) | 523,863 | 47,874 |
| Loans to credit institutions | 435,869 | 678,157 |
| Less: | ||
| Allowance for impairment losses | (7,867) | (6,697) |
| Total | 2,829,970 | 3,509,696 |
| Allowance for impairment losses | |
|---|---|
| Balance 1.1.2007 | 7,683 |
| Changes for the period 1.1 - 31.12.2007 | |
| Decrease of impairment losses from due from banks (note 9) | (14) |
| Foreign exchange differences | (972) |
| Balance 31.12.2007 | 6,697 |
| Changes for the period 1.1 - 31.12.2008 | |
| Decrease of impairment losses from due from banks (note 9) | (24) |
| Foreign exchange differences | 1,194 |
| Balance 31.12.2008 | 7,867 |
| 31.12.2007 |
|---|
| 241,724 |
| 21,459 |
| 270 |
| 2,594 |
| 266,047 |
31 December 2008
| Contract nominal | Fair value | ||
|---|---|---|---|
| amount | Assets | Liabilities | |
| Derivatives held for trading | |||
| a. Foreign exchange derivatives | |||
| Currency forwards | 2,417,331 | 101,825 | 97,943 |
| Currency swaps | 3,444,037 | 49,595 | 95,481 |
| Cross currency swaps | 380,931 | 54,369 | 7,850 |
| Currency options | 151,341 | 2,246 | 2,207 |
| Currency options embedded in customer products | 4,083 | 59 | |
| Total non-listed | 6,397,723 | 208,094 | 203,481 |
| b. Interest rate derivatives | |||
| Interest rate swaps | 14,983,030 | 208,482 | 263,290 |
| Interest rate options (caps) | 810,214 | 4,057 | 3,268 |
| Total non-listed | 15,793,244 | 212,539 | 266,558 |
| Options | 20,000 | 30 | |
| Total listed | 20,000 | 30 | |
| c. Commodity derivatives | |||
| Commodity swaps | 5,078 | 2,942 | 2,933 |
| Total non-listed | 5,078 | 2,942 | 2,933 |
| d. Index derivatives | |||
| Otc options | 10,000 | 423 | |
| Total non-listed | 10,000 | 423 | |
| Futures | 1,536 | 59 | 19 |
| Options | 6,284 | 34 | |
| Total listed | 7,820 | 93 | 19 |
| e. Credit derivatives | |||
| Credit default swaps embedded in debt securities | 304,445 | 45,521 | |
| Total non-listed | 304,445 | 45,521 | |
| Derivatives for hedging | |||
| a. Foreign exchange derivatives | |||
| Currency swaps | 89,522 | 5,882 | 1,696 |
| Cross currency swaps | 237,831 | 21,865 | |
| Total non-listed | 327,353 | 27,747 | 1,696 |
| b. Interest rate derivatives | |||
| Interest rate swaps | 3,124,810 | 24,616 | 285,138 |
| Total non-listed | 3,124,810 | 24,616 | 285,138 |
| c. Index derivatives | |||
| Index swap | 30,998 | 8,542 | |
| Total non-listed | 30,998 | 8,542 | |
| Grand total | 26,021,471 | 485,026 | 805,346 |
| Contract nominal | Fair value | ||
|---|---|---|---|
| amount | Assets | Liabilities | |
| Derivatives held for trading | |||
| a. Foreign exchange derivatives | |||
| Currency forwards | 1,150,445 | 12,746 | 9,480 |
| Currency swaps | 2,888,361 | 35,013 | 44,797 |
| Cross currency swaps | 555,968 | 63,655 | 40,104 |
| Currency options | 175,822 | 3,438 | 3,261 |
| Currency options embedded in customer products | 631 | 1 | |
| Total non-listed | 4,771,227 | 114,853 | 97,642 |
| b. Interest rate derivatives | |||
| Interest rate swaps | 8,199,341 | 161,842 | 136,593 |
| Interest rate options (caps) | 616,963 | 2,233 | 1,388 |
| Total non-listed | 8,816,304 | 164,075 | 137,981 |
| Futures | 354,305 | 99 | 28 |
| Options | 6,300 | 32 | |
| Total listed | 360,605 | 131 | 28 |
| c. Commodity derivatives | |||
| Commodity swaps | 14,410 | 138 | 124 |
| Total non-listed | 14,410 | 138 | 124 |
| d. Index derivatives | |||
| Futures | 202 | 1 | |
| Options | 383 | 4 | |
| Total listed | 585 | 4 | 1 |
| Derivatives for hedging | |||
| a. Foreign exchange derivatives | |||
| Currency swaps | 137,380 | 12,114 | |
| Cross currency swaps | 181,895 | 46,258 | |
| Total non-listed | 319,275 | 12,114 | 46,258 |
| b. Interest rate derivatives | |||
| Interest reate swaps | 4,083,070 | 92,117 | 102,105 |
| Total non-listed | 4,083,070 | 92,117 | 102,105 |
| Grand total | 18,365,476 | 383,432 | 384,139 |
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Individuals | ||
| Mortgages: | ||
| - Non-Securitized | 10,822,806 | 11,186,669 |
| - Securitized | 2,715,262 | |
| Consumer: | ||
| - Non-Securitized | 3,183,581 | 3,606,631 |
| - Securitized | 1,485,843 | |
| Credit cards | 1,285,118 | 1,092,863 |
| Other | 119,399 | 146,762 |
| Total | 19,612,009 | 16,032,925 |
| Companies: | ||
| Corporate loans (1) | 29,779,390 | 24,771,065 |
| Leasing | 1,448,224 | 1,338,340 |
| Factoring | 599,888 | 532,640 |
| Total | 31,827,502 | 26,642,045 |
| Receivables from insurance and re-insurance activities | 9,950 | 9,494 |
| Other receivables | 531,235 | 228,201 |
| 51,980,696 | 42,912,665 | |
| Less: Allowance for impairment losses (2) |
(1,275,994) | (840,594) |
| Total | 50,704,702 | 42,072,071 |
| Allowance for impairment losses | ||
| Balance 1.1.2007 | 977,249 | |
| Changes for the period from 1.1 - 31.12.2007 | ||
| Impairment of assets classified as held for sale | (57) | |
| Change in present value of impairment reserve | 41,288 | |
| Foreign exchange differences | (2,016) | |
| Impairment losses for the period (note 9) | 206,232 | |
| Loans written-off during the period | (382,102) | |
| Balance 31.12.2007 | 840,594 | |
| Changes for the period from 1.1 - 31.12.2008 | ||
| Change in present value of impairment reserve | 64,453 | |
| Foreign exchange differences | (8,106) | |
| Impairment losses for the period (note 9) | 601,285 | |
| Loans written-off during the period | (222,232) | |
| Balance 31.12.2008 | 1,275,994 |
The Bank securitized mortgage and consumer loans through special purpose entities. The Group retains all risks of these loans as it has issued a guarantee to the holders of the bonds issued in the securitization.
(1) In accordance with amendments to IAS 39, the Group reclassified securities of €21.8 million from the available-for-sale portfolio to the loans portfolio. These securities are not traded in an active market and the Group has the intention to hold them in the foreseeable future. The above securities which are included in corporate loans have been impaired of amount of € 17.4 million.
(2) In addition to the allowance for impairment losses, an additional provision of € 3,627 (31.12.2007: €45,929) has been recorded to cover credit risk relating to off-balance sheet items (note 32). The total provision recorded to cover credit risk amounts to €1,279,621 (31.12.2007: €886,523).
The financial lease receivables are analyzed as follows:
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Up to 1 year | 456,651 | 398,360 |
| From 1 year up to 5 years | 716,826 | 675,630 |
| More than 5 years | 785,959 | 829,707 |
| 1,959,436 | 1,903,697 | |
| Unearned finance income | (511,212) | (565,357) |
| Total | 1,448,224 | 1,338,340 |
The net amount of finance leases is analyzed by duration as follows:
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Up to 1 year | 374,042 | 316,096 |
| From 1 year up to 5 years | 502,288 | 456,249 |
| More than 5 years | 571,894 | 565,995 |
| Total | 1,448,224 | 1,338,340 |
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Government bonds | 366,804 | 1,909,248 |
| Other debt securities: | ||
| - Listed | 89,994 | 1,065,924 |
| - Non-listed | 169,328 | 36,983 |
| Shares: | ||
| - Listed | 40,465 | 69,446 |
| - Non-listed | 36,597 | 21,661 |
| Other variable yield securities | 49,338 | 53,639 |
| Total | 752,526 | 3,156,901 |
| 31.12.2008 | |||
|---|---|---|---|
| Cost | Fair value | ||
| Government bonds | 1,805,579 | 1,697,446 | |
| Other debt securities: | |||
| - Listed | 2,558,601 | 2,144,857 | |
| - Non listed | 124,529 | 121,637 | |
| Total | 4,488,709 | 3,963,940 |
The held-to-maturity portfolio includes bonds from the Bank amounting to €1.1 billion, which up to 30.6.2008 were classified as "Available-for-sale".
The reclassification of these bonds was performed at their fair value as at 30.6.2008, which became their new amortized cost on the basis of which the effective interest rate method was used to allocate the interest income thereafter. At that date the fair value of these bonds was €63.3 million less than their carrying amount. This difference, already recognized in equity, will be amortized to interest income over the remaining period to maturity of the bonds.
Had the above mentioned bonds not been reclassified from the available-for-sale portfolio, their fair value would have been lower than the carrying amount by an additional amount of €217 million.
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Opening balance | 5,320 | 4,091 | |
| Purchases/ Recognition of participation | 46,954 | 20 | |
| Dividends received | (11) (11) |
||
| Share of profit/ (loss) | 6,997 | 1,220 | |
| Closing balance | 59,260 | 5,320 |
The increase of the account "Investments in associates" compared to 31.12.2007, is attributed to the recognition of EL.P.ET. Balcan S.A. which is valued under the equity method.
The Group's investments in associates are analyzed as follows:
| Country of | Group's ownership interest % | |||
|---|---|---|---|---|
| Name | incorporation | 31.12.2008 | 31.12.2007 | |
| a. Evisak A.E. | Greece | 27.00 | 27.00 | |
| b. AEDEP Thessalias & Stereas Ellados (1) | Greece | 50.00 | 50.00 | |
| c. A.L.C. Novelle Investments Ltd | Cyprus | 33.33 | 33.33 | |
| d. ΕL.P.ΕΤ. Balcan Α.Ε. | Greece | 26.71 |
The Group's share in profit and loss of each associate is set out below:
| Name | Equity (in thousands of €) |
Profit/ (loss) after tax |
Total (in thousands of €) |
Share of profit/(loss) 31.12.2008 |
|---|---|---|---|---|
| a. Evisak A.E. | 3,166 | 179 | 3,345 | 11 |
| b. AEDEP Thessalias & Stereas Ellados (1) | 147 | 147 | ||
| c. A.L.C. Novelle Investments Ltd | 11,690 | 1,873 | 13,563 | (739) |
| d. ΕL.P.ΕΤ. Balcan Α.Ε. | 204,594 | 204,594 | 7,725 | |
| Total | 219,597 | 2,052 | 221,649 | 6,997 |
(1) It is a non profit company
| Balance 1.1.2007 | |
|---|---|
| Cost | 34,948 |
| Accumulated depreciation | (3,430) |
| Net book value 1.1.2007 | 31,518 |
| 1.1.2007 – 31.12.2007 | |
| Net book value 1.1.2007 | 31,518 |
| Foreign exchange differences | (35) |
| Additions | 26,602 |
| Disposals | (480) |
| Reclassification from "Property, plant and equipment" | 16,628 |
| Depreciation charge for the period | (673) |
| Net book value 31.12.2007 | 73,560 |
| Balance 31.12.2007 | |
| Cost | 78,526 |
| Accumulated depreciation | (4,966) |
| 1.1.2008 - 31.12.2008 | |
| Net book value 1.1.2008 | 73,560 |
| Foreign exchange differences | (90) |
| Additions | 466 |
| Reclassification from "Property, plant and equipment" | (6,450) |
| Depreciation charge for the period | (611) |
| Net book value 31.12.2008 | 66,875 |
| Balance 31.12.2008 | |
| Cost | 72,244 |
| Accumulated depreciation | (5,369) |
Transfers from «Property, plant and equipment» in 2007 relate to a building owned by the subsidiary Oceanos A.T.O.E.E. amounting to € 15.8 million, leased by a subsidiary Alpha Insurance A.E. until 23.3.2007. The fair value of the above property as at 31.12.2007 was € 22 million.
The fair value of investment property as at 31.12.2008 as determined by Alpha Astika Akinita A.E. amounted to € 70,080.
| Land and | Leased | |||
|---|---|---|---|---|
| buildings | equipment | Equipment | Total | |
| Balance 1.1.2007 | ||||
| Cost | 1,058,044 | 4,055 | 361,639 | 1,423,738 |
| Accumulated depreciation | (209,573) | (1,963) | (276,206) | (487,742) |
| Net book value 1.1.2007 | 848,471 | 2,092 | 85,433 | 935,996 |
| 1.1.2007 – 31.12.2007 | ||||
| Net book value 1.1.2007 | 848,471 | 2,092 | 85,433 | 935,996 |
| Foreign exchange differences | (1,669) | (73) | (536) | (2,278) |
| Additions | 64,714 | 1,747 | 37,848 | 104,309 |
| Disposals | (5,435) | (1,349) | (6,784) | |
| Additions from companies consolidated for first time in 2007 | 145,909 | 23,346 | 169,255 | |
| Reclassification to "Investment property" | (16,628) | (16,628) | ||
| Reclassification from "Non-current assets held-for-sale" (1) | 42,405 | 42,405 | ||
| Other reclassifications | (268) | (268) | ||
| Depreciation charge for the period (2) | (24,405) | (694) | (27,633) | (52,732) |
| Net book value 31.12.2007 | 1,053,362 | 3,072 | 116,841 | 1,173,275 |
| Balance 31.12.2007 | ||||
| Cost | 1,283,906 | 5,414 | 414,199 | 1,703,519 |
| Accumulated depreciation | (230,544) | (2,342) | (297,358) | (530,244) |
| 1.1.2008 - 31.12.2008 | ||||
| Net book value 1.1.2008 | 1,053,362 | 3,072 | 116,841 | 1,173,275 |
| Foreign exchange differences | (10,174) | (400) | (3,294) | (13,868) |
| Additions | 93,192 | 54,108 | 147,300 | |
| Disposals | (842) | (930) | (1,145) | (2,917) |
| Additions from companies consolidated for first time in 2008 | 1,465 | 1,115 | 2,580 | |
| Reclassification to "Investment property" (3) | 6,450 | 6,450 | ||
| Other reclassifications | 4,038 | 345 | (4,383) | |
| Depreciation charge for the period | (26,840) | (280) | (31,460) | (58,580) |
| Net book value 31.12.2008 | 1,120,651 | 1,807 | 131,782 | 1,254,240 |
| Balance 31.12.2008 | ||||
| Cost | 1,373,990 | 2,814 | 454,795 | 1,831,599 |
| Accumulated depreciation | (253,339) | (1,007) | (323,013) | (577,359) |
As at 31 December 2008 "Land and Buildings" include owned fixed assets of € 1,048,391. The fair value of these assets as determined by Alpha Astika Akinita A.E. the same date was €1,151,849.
Srbija A.D.
_________________
(1) During 2007 property, plant and equipment amounting to € 42.4 million was reclassified from «Non-current assets held for sale» due to Bank's decision for own use. The depreciation for the respective period that the specific Property, plant and equipment was classified as "Non-current assets held for sale" amounts to € 2.2 million and it was charged to the profit and loss account in 2007.
(2) The depreciation charge for the period 1.7 – 31.12.2007 does not include an amount of € 1.1 million that concerns Hilton Rhodes Resort
which was classified as "Non current assets held for sale" (note 25).
(3) The reclassifications from "Investment property" relate to a building owned by Alpha Real Estate D.O.O. Beograd leased by Alpha Bank
| Other | ||||
|---|---|---|---|---|
| Goodwill | intangible | Software | Total | |
| Balance την 1.1.2007 | ||||
| Cost | 58,344 | 18,293 | 144,745 | 221,382 |
| Accumulated amortization | - (5,884) |
(98,360) | (104,244) | |
| Net book value 1.1.2007 | 58,344 | 12,409 | 46,385 | 117,138 |
| 1.1.2007 - 31.12.2007 | ||||
| Net book value 1.1.2007 | 58,344 | 12,409 | 46,385 | 117,138 |
| Foreign exchange differences | (336) | 145 | (233) | (424) |
| Additions | 5,340 | 35,484 | 40,824 | |
| Disposals | (920) | (920) | ||
| Reclassification from "Property, plant and equipment" | 268 | 268 | ||
| Additions from companies consolidated for first time in 2007 | 1,333 | 1,333 | ||
| Amortization charge for the period | - (3,484) |
(20,238) | (23,722) | |
| Net book value 31.12.2007 | 58,008 | 15,743 | 60,746 | 134,497 |
| Balance 31.12.2007 | ||||
| Cost | 58,008 | 25,785 | 181,273 | 265,066 |
| Accumulated amortization | (10,042) | (120,527) | (130,569) | |
| 1.1.2008 - 31.12.2008 | ||||
| Net book value 1.1.2008 | 58,008 | 15,743 | 60,746 | 134,497 |
| Foreign exchange differences | (7,272) | (479) | (640) | (8,391) |
| Additions | 17,947 | 44,499 | 62,446 | |
| Disposals | (183) | (183) | ||
| Other reclassifications | (3,453) | 3,453 | ||
| Additions from companies consolidated for first time in 2008 | ||||
| (1) | 1,551 | 1 | 49 | 1,601 |
| Impairment losses for the period (2) | (251) | (251) | ||
| Amortization charge for the period | - (4,669) |
(25,089) | (29,758) | |
| Net book value 31.12.2008 | 52,036 | 25,090 | 82,835 | 159,961 |
| Balance 31.12.2008 | ||||
| Cost | 52,036 | 37,983 | 227,612 | 317,631 |
| Accumulated amortization | (12,893) | (144,777) | (157,670) |
The annual impairment test performed on the goodwill arising from the acquisition of Alpha Bank Srbija A.D. confirmed that no adjustment to the carrying amount is necessary. Specifically, the value in use and the fair value less costs to sell were determined to be higher than the carrying amount of the subsidiary presented in the consolidated financial statements and therefore no impairment loss exists.
Other intangible assets which were recognized upon acquisition of the above mentioned bank that relate to the deposit base, and customer relationships, their recoverable amount was also estimated to be higher than their carrying amount and no impairment loss was required. The only exception was the brand name and the software which have been fully amortized and no longer used.
(1) The goodwill of 2008 relates to the acquisition of 90% ownership interest of Astra Bank OJSC (note 45d).
(2) The impairment losses of the period concern goodwill of the subsidiary Evremathea A.E..
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Deferred tax assets | 333,499 | 170,257 |
| Deferred tax liabilities | (197,779) | (94,807) |
| Total | 135,720 | 75,450 |
| Deferred tax assets and liabilities arise from: |
| 1.1.2008 - 31.12.2008 Recognized in |
||||
|---|---|---|---|---|
| Balance 1.1.2008 |
Income statement | Equity | Balance 31.12.2008 |
|
| Depreciation | 4,104 | (3,185) | (175) | 744 |
| Revaluation of fixed assets | 8,236 | 8,236 | ||
| Valuation of loans | 19,803 | (91,511) | (71,708) | |
| Suspension of interest accruals | (53,320) | (40,108) | (93,428) | |
| Impairment of loans | (21,978) | 49,360 | 27,382 | |
| Valuation of derivative financial instruments | 3 | 84,493 | 84,496 | |
| Tax losses carry forward | 4,329 | 434 | 954 | 5,717 |
| Other provisions | 28,037 | 43,842 | 1,036 | 72,915 |
| Effective interest rate | 2,212 | (15,586) | (13,374) | |
| Employee defined benefit obligations | 111,770 | (17,508) | 94,262 | |
| Common Insurance Fund of Bank employees | ||||
| obligation | (11,716) | (11,716) | ||
| Valuation of liabilities to credit institutions and | ||||
| other borrowed funds due to fair value hedge | (17,672) | 10,119 | (7,553) | |
| Valuation of investments due to hedge | 7,951 | 5,252 | 13,203 | |
| Valuation of bonds | (1,838) | (10,067) | 38,449 | 26,544 |
| Total | 75,450 | 14,754 | 45,516 | 135,720 |
| 1.1.2007 - 31.12.2007 | ||||
|---|---|---|---|---|
| Recognized in | ||||
| Balance | Balance | |||
| 1.1.2007 | Income statement Equity | 31.12.2007 | ||
| Depreciation | 15,009 | (7,882) | (3,023) | 4,104 |
| Valuation of loans | 12,977 | 6,844 | (18) | 19,803 |
| Suspension of interest accruals | (24,212) | (29,108) | (53,320) | |
| Impairment of loans | 5,323 | (27,301) | (21,978) | |
| Valuation of derivative financial instruments | (3,592) | 3,595 | 3 | |
| Tax losses carry forward | 4,988 | (516) | (143) | 4,329 |
| Other provisions | (742) | 28,442 | 337 | 28,037 |
| Effective interest rate | 7,576 | (5,364) | 2,212 | |
| Employee defined benefit obligations | 127,224 | (15,454) | 111,770 | |
| Valuation of liabilities to credit institutions and | ||||
| other borrowed funds due to fair value hedges | (7,786) | (9,886) | (17,672) | |
| Valuation of bonds | (1,838) | (1,838) | ||
| Total | 136,765 | (58,468) | (2,847) | 75,450 |
| 24. Other assets | ||
|---|---|---|
| 31.12.2008 | 31.12.2007 | |
| Investments on behalf of life insurance policyholders | 21,486 | 18,109 |
| Prepaid expenses | 18,344 | 25,759 |
| Accrued income | 7,078 | 3,316 |
| Tax advances and withholding taxes | 186,578 | 166,723 |
| Receivables from employee defined benefit plan (note 30) | 47,311 | 49,189 |
| Additional contribution to TEK | 52,290 | |
| Other | 216,212 | 122,580 |
| Total | 549,299 | 385,676 |
In accordance with article 6 of Law 3714/7.11.2008 the amount of deposits guaranteed by the deposit guarantee fund, increased from € 20,000 to € 100,000. The contribution paid by banks to deposit guarantee fund also increased.
Thus, the Banks have made additional contributions for 2008. The Law 3746/16.2.2009 concerning the "Deposits Guarantee Fund and Investment (TEKE)" provides that the difference between the regular annual contribution of credit institutions resulting from the application of article 6 of Law 3714/2008 will be included in a special assets group whose elements are jointly included in the proportion of each participant in the credit institutions.
As at 31.12.2008 "Non-current assets held for sale" include land and buildings amounting to € 53,574 (31.12.2007: € 54,651) and office equipment amounting to € 231 (31.12.2007: € 570). The fair value of "Non-current assets held for sale" as determined by Alpha Astika Akinita AE amounted to € 64,815.
As at 28.3.2008 Ionian Hotel Enterprises A.E. transferred the shares of the subsidiary Tourist Resort A.E., which owns the Rhodes Hotel Resort (note 45b).
The assets and liabilities of Hilton Rhodes Resort as at 31 December 2007 have been classified as "Non-current assets held for sale" and "Liabilities related to non-current assets held for sale" respectively and were as follows:
| 31.12.2007 | |
|---|---|
| Non-current assets held for sale | |
| Cash and balances with Central Banks | 38 |
| Loans and advances to customers | 1,336 |
| Goodwill and other intangible assets | 9 |
| Property, plant and equipment | 29,745 |
| Deferred tax assets | 3,319 |
| Other assets | 277 |
| Total | 34,724 |
| Liabilities related to non-current assets held for sale | |
| Liabilities for current income tax and other taxes | 39 |
| Deferred tax liabilities | 308 |
| Other liabilities | 970 |
| Employee defined benefit obligations | 266 |
| Total | 1,583 |
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Deposits: | ||
| - Current accounts | 426,525 | 66,591 |
| - Term deposits | ||
| - European Central Bank term deposits | 5,187,133 | 96,314 |
| - Other credit institutions term deposits | 1,364,140 | 2,002,813 |
| Sale and repurchase agreements (Repos) | 934,078 | 1,923,548 |
| Borrowings | 1,051,920 | 348,470 |
| Total | 8,963,796 | 4,437,736 |
| 31.12.2008 | 31.12.2007 | ||
|---|---|---|---|
| Deposits: | |||
| - Current accounts | 6,340,839 | 6,857,487 | |
| - Savings accounts | 7,985,913 | 9,212,287 | |
| - Term deposits | 24,872,206 | 11,977,552 | |
| Debt securities in issue | 3,151,516 | 6,335,599 | |
| Sale and repurchase agreements (Repos) | 34,742 | 94,078 | |
| 42,385,216 | 34,477,003 | ||
| Cheques payable | 161,561 | 188,155 | |
| Total | 42,546,777 | 34,665,158 |
| Short term securities (ECP) (1) | |
|---|---|
| Balance 1.1.2008 | |
| Changes for the period 1.1 – 31.12.2008 | |
| New issues | 2,605,910 |
| (Purchases)/sales by Group companies | (115,000) |
| Maturities/Redemptions | (2,409,223) |
| Accrued interest | 20,851 |
| Foreign exchange differences | 27,492 |
| Balance 31.12.2008 | 130,030 |
| Senior debt securities | |
| Balance 1.1.2008 | 14,296,007 |
| Changes for the period 1.1 – 31.12.2008 | |
| New issues (2) | 4,972,407 |
| (Purchases)/sales by Group companies | (1,940,808) |
| Maturities/Redemptions | (8,083,035) |
| Fair value change due to hedging | 25,887 |
| Accrued interest | (10,347) |
| Foreign exchange differences | 27,470 |
| Balance 31.12.2008 | 9,287,581 |
| Subordinated debt | |
| Balance 1.1.2008 | 1,228,888 |
| Changes for the period 1.1 – 31.12.2008 | |
| New issues (3) | 100,000 |
| (Purchases)/sales by Group companies | (69,637) |
| Maturities/Redemptions (4) | (350,000) |
| Fair value change due to hedging | 11,931 |
| Accrued interest | (2,584) |
| Foreign exchange differences | 56,492 |
| Balance 31.12.2008 | 975,090 |
| Total | 10,392,701 |
Of the above debt securities in issue an amount of € 3,151,516 (31.12.2007: € 6,335,598) held by Bank customers has been reclassified to "Due from customers". Therefore the balance of "Debt securities in issue held by institutional investors and other borrowed funds" as at 31 December 2008 amounts to € 7,241,185 (31.12.2007: €9,189,297).
(1) The Bank raises short term liquidity, through a Euro Commercial paper program amounting to total € 5 billion. Under this program commercial paper may be issued at a discount or may bear floating, fixed or index linked interest with 1 to 364 days duration. The commercial paper can be issued in Euro, US Dollar, GB pound, Swiss Franc, Japanese Yen, Australian Dollar, Canadian Dollar and any other currency that will be agreed by the counterparties.
Issues in Euro pay an average spread of 9 to 35 basis points over Euribor of the respective period.
The issues in US Dollars were set on from 14 to 42 basis points over Libor of the respective period.
The issues in YEN were set on from 20 to 25 basis points over Libor of the respective period
(2) The new senior debt issues amounting to € 4,609 million pay a Euribor floating rate, with a spread from 12 up to 125 basis points, depending on the duration of issue.
Additionally, new senior debt issues amounting to € 555 million, an embedded put option for the investor exists which bears Euribor plus variable spread. If the investor does not exercise the option, the spread may increase to a maximum between 40 and 120 basis points.
(3) On 30.5.2008 the subsidiary Alpha Bank Cyprus Ltd, issued subordinate debt securites (lower Tier II) amounting to € 100 million with a 10 year duration paying three month Euribor plus 180 basis points for the first 5 years. If Alpha Bank Cyprus Ltd does not redeem the security, the spread for the following years increases to 280 basis points.
(4) On 19 February 2008, five years after issuance, the Bank redeemed a 10 year subordinated debt amounting to € 100 million. On 10 July 2008, five years after issuance, the Bank redeemed a 10 year subordinated debt amounting to € 100 million.
On 24 November 2008, five years after issuance, the Bank redeemed a 10 year subordinated debt amounting to € 150 million.
On 18 July 2008 the issuance of two covered bonds was performed by Alpha Covered Bonds Plc, a subsidiary of the Bank, in accordance with paragraph 91 of Law 3601/2007 and P.D./BOG 2598/2-11-2007. Each covered bond issue amounts to € 1 billion, and has a three and five year duration respectively. The bonds are guaranteed by the Bank and they are collaterised with mortgage loans. The bonds received a AAA rating from three international credit rating agencies (Standard & Poor's, Moody's, and Fitch). To date the bonds have been pledged as collateral for monetary policy purposes with the Bank of Greece. In the future these bonds may also be sold to investors.
The liability due to the securitization of the Bank's mortgage loans is not presented in "bond securities in issue and other borrowed funds" since these securities, issued by the Bank's subsidiary Alpha Covered Bond PLC, are held by the Bank.
On 9 December 2008, the issuance of the bond loans, through the Bank's Subsidiary Katanalotika Plc was completed. The bonds are collaterized with personal, consumer and car loans of the Bank. The bonds rated as Aa2 by the credit rating agency Moody's have been retained by the Bank and pledge as collateral for refinancing purposes with the Bank of Greece.
The € 1.45 billion liability due to the securitization of consumer loans is not presented in "debt securities in issue and other borrowed funds" since these securities, issued by the Bank's subsidiary, are held by the Bank.
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Current income tax | 86,849 | 127,360 |
| Other taxes | 41,213 | 31,437 |
| Total | 128,062 | 158,797 |
The total amounts recognized in the financial statements for employee defined benefit obligations are presented in the table below:
| Balance sheet 31.12.2008 Liability/ (Asset) |
Income statement 1.1.-31.12.2008 Expense/(Income) |
Balance sheet 31.12.2007 Liability/ (Asset) |
Income statement 1.1.-31.12.2007 Expense/(Income) |
|---|---|---|---|
| (1,199) | |||
| 3,008 | (49,189) | 4,203 | |
| 3,008 | (49,189) | 3,004 | |
| - | (3,733) | 3,733 | 8,194 |
| 37,673 | 6,438 | 33,320 | 5,650 |
| 5,089 | 450 | 4,966 | (309) |
| 16,539 | |||
| - - (47,311) (47,311) |
- 6,163 |
Balance sheet and income statement amounts are as follows:
After TAP was absorded by the Common Insurance Fund of Bank Employees for the supplementary pension (Article 10, Law 3620/2007), TAP obligation is restricted to paying a lump-sum benefit to retiring employees, which is guaranteed by the Bank. The amounts in balance sheet are analyzed as follows:
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Present value of defined benefit obligations | 128,895 | 127,035 |
| Fair value of plan assets | (156,268) | (162,031) |
| Deficit/(Surplus) | (27,373) | (34,996) |
| Unrecognized actuarial losses | (19,938) | (14,193) |
| Asset in balance sheet | (47,311) | (49,189) |
Amounts included in profit and loss are as follows:
| From 1 January to | ||
|---|---|---|
| 31.12.2008 | 31.12.2007 | |
| Current service cost | 4,751 5,484 |
|
| Interest cost | 6,391 5,342 |
|
| Expected return on plan assets | (8,134) (6,623) |
|
| Total (included in staff costs) | 3,008 4,203 |
The movement in present value of accrued liabilities is as follows:
| 2008 | 2007 | ||
|---|---|---|---|
| Opening balance | 127,035 | 121,463 | |
| Current service cost | 4,751 | 5,484 | |
| Interest cost | 6,391 | 5,342 | |
| Employee contributions | 1,396 | 1,032 | |
| Benefits paid | (6,912) | (8,466) | |
| Benefits paid directly by the Bank | (1,130) | (1,357) | |
| Expenses | (5) | (68) | |
| Actuarial losses/(Gain) | (2,631) | 3,605 | |
| Closing balance | 128,895 | 127,035 |
The movement in fair value of plan assets is as follows:
| 2008 | 2007 | ||
|---|---|---|---|
| Opening balance | 162,031 | 165,051 | |
| Expected return | 8,134 | 6,623 | |
| Bank contribution | - | - | |
| Employee contributions | 1,396 | 1,032 | |
| Benefits paid | (6,912) | (8,466) | |
| Expenses | (5) | (68) | |
| Actuarial losses | (8,376) | (2,141) | |
| Closing balance | 156,268 | 162,031 |
The Plan assets include deposits with Alpha Bank of € 36.7 million, receivables from Alpha Bank of € 31.1 million bonds issued, Alpha Credit Group plc of € 82.6 million and Alpha Bank shares of € 3.2 million.
| The movement of the receivable is as follows: | |
|---|---|
| Balance 1.1.2007 | (52,035) |
| Accrued expense | 4,203 |
| Contributions paid | - |
| Benefits paid directly by the Bank | (1,357) |
| Balance 31.12.2007 | (49,189) |
| Balance 1.1.2008 | (49,189) |
| Accrued expense | 3,008 |
| Contributions paid | - |
| Benefits paid directly by the Bank | (1,130) |
| Balance 31.12.2008 | (47,311) |
The principal actuarial assumptions used are the following:
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Discount rate | 5.8% | 5.5% |
| Expected return on plan assets | 5.0% | 5.0% |
| Future salary increases | 3.5% | 3.5% |
Ionian and Popular Bank Insurance Fund (TAPILT – Welfare Sector) is responsible for the payment of a lump sum to retired employees of the former Ionian Bank.
In accordance with article 10 of Law 3655/2008 passed on 31.3.2008 a public sector entity was established "Bank employee and Companies Common Benefit Plan (TAYTEKO)" to provide supplementary insurance, lump sum benefits and health insurance. This insurance fund includes the welfare sector of TAPILT among other funds. For this fund the Bank had applied defined benefit plan accounting as it considered that it had a constructive liability.
The liability was written off due to the adoption of the above law and the incorporation of TAPILT's welfare sector to TAYTEKO from 1.10.2008.
The amounts recognized in Balance Sheet are as follows:
| 31.12.2007 | |
|---|---|
| Present value of defined benefit obligations | 74,737 |
| Fair value of plan assets | (64,006) |
| Deficit/(Surplus) | 10,731 |
| Unrecognized actuarial losses | (6,998) |
| Liability (asset) in balance sheet | 3,733 |
| Amounts included in profit and loss are as follows: | |
| 31.12.2007 | |
| Current service cost | 255 |
| Interest cost | 2,744 |
| Expected return on plan assets | (2,508) |
| Actuarial losses recognized in this fiscal year | 28 |
| Past service cost | 7,675 |
| Total (included in staff costs) | 8,194 |
| The movement in present value of the liabilities in 2007 is as follows: | |
| 2007 | |
| Opening balance | 63,458 |
| Current service cost | 255 |
| Interest cost | 2,744 |
| Employees contribution | 3,061 |
| Benefits paid | (3,096) |
| Expenses | (85) |
| Past service cost | 7,675 |
| Actuarial losses | 725 |
| Closing balance | 74,737 |
The movement in fair value of plan assets during 2007 is as follows:
| 2007 | |
|---|---|
| Opening balance | 61,202 |
| Expected return | 2,508 |
| Employees contribution | 3,061 |
| Benefits paid | (3,096) |
| Expenses | (85) |
| Actuarial gain/(losses) | 416 |
| Closing balance | 64,006 |
| The movement of liability is as follows | |
| Balance 1.1.2007 | (4,461) |
| Accrued expense | 8,194 |
| Balance 31.12.2007 | 3,733 |
| Balance 1.1.2008 | 3,733 |
| Accrued expense | (66) |
| Income from the write-off liability | (3,667) |
| Balance 31.12.2008 | - |
| The principal actuarial assumptions used are the following: |
| 31.12.2007 | |
|---|---|
| Discount rate | 5.5% |
| Expected return on plan assets | 5.0% |
| Future salary increases | 3.5% |
Personnel receive a lump sum benefit on retirement which is calculated based on the years of service and salary.
Amounts included in balance sheet are as follows:
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Present value of defined benefit obligations | 44,860 | 42,378 |
| Unrecognized actuarial gains | (7,187) (9,058) |
|
| Recognized liability | 37,673 | 33,320 |
| Amounts included in profit and loss are as follows: | ||
| From 1 January to | ||
| 31.12.2008 | 31.12.2007 | |
| Current service cost | 4,042 3,452 |
|
| Interest cost | 2,186 1,870 |
|
| Net actuarial losses recognized in fiscal year | 210 125 |
|
| Past service cost | 203 | |
| Total (included in staff costs) | 6,438 5,650 |
The movement of the present value of accrued benefit arises as follows:
| 2008 | 2007 | ||
|---|---|---|---|
| Opening balance | 33,320 | 31,281 | |
| Current service cost | 4,042 | 3,452 | |
| Interest cost | 2,186 | 1,870 | |
| Actuarial losses recognized in fiscal year | 210 | 125 | |
| Past service cost recognized in fiscal year | - | 203 | |
| Foreign exchange differences | - | (389) | |
| Benefits paid | (2,085) | (3,222) | |
| Closing balance | 37,673 | 33,320 | |
| The principal actuarial assumptions used are the following: | |||
| 31.12.2008 | 31.12.2007 | ||
| Discount rate | 5.75% | 5.25% | |
| Future salary increases | 6.50% | 6.50% |
32. Provisions
_____________
The employees of the subsidiaries in Greece with indefinite employment contracts receive a lump sum payment on retirement, which is defined by Law 2112/1920. In the subsidiary Alpha Bank Srbija A.D., the employees receive a lump sum payment on retirement, which equals three salaries of Serbian State employees. The liability arises as follows:
| 31.12.2008 | 31.12.2007 | ||
|---|---|---|---|
| Liability in balance sheet | 5,089 | 4,966 | |
| From 1 Janaury to | |||
| 31.12.2008 | 31.12.2007 | ||
| Expense (included in staff costs) | 450 | (309) | |
| 31. Other liabilities | |||
| 31.12.2008 | 31.12.2007 | ||
| Dividends payable | 9,965 | 8,304 | |
| Liabilities to third parties | 233,364 | 241,970 | |
| Liabilities to E.T.A.T.(1) | 518,400 | 565,263 | |
| Brokerage services | 22,872 | 37,970 | |
| Deferred income | 59,090 | 59,659 | |
| Accrued expenses | 83,143 | 50,807 | |
| Liabilities from credit cards | 228,789 | 225,127 | |
| Reinsurance activities | 115 | 1,574 | |
| Financial lease | 72 | 407 | |
| Other | 194,477 | 132,473 | |
| Total | 1,350,287 | 1,323,554 |
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Insurance provisions | 39,770 | 41,561 |
| Provisions to cover credit risk | 3,627 | 45,929 |
| Other | 9,866 | 8,445 |
| Total | 53,263 | 95,935 |
(1) In accordance with article 10 of Law 3620/2007 and the mandatorily joint of TAP members to Common Insurance Fund of Bank Employees (E.T.A.T.) from 1.1.2008 (note 30), Bank's financial burden amounted to € 543 million which will be attributed in ten equal annual installments. In 31.12.2007 liability it is included the above amount and interest for 2007 while 31.12.2008 liability has been formed from the payment of the annual installments and interest for the current year.
| 31.12.2008 | 31.12.2007 | ||
|---|---|---|---|
| Non-life insurance | |||
| Unearned premiums | 5,163 | 4,643 | |
| Outstanding claim reserves | 4,109 | 5,780 | |
| Total | 9,272 | 10,423 | |
| Life insurance | |||
| Mathematical reserves | 7,635 | 6,992 | |
| Outstanding claim reserves | 1,377 | 1,325 | |
| Total | 9,012 | 8,317 | |
| Reserves for investments held on behalf and at risk of life insurance | |||
| policy holders | 21,486 | 22,821 | |
| Total | 39,770 | 41,561 | |
| b. Provisions to cover credit risk | |||
| Balance 1.1.2007 | 14,946 | ||
| Changes for the period 1.1. – 31.12.2007 | |||
| Provisions to cover credit risk relating to off-balance sheet items (note 9) | 30,983 | ||
| Balance 31.12.2007 | 45,929 | ||
| Changes for the period 1.1. – 31.12.2008 | |||
| Provisions to cover credit risk relating to off-balance sheet items (note 9) | (42,178) | ||
| Exchange differences | (124) | ||
| Balance 31.12.2008 | 3,627 | ||
| c. Other provisions Balance 1.1.2007 |
11,432 | ||
| Changes for the period 1.1. – 31.12.2007 | |||
| Decrease of provision for contingent liabilities | (2,895) | ||
| Provisions used during the period | (18) | ||
| Foreign exchange differences | (74) | ||
| Balance 31.12.2007 | 8,445 | ||
| Changes for the period 1.1. – 31.12.2008 | |||
| Provisions charged to profit and loss | 2,190 | ||
| Provisions used during the period | (443) | ||
| Foreign exchange differences | (326) | ||
| Balance 31.12.2008 | 9,866 | ||
The amount of other provisions charged to profit and loss is included in "other expenses" of the income statement.
| 33. Share capital | ||
|---|---|---|
| Number of shares | Paid-in capital | |
| Opening balance 1 January 2007 | 408,022,002 | 1,591,286 |
| Exercise of share options | 2,954,650 | 11,523 |
| Balance 31 December 2007 | 410,976,652 | 1,602,809 |
| Share capital increase through the capitalization of the share premium reserve of € 184,033 and part of taxed retained earnings of € 144,748, with an increase of the nominal value of each share from € 3.90 to € 4.70 (Decision of Shareholders' |
||
| meeting held on 3 April 2008) | 328,781 | |
| Balance 31 December 2008 | 410,976,652 | 1,931,590 |
| Each share has a single voting right in the Shareholders meetings. | ||
| 34. Share premium | ||
| Opening balance ( 1 January 2007) | 127,961 | |
| Difference of exercised share options | 56,072 | |
| Balance 31 December 2007 | 184,033 | |
| Capitalization (note 33) | (184,033) | |
| Balance 31 December 2008 |
Reserves are analyzed as follows
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Statutory reserve | 460,184 | 412,520 |
| Available for sale reserve | (173,773) | (1,775) |
| Foreign exchange difference reserve from the translation of foreign operations | (98,007) | 34,917 |
| Total | 188,404 | 445,662 |
According to the Bank's articles of association (article 26) as amended in May 2008, the Bank is required to transfer 5% of its annual net profit to the statutory reserve, until the reserve amounts to 50% of share capital. This reserve can only be used to offset losses according to article 44 of Law 2190/1920.
For the companies incorporated abroad the statutory reserve is formed according to local regulations.
a. Included in retained earnings are gains from the sale of listed shares and other non-taxable income or special taxable income that is not subject to tax and will not be distributed.
The reserves which were formed by 31 December 2005, have been taxed.
The reserves which were formed during 2007 and thereafter are subject to tax at the rate applicable to the Bank (Law 3634/2008).
The reserves which have been subject to tax may be distributed or capitalized without any further tax liability.
b. According to the article 3 paragraph 1 of Law 148/1967 entities are obliged to distribute each year dividends, unless decided otherwise by the Shareholders in general meeting a minimum amount equal to 35% of the annual profits after the deduction of the statutory reserve appropriation and the gain from the sale of shares. The net profit arising from the valuation of financial instruments to fair value after deducting losses for the same reason is not included in the calculation of the dividend as defined by the law 148/67.
According to paragraph 3 of article 1 of Law 3723/2008 relating to strength of liquidity in order to deal with the challenges of the international crisis, the dividend distribution cannot exceed 35% as determined in the above law.
The ordinary General Shareholders' Meeting held on 3 April 2008, approved the distribution of a dividend for 2007 of € 0.90 per share. As at 31.12.2008, the total amount of € 362,199 has been deducted from retained earnings.
On 25 February 2008 the Bank's wholly subsiadiary Alpha Insurance Agents A.E. sold 10,080 of the Bank's shares with cost value € 188 at the sale price of €20,8 per share. The net of proceeds of the sale amounted to € 21, which was recognized directly to retained earning.
The Bank pursuant to the decisions of prior years General Meeting of Shareholders, purchased during the first quarter of 2008, 8,123,677 treasury shares at a cost of € 167,551 (€ 20.63 per share).
Based on the decision of the general meeting of shareholders held on 3 April 2008 which approved the establishment of a share buy back program, for the period April 2008 - April 2010, the Bank acquired during 1.4 - 31.12.2008 13,998,747 treasury shares at a cost of € 242,839 (€ 17.35 per share).
On 30 June 2008, the Bank completed the sale of 16,439,066 treasury shares the cost of which amounted to € 341,405, through a private placement, which represented 4% of its issued share capital. The result of the above transaction has been recognized directly to the Retained earnings.
As at 31 December 2008 the Bank holds 5,683,358 treasury shares with a cost of € 68,985 (€ 12.14 per share).
The number of treasury shares and the cost are analyzed as follows:
| Number of shares Cost | Percentage | ||
|---|---|---|---|
| Balance 31.12.2007 | 10,080 | 188 | |
| Purchases 1.1 - 31.12.2008 | 22,122,424 | 410,390 | 5.38% |
| Sales 1.1 - 31.12.2008 | (16,449,146) | (341,593) | (4.01%) |
| BBalance 31.12.2008 | 5,683,358 | 68,985 | 1.38% |
Alpha Group Jersey a wholly owned subsidiary of the Bank has issued the following hybrid securities:
• On 5 December 2002 an amount of € 200 million preferred securities with interest step up clause, which represent Lower Tier 1 capital for the Group.
These are perpetual securities and may be redeemed by the issuer after the expiration of 10 years. The issuer has the discretion not to pay a dividend on the conditions that the Bank does not pay a dividend to common Shareholders. They carry interest at 3-month Euribor plus a margin of 2.65%. If redemption option is not exercised by the issuer the margin is increased by 1.325% reaching 3.975% in total. The preferred securities are listed on the Luxembourg Stock Exchange.
Non-cumulative dividend of preferred securities carry fixed interest at 6% for the first 5 years and thereafter interest is determined based on the formula 4x(CMS10-CMS2) with a ceiling and floor rate of 10% and 3.25% respectively. CMS10 and CMS2 represent the Euribor of interest rate swaps of 10 and 2 years, respectively.
| Hybrid securities | 31.12.2008 | 31.12.2007 |
|---|---|---|
| Perpetual with 1st call option in 2012 | 300,000 | 300,000 |
| Perpetual with 1st call option in 2015 | 588,000 | 588,000 |
| Total | 888,000 | 888,000 |
| Securities held from Group companies | (694) | (106) |
| Total | 887,306 | 887,894 |
The Bank, in the ordinary course of business, is a defendant in claims from customers and other legal proceedings. No provision has been recorded because after consultation with legal department, the ultimate disposition of these matters is not expected to have a material effect on the financial position or operations of the Bank.
There are no pending legal cases or issues in progress which may have a material impact on the financial statements or operations of the other companies of the Group. However, the Group recorded a provision amounting to € 4.2 million for pending legal cases or issues in progress.
The Bank and the companies, Alpha Astika Akinita A.E., Messana Holdings S.A., Ionian Hotel Enterprises A.E., ABC Factors A.E. and Kafe Alpha A.E. have been audited by the tax authorities for the years up to and including 2005. The Bank's branches in Bulgaria and in Albania have been audited by the tax authorities for the years up to and including 2007, while in London has been audited by tax authorities for the years up to and including 2005. Alpha Bank Romania S.A. and Alpha Insurance Agents AE. have been audited by the tax authorities for the year up to and including 2006. Tax audits are in progress at Alpha Finance A.E.P.E.Y., and Alpha Leasing A.E. for fiscal years from 2003-2006 and 2005-2007 respectively. The companies Alpha Ventures A.E., Alpha Private Investment Services A.E.P.E.Y., Oceanos A.T.O.E.E., Ionian Holdings A.E., Evremethea A.E. and APE Commercial Property A.E. used the clauses of Law 3697/08 and concluded their unaudited tax fiscal years 2002-2006, 2002-2005, 2003-2006, 2005-2006, 2005- 2006 and 2003-2006, respectively. The remaining companies of the Group has been audited by the tax authorities, for the years up to and including the year ended 31 December 2002.
Additional taxes and penalties may be imposed for the unaudited years.
The Group's minimum future lease payments are:
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| less than one year | 48,624 | 30,894 |
| between one and five years | 162,958 | 92,662 |
| more than five years | 134,604 | 79,219 |
| T Total | 346,186 | 202,775 |
| The minimum future revenues are: | ||
| 31.12.2008 | 31.12.2007 | |
| less than one year | 6,056 | 6,017 |
| between one and five years | 19,267 | 22,806 |
| more than five years | 6,901 | 9,177 |
| T Total | 32,224 | 38,000 |
| d) Off balance sheet liabilities | ||
| 31.12.2008 | 31.12.2007 | |
| Letters of credit | 191,937 | 48,014 |
| Letters of guarantee | 5,652,060 | 4,835,271 |
| Undrawn credit facilities | 18,040,379 | 17,573,361 |
| Total | 23,884,376 | 22,456,646 |
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Loans to customers | 964,490 | 800,490 |
| Securities from reverse Repos | 400,000 | |
| Financial assets at fair value through profit or loss | 60,964 | |
| Investment securities | 5,632,896 | 160,000 |
| Total | 7,058,350 | 960,490 |
The Bank has collaterized customer loans to the Bank of Greece in accordance with the Monetary Policy Council Act No 54/27.2.2004 as in force, and following its amendment by Monetary Policy Council Act No 61/6.12.2006. With this act the Bank of Greece accepts as collateral for monetary policy purposes and intraday credit, non-marketable assets, which should meet the terms and conditions of the above act.
From the investments securities an amount of €5 million is pledged as collateral to the clearing house of derivative transactions "ETESEP AE" as a margin account insurance.
The above mentioned financial assets measured at fair value through profit or loss derived from reserve repos and investments securities are pledged as collateral to Bank of Greece for the participation in the Intra – Europe clearing of payments system on an ongoing time (TARGET) and in major acts of financing from European Central Bank.
From the above securities € 3.5 billion are held by the Bank from the securitization of mortgage and consumer loans. The above bonds are not presented in "Investment Securities" but are presented net from the banks liabilities to the special purpose entities that issued these securities.
On 7 May 2008 the Bank completed a new Medium Term Notes Program amounting to USD 7.5 billion, according to Rule 144A of the American Law, which will be offered to institutional investors. The issuer will be Alpha Group Jersey Limited a wholly owned subsidiary of the Bank. The Notes will be guaranteed by the Bank and will be traded in Luxembourg's stock exchange. The program is not yet active.
The consolidated financial statements apart from the parent company ALPHA BANK include the following entities:
| Country of | Group's ownership interest % | ||
|---|---|---|---|
| Name | Incorporation | 31.12.2008 | 31.12.2007 |
| 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 | 99.91 | 99.91 |
| 4. Alpha Bank AD Skopje | FYROM | 100.00 | 100.00 |
| 5. Alpha Bank Jersey Ltd | Jersey | 100.00 | 100.00 |
| 6. Alpha Bank Srbija A.D. | Serbia | 100.00 | 99.99 |
| 7. Astra Bank OJSC (note 45d) | Ukraine | 93.33 | |
| Leasing Companies | |||
| 1. Alpha Leasing A.E. | Greece | 100.00 | 100.00 |
| 2. Alpha Leasing Romania S.A. | Romania | 99.99 | 99.99 |
| 3. ABC Factors A.E. | Greece | 100.00 | 100.00 |
| 4. Alpha Asset Finance C.I. Ltd | Jersey | 100.00 | 100.00 |
| Investment Banking | |||
| 1. Alpha Finance A.E.P.Ε.Υ. (note 45a) | Greece | 100.00 | 100.00 |
| 2. Alpha Finance US Corporation | USA | 100.00 | 100.00 |
| 3. Alpha Finance Romania S.A. | Romania | 99.98 | 99.98 |
| 4. Alpha Ventures Α.Ε. | Greece | 100.00 | 100.00 |
| 5. AEF European Capital Investments B.V. (note 45c) | The Netherlands | 100.00 | |
| 6. Alpha Ventures Capital Management (note 45h) | Greece | 100.00 | |
| Asset Management | |||
| 1. Alpha Asset Management Α.Ε.D.Α.Κ. | Greece | 100.00 | 100.00 |
| 2. Alpha Private Investment Services A.E.P.E.Y. | Greece | 100.00 | 100.00 |
| 3. 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 LTD Cyprus | Cyprus | 100.00 | 100.00 |
| 3. Alpha Insurance Brokers S.R.L. | Romania | 99.91 | 99.91 |
| 4. ALPHALIFE A.A.E.Z. | Greece | 100.00 | 100.00 |
| Real estate and hotel | |||
| 1. Alpha Astika Akinita Α.Ε. | Greece | 88.59 | 84.10 |
| 2. Ionian Hotel Enterprises Α.Ε. | Greece | 96.64 | 94.81 |
| 3. Oceanos Α.Τ.Ο.Ε.Ε. | Greece | 100.00 | 100.00 |
| 4. Alpha Real Estate D.O.O. Beograd | Serbia | 88.59 | 84.10 |
| 5. Alpha Astikα Akinita D.O.O.E.L. Skopje | FYROM | 88.59 | 84.10 |
| 6. Tourist Resorts Α.Ε. (note 45b) | Greece | 94.81 | |
| 7. Alpha Immovables Bulgaria E.O.O.D. | Bulgaria | 88.59 | 84.10 |
| Special purpose 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 Investment Ltd | Cyprus | 100.00 | 100.00 |
| 4. Ionian Holdings Α.Ε. | Greece | 100.00 | 100.00 |
| 5. Messana Holdings S.A. | Luxemburg | 100.00 | 100.00 |
| 6. Ionian Equity Participations Ltd | Cyprus | 100.00 | 100.00 |
| 7. Alpha Covered Bonds Plc (note 45ib) | United Kingdom | 100.00 | |
| 8. ABL Holdings Jersey Ltd (note 45id) | Jersey | 100.00 | |
| 9. Katanalotika Plc (note 45ie) | United Kingdom | ||
| Other companies | |||
| 1. Alpha Bank London Nominees Ltd | United Kingdom | 100.00 | 100.00 |
| 2. Alpha Trustees Ltd | Cyprus | 100.00 | 100.00 |
| 3. Flagbright Ltd | United Kingdom | 100.00 | 100.00 |
| 4. Alpha Advisory Romania S.R.L. | Romania | 99.98 | 99.98 |
| 5. Evremathea Α.Ε. | Greece | 100.00 | 100.00 |
| 6. Kafe Alpha A.E. | Greece | 100.00 | 100.00 |
| 7. Ionian Supporting Services Α.Ε. | Greece | 100.00 | 100.00 |
| 74 |
| Country of | Group's ownership interest % | ||
|---|---|---|---|
| Name | Incorporation | 31.12.2008 | 31.12.2007 |
| 1. Cardlink Α.Ε. | Greece | 50.00 | 50.00 |
| 2. APE Fixed Assets Α.Ε. | Greece | 60.10 | 60.10 |
| 3. APE Commercial Property Α.Ε. | Greece | 72.20 | 60.10 |
| 4. Anadolu Alpha Gayrimenkul Ticaret Anonim Sirketi (note 45ic) | Turkey | 50.00 | |
| 5. APE Investment Property S.A. | Greece | 67.42 | 67.42 |
| 6. Αlpha TANEO A.K.E.S. (note 45h) | Greece | 51.00 |
The subsidiaries were fully consolidated and the joint ventures were consolidated under the proportionate method.
The Group hedges the foreign exchange risk arising from the net investment in Alpha Bank London Ltd., Alpha Bank Romania S.A. and Alpha Finance US Corporation through the use of the FX swaps and interbank deposits in the functional currency of the above subsidiaries.
| Country of | Group's ownership interest % | ||
|---|---|---|---|
| Name | Incorporation | 31.12.2008 | 31.12.2007 |
| 1. Evisak Α.Ε. | Greece | 27.00 | 27.00 |
| 2. AEDEP Thessalias and Stereas Ellados | Greece | 50.00 | 50.00 |
| 3. A.L.C. Novelle Investments Ltd | Cyprus | 33.33 | 33.33 |
| 4. EL.P.E.T. Valkaniki Α.Ε. (note 45ι) | Greece | 26.71 |
The associates included in consolidated financial statements are measured under the equity method.
amounts in million Euro
1.1 - 31.12.2008
| Investment | South | ||||||
|---|---|---|---|---|---|---|---|
| Corporate | Asset | Banking/ | Eastern | ||||
| Retail | Banking | Management/Insurance | Treasury | Europe | Other | Group | |
| Interest | 1,093.8 | 322.9 | 15.3 | 21.8 | 342.6 | 2.2 | 1,798.6 |
| Commission | 185.9 | 86.0 | 65.3 | 43.2 | 85.7 | (1.7) | 464.4 |
| Other income | 14.2 | 12.0 | 1.6 | (15.4) | 68.9 | 1.4 | 82.7 |
| Total income | 1,293.9 | 420.9 | 82.2 | 49.6 | 497.2 | 1.9 | 2,345.7 |
| Total | |||||||
| expenses | (595.3) | (129.9) | (51.2) | (40.7) | (295.7) | (65.5) | (1,178.3) |
| Impairment | |||||||
| losses | (278.9) | (172.6) | (0.3) | (0.1) | (89.9) | (541.8) | |
| Profit before | |||||||
| tax | 419.7 | 118.4 | 30.7 | 8.8 | 111.6 | (63.6) | 625.6 |
| Assets | 23,605.0 | 19,925.4 | 1,800.4 | 8,722.7 | 10,532.6 | 683.9 | 65,270.0 |
| Liabilities | 34,267.3 | 2,898.1 | 1,935.3 | 13,825.5 | 6,880.7 | 1,522.4 | 61,329.3 |
| Capital | |||||||
| expenditures | 80.8 | 30.1 | 2.1 | 6.7 | 85.3 | 5.2 | 210.2 |
| Depreciation and | |||||||
| amortization | 37.3 | 10.4 | 2.0 | 1.8 | 23.4 | 14.0 | 88.9 |
| Asset | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Corporat e |
Management / |
Investmen t Banking/ |
South Eastern |
Discontinued | Group (continuing |
||||
| Retail | Banking | Insurance | Treasury | Europe | Other | Group | operation | operation) | |
| Interest | 993.6 | 308.4 | 18.7 | 36.9 | 231.7 | 16.9 | 1,606.2 | 0.9 | 1,605.3 |
| Commission | 166.0 | 91.5 | 89.6 | 50.6 | 69.2 | (2.0) | 464.9 | 0.4 | 464.5 |
| Other | |||||||||
| income | 18.6 | 5.5 | 13.3 | 28.7 | 44.9 | 140.2 | 251.2 | 83.7 | 167.5 |
| Total | |||||||||
| income | 1,178.2 | 405.4 | 121.6 | 116.2 | 345.8 | 155.1 | 2,322.3 | 85.0 | 2,237.3 |
| Total | (201.3 | (1,029.5 | |||||||
| expenses | (554.0) | (110.3) | (63.8) | (38.1) | ) | (62.0) | ) | (4.2) | (1,025.3) |
| Impairment | |||||||||
| losses | (115.7) | (84.0) | 1.0 | (27.4) | (0.6) | (226.7) | (226.7) | ||
| Profit | |||||||||
| before tax | 508.5 | 211.1 | 57.8 | 79.1 | 117.1 | 92.5 | 1,066.1 | 80.8 | 985.3 |
| Assets | 19,877.5 | 17,455.1 | 2,284.6 | 7,423.5 | 7,104.0 | 539.6 | 54,684.3 | 54,684.3 | |
| Liabilities | 28,430.3 | 2,552.0 | 1,818.8 | 9,626.2 | 6,198.8 | 1,766.9 | 50,393.0 | 50,393.0 | |
| Capital | |||||||||
| expenditures | 72.7 | 41.9 | 2.0 | 2.0 | 55.2 | 9.2 | 183.0 | 183.0 | |
| Depreciation | |||||||||
| and | |||||||||
| amortization | 35.9 | 8.6 | 2.3 | 1.2 | 19.8 | 10.7 | 78.5 | 0.2 | 78.3 |
Includes all individuals (retail banking customers) of the Group, professionals small and very small companies operating in Greece and abroad except from South-Eastern Europe countries.
The Group through its extensive branch network offers all types of deposit products (deposits/ savings accounts, working capital/ current accounts, investment facilities/ term deposits, Repos, Swaps), loan facilities (mortgages, consumer, corporate loans, letter of guarantees) and debit and credit cards to the above customers.
Includes all medium-sized and large companies, corporations with international activities, corporations managed by the Corporate Banking Division (Corporate) and shipping corporations operating in Greece and abroad except from South-Eastern Europe countries. The Group offers working capital facilities, corporate loans, and letters of guarantees.
This sector also includes the leasing products which are offered through Alpha Leasing A.E. and factoring services to third parties through ABC Factors A.E.
Consists of a wide range of asset management services through Group's private banking and Alpha Asset Management A.E.D.A.K. In addition commissions are included due to the wide range of insurance products to individuals and companies through AXA Insurance which is the corporate successor of the subsidiary Alpha Insurance A.E.
Includes stock exchange, advisory and brokerage services relating to capital markets, and also investment banking facilities, offered either by the Bank or specialized Group companies (Alpha Finance AEPEY, Alpha Ventures A.E.). It is also includes activities of the Dealing Room in the interbank market (FX Swaps, Bonds, Futures, IRS, Interbank placements – Loans etc.).
Consists of the Bank's branches and subsidiaries operating in South Eastern Europe.
This segment consists of the non-financial subsidiaries of the Group and Bank's income and expenses that are not related to its operating activities.
amounts in million Euro
| 1.1 - 31.12.2008 | |||||
|---|---|---|---|---|---|
| Other | |||||
| Greece | countries | Group | |||
| Interest | 1,437.5 | 361.1 | 1,798.6 | ||
| Commission | 375.4 | 89.0 | 464.4 | ||
| Other income | 11.5 | 71.2 | 82.7 | ||
| Total income | 1,824.4 | 521.3 | 2,345.7 | ||
| Total expenses | (869.1) | (309.2) | (1,178.3) | ||
| Impairment | (402.0) | (139.8) | (541.8) | ||
| Profit before tax | 553.3 | 72.3 | 625.6 | ||
| Assets | 51,234.4 | 14,035.6 | 65,270.0 |
| Group | |||||
|---|---|---|---|---|---|
| Discontinued | (continuing | ||||
| Greece | Other countries Group | operation | operation) | ||
| Interest | 1,359.8 | 246.4 | 1,606.2 | 0.9 | 1,605.3 |
| Commissions | 393.5 | 71.4 | 464.9 | 0.4 | 464.5 |
| Other income | 203.4 | 47.8 | 251.2 | 83.7 | 167.5 |
| Total income | 1,956.7 | 365.6 | 2,322.3 | 85.0 | 2,237.3 |
| Total expenses | (816.1) | (213.4) | (1,029.5) | (4.2) | (1,025.3) |
| Impairment | (199.3) | (27.4) | (226.7) | (226.7) | |
| Profit before tax | 941.3 | 124.8 | 1,066.1 | 80.8 | 985.3 |
| Assets | 45,524.2 | 9,160.1 | 54,684.3 | 54,684.3 |
The Group has established a systematic and disciplined management framework for the reliable measurement of risk. Considering the stability and continuity of its operations, management places high priority on the goal of implementing and continuously improving this framework, in order to minimize potential negative effects on Group's financial results.
The Board of Directors of the Bank has overall responsibility for the improvement and oversight of the Risk Management framework. Risk Management Committee meets on a quarterly basis and reports its activities to the Board of Directors. The Risk Management Committee is responsible for the implementation and monitoring compliance with the risk management policies. The Bank reexamines the effectiveness of the risk management framework on a regular basis in order to ensure compliance with international best practices and regulatory framework.
Risk management division operate within the Group under the supervision of the Group's Chief Risk Officer and have been assigned with the responsibility of implementing the risk management framework, according to the directions of the Risk Management Committee.
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk is considered the most significant risk for the Group, and its continuous monitoring is management's first priority.
The Group in order to effectively manage credit risk has developed specific methodologies and systems to measure credit risk. These systems and methodologies are continuously evolving so as to provide to the maximum extent possible current and productive support in the decisions making process of the business units in order to avoid possible adverse consequences on the results of the Group.
The main tool for the measurement of credit risk is the credit risk grading system established in Alpha Bank Group. Current systems use both quantitative and qualitative criteria of measurement and also criteria of transactional behavior in order to report customer probabilities of loss given defaults. Respective models are continuously improved in order for the total loan portfolio to be included in the new system of internal grading imposed by capital adequacy. The credit grading system consists of nine basic grades. Additionally, the Group uses ratings provided by International Rating Agencies.
Credit risk rating also determine both credit limits and collaterals and it is systematically reassessed on a six or twelve month basis. The reassessment is based on the customer's credit worthiness and on any new information and events that may have a significant impact on the level of credit risk.
Credit risk grading systems are being constantly tested qualitatively in order to assure at every turn their ability.
At the same time the Group performs stress testing exercises concerning credit risk on a regular basis. Based on respective stress testing an estimation is provided of the size of financial losses that could occur under extreme transactional behavior of the clients or of economic environment. Additionally, on regular basis large exposures are monitored and management and the Board of Directors are informed.
The Group assesses on regular basis whether there is objective evidence of impairment.
The Group assesses as at each balance sheet date, whether there is evidence of impairment in accordance with the general principles and methodology set out in IAS 39 and the relevant implementation guidance.
Specifically the above mentioned procedures include the following steps:
a. Establishment of events that provide objective evidence that a loan is impaired (trigger events).
In note 1.13 "Impairment losses on loans and advances" the accounting principles applied for loan impairment are described in detail.
| 31.12.2008 Exposure before impairment |
Impairment | Net exposure to credit risk |
31.12.2007 Exposure before impairment |
Impairment | Net exposure to credit risk |
|
|---|---|---|---|---|---|---|
| A. Credit risk exposure | ||||||
| relating | ||||||
| to on balance sheet items | ||||||
| Due from banks | 2,837,837 | 7,867 | 2,829,970 | 3,516,393 | 6,697 | 3,509,696 |
| Loans and advances to | ||||||
| customers: | ||||||
| Individuals: | ||||||
| ▪ Mortgages | 13,538,068 | 94,384 | 13,443,684 | 11,186,669 | 55,402 | 11,131,267 |
| ▪ Consumer | 4,669,423 | 195,228 | 4,474,195 | 3,606,631 | 142,221 | 3,464,410 |
| ▪ Credit cards | 1,285,118 | 56,154 | 1,228,964 | 1,092,863 | 54,123 | 1,038,740 |
| ▪ Other | 119,400 | 119,400 | 146,762 | 146,762 | ||
| Total | 19,612,009 | 345,766 | 19,266,243 | 16,032,925 | 251,746 | 15,781,179 |
| Corporate loans: | ||||||
| ▪ Companies | 29,779,390 | 863,259 | 28,916,131 | 24,771,065 | 521,921 | 24,249,144 |
| ▪ Leasing | 1,448,224 | 29,101 | 1,419,123 | 1,338,340 | 24,977 | 1,313,363 |
| ▪ Factoring | 599,888 | 3,215 | 596,673 | 532,640 | 3,215 | 529,425 |
| ▪ Other receivables | 541,185 | 34,653 | 506,532 | 237,695 | 38,735 | 198,960 |
| Total | 32,368,687 | 930,228 | 31,438,459 | 26,879,740 | 588,848 | 26,290,892 |
| Financial asset at fair value | ||||||
| through profit or loss | ||||||
| ▪ Government bonds | 78,458 | 78,458 | 241,724 | 241,724 | ||
| ▪ Other debt securities | 2,677 | 2,677 | 21,729 | 21,729 | ||
| ▪ Derivative financial | ||||||
| instruments | 485,026 | 485,026 | 383,432 | 383,432 | ||
| Total | 566,161 | 566,161 | 646,885 | 646,885 | ||
| Investment securities: | ||||||
| ▪ Available for sale | ||||||
| (government bonds) | 366,804 | 366,804 | 1,925,351 | 1,925,351 | ||
| ▪ Available for sale (other) | 336,384 | 336,384 | 1,086,803 | 1,086,803 | ||
| ▪ Available for sale (other | ||||||
| variable yield securities) ▪ Held to maturity (government |
49,338 | 49,338 | 53,640 | 53,640 | ||
| bonds) | 1,805,579 | 1,805,579 | ||||
| ▪ Held to maturity (other) | 2,683,130 | 2,683,130 | ||||
| Total | 5,241,235 | 5,241,235 | 3,065,794 | 3,065,794 | ||
| Total amount of on balance | ||||||
| sheet items exposed to | ||||||
| credit risk (a) | 60,625,929 | 1,283,861 | 59,342,068 | 50,141,737 | 847,291 | 49,294,446 |
| Other on balance sheet items not | ||||||
| exposed to credit risk | 5,927,886 | 5,927,886 | 5,280,413 | 5,280,413 | ||
| Total Assets | 66,553,815 | 1,283,861 | 65,269,954 | 55,422,150 | 847,291 | 54,574,859 |
| B. Credit risk exposure | ||||||
| relating to off balance sheet items: |
||||||
| Letters of guarantee and letters | ||||||
| of credit | 5,843,997 | 3,627 | 5,840,370 | 4,883,285 | 45,929 | 4,837,356 |
| Undrawn credit facilities (1) | 18,040,379 | 18,040,379 | 17,573,361 | 17,573,361 | ||
| Total amount of off balance | ||||||
| sheet items exposed to | ||||||
| credit risk (b) | 23,884,376 | 3,627 | 23,880,749 | 22,456,646 | 45,929 | 22,410,717 |
| Total credit risk exposure (a+b) |
84,510,305 | 1,287,488 | 83,222,817 | 72,598,383 | 893,220 | 71,705,163 |
(1) Undrawn credit facilities as of 31.12.2008 include an amount of € 1,051.6 million (31.12.2007: € 921 million) which are committed limits that cannot be canceled in cases where it becomes apparent that the counterparty will fail to meet their contractual obligations .
| 31.12.2008 Neither past due nor |
Past due but | |||
|---|---|---|---|---|
| impaired | not impaired | Impaired | Total | |
| Loans and advances to individuals | ||||
| ▪ Mortgage | ||||
| Performing loans | 11,701,254 | 11,701,254 | ||
| Past due 1 - 90 days | 1,410,752 | 1,410,752 | ||
| Past due > 90 days | 426,062 | 426,062 | ||
| 11,701,254 | 1,410,752 | 426,062 | 13,538,068 | |
| ▪ Credit cards, consumer and other loans | ||||
| Performing loans | 4,969,771 | 4,969,771 | ||
| Past due 1 - 90 days | 781,971 | 781,971 | ||
| Past due > 90 days | 322,199 | 322,199 | ||
| 4,969,771 | 781,971 | 322,199 | 6,073,941 | |
| Corporate loans | ||||
| Performing loans | 27,536,637 | 421,406 | 27,958,043 | |
| Past due 1 - 90 days | 3,000,557 | 114,479 | 3,115,036 | |
| Past due > 90 days | 230,380 | 1,065,228 | 1,295,608 | |
| 27,536,637 | 3,230,937 | 1,601,113 | 32,368,687 | |
| Total portfolio | ||||
| Performing loans | 44,207,662 | 421,406 | 44,629,068 | |
| Past due 1 - 90 days | 5,193,280 | 114,479 | 5,307,759 | |
| Past due > 90 days | 230,380 | 1,813,489 | 2,043,869 | |
| Total | 44,207,662 | 5,423,660 | 2,349,374 | 51,980,696 |
| 31.12.2007 Neither past due nor impaired |
Past due but not impaired |
Impaired | Total | |
|---|---|---|---|---|
| Loans and advances to individuals | ||||
| ▪ Mortgage | ||||
| Performing loans | 9,833,963 | 9,833,963 | ||
| Past due 1 - 90 days | 1,083,852 | 1,083,852 | ||
| Past due > 90 days | 268,854 | 268,854 | ||
| 9,833,963 | 1,083,852 | 268,854 | 11,186,669 | |
| ▪ Credit cards, consumer and other loans | ||||
| Mortgage | 4,209,177 | 4,209,177 | ||
| Past due 1 - 90 days | 431,590 | 431,590 | ||
| Past due > 90 days | 205,489 | 205,489 | ||
| 4,209,177 | 431,590 | 205,489 | 4,846,256 | |
| Corporate loans | ||||
| Mortgage | 22,826,730 | 240,585 | 23,067,315 | |
| Past due 1 - 90 days | 2,605,516 | 84,853 | 2,690,369 | |
| Past due > 90 days | 263,823 | 858,233 | 1,122,056 | |
| 22,826,730 | 2,869,339 | 1,183,671 | 26,879,740 | |
| Total portfolio | ||||
| Performing loans | 36,869,870 | 240,585 | 37,110,455 | |
| Past due 1 - 90 days | 4,120,958 | 84,853 | 4,205,811 | |
| Past due > 90 days | 263,823 | 1,332,576 | 1,569,399 | |
| Total | 36,869,870 | 4,384,781 | 1,658,014 | 42,912,665 |
31.12.2008
| Mortgage | Credit cards, consumer and other loans |
Corporate loans |
Total | |
|---|---|---|---|---|
| Low risk | 11,701,254 | 4,969,771 | 26,577,295 | 43,248,320 |
| Under surveillance | 959,342 | 959,342 | ||
| Total | 11,701,254 | 4,969,771 | 27,536,637 | 44,207,662 |
| 31.12.2007 | Credit cards, |
| Mortgage | consumer and other loans |
Corporate loans |
Total | |
|---|---|---|---|---|
| Low risk | 9,833,963 | 4,209,177 | 22,046,275 | 36,089,415 |
| Under surveillance | 780,455 | 780,455 | ||
| Total | 9,833,963 | 4,209,177 | 22,826,730 | 36,869,870 |
This category includes loans that have indications that the counterparty will not be able to meet their contractual obligations, accounts were a settlement was agreed during the last 12 months, and they are subsequently meet their obligations. These loans amounted to € 167.7 million as at 31.12.2008 (31.12.2007: € 51.6 million)
| 31.12.2008 | ||||
|---|---|---|---|---|
| Mortgage | Credit cards, consumer and other loans |
Corporate loans |
Total | |
| Past due 1 - 90 days | 1,410,752 | 781,971 | 3,000,557 | 5,193,280 |
| Past due > 90 days | 230,380 | 230,380 | ||
| Total | 1,410,752 | 781,971 | 3,230,937 | 5,423,660 |
| Fair value of collaterals | 1,976,438 | 51,001 | 4,481,826 | 6,509,265 |
| 31.12.2007 | ||||
| Mortgage | Credit cards, consumer and other loans |
Corporate loans |
Total |
| Fair value of collaterals | 1,647,538 | 106,949 | 3,693,984 | 5,448,471 |
|---|---|---|---|---|
| Total | 1,083,852 | 431,590 | 2,869,339 | 4,384,781 |
| 263,823 | 263,823 | |||
| Past due > 90 days | ||||
| Past due 1 - 90 days | 1,083,852 | 431,590 | 2,605,516 | 4,120,958 |
| Mortgage | Credit cards, consumer and other loans |
Corporate loans |
Total | |
|---|---|---|---|---|
| Carrying amount before impairment | 426,062 | 322,199 | 1,601,113 | 2,349,374 |
| Allowance of impairment | (94,384) | (251,382) | (930,228) | (1,275,994) |
| Carrying amount | 331,678 | 70,817 | 670,885 | 1,073,380 |
| Fair value of collaterals | 381,926 | 28,166 | 1,300,868 | 1,710,960 |
31.12.2008
| 31.12.2007 | ||||
|---|---|---|---|---|
| Mortgage | Credit cards, consumer and other loans |
Corporate loans |
Total | |
| Carrying amount before impairment | 268,854 | 205,489 | 1,183,671 | 1,658,014 |
| Allowance of impairment | (55,402) | (196,344) | (588,848) | (840,594) |
| Carrying amount Fair value of collaterals |
213,452 260,899 |
9,145 21,582 |
594,823 1,000,142 |
817,420 1,282,623 |
| 31.12.2008 | ||||||
|---|---|---|---|---|---|---|
| Due from Banks | Trading securities |
Derivatives financial instruments |
Available for sale |
Held to maturity |
Total | |
| ΑΑΑ | 30,310 | 1,359 | 170,391 | 202,060 | ||
| ΑΑ- to ΑΑ+ | 520,029 | 1,261 | 49,725 | 306,390 | 877,405 | |
| Α- to Α+ | 1,055,286 | 68,462 | 252,091 | 285,250 | 3,059,931 | 4,721,020 |
| Lower than Α- | 1,262,522 | 12,673 | 2,786 | 416,192 | 951,997 | 2,646,170 |
| Unrated | 198,578 | 198,578 | ||||
| Total | 2,837,837 | 81,135 | 485,026 | 752,526 | 4,488,709 | 8,645,233 |
| Due from Banks | Trading securities |
Derivatives financial instruments |
Available for sale |
Held to maturity |
Total | |
|---|---|---|---|---|---|---|
| ΑΑΑ | 81,305 | 81,305 | ||||
| ΑΑ- to ΑΑ+ | 289,905 | 265,630 | 10,000 | 565,535 | ||
| Α- to Α+ | 1,664,704 | 244,813 | 54,622 | 2,062,609 | 4,026,748 | |
| Lower than Α- | 1,561,784 | 18,640 | 347 | 911,880 | 2,492,651 | |
| Unrated | 62,833 | 62,833 | ||||
| Total | 3,516,393 | 263,453 | 383,432 | 3,065,794 | 7,229,072 |
| Due from Banks | Trading securities |
Derivatives financial instruments |
Available for sale |
Held to maturity |
Total | |
|---|---|---|---|---|---|---|
| Neither past due nor impaired |
2,829,970 | 81,135 | 485,026 | 752,526 | 4,488,709 | 8,637,366 |
| Past due and not impaired |
||||||
| Impaired | 7,867 | 7,867 | ||||
| Total | 2,837,837 | 81,135 | 485,026 | 752,526 | 4,488,709 | 8,645,233 |
| Due from Banks | Trading securities |
Derivatives financial instruments |
Available for sale |
Held to maturity |
Total | |
|---|---|---|---|---|---|---|
| Neither past due nor impaired Past due and not impaired |
3,509,696 | 263,453 | 383,432 | 3,065,794 | 7,222,375 | |
| Impaired | 6,697 | 6,697 | ||||
| Total | 3,516,393 | 263,453 | 383,432 | 3,065,794 | 7,229,072 |
In the following tables are presented the financial instruments exposed to credit risk carrying amounts by industry sectors of the counterparties.
31.12.2008
| Financial Institutions and other financial services |
Manufacturing | Construction and real estate |
Wholesale and retail trade |
Public sector Transportation Shipping | Hotels - Tourism |
Other sectors Individuals Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Credit risk exposure relating to on balance sheet items |
|||||||||||
| Due from banks |
2,837,837 | 2,837,837 | |||||||||
| Loans and advances to customers |
|||||||||||
| Individuals: | |||||||||||
| ▪ Mortgage | 13,538,068 | 13,538,068 | |||||||||
| ▪ Credit cards and consumer |
5,954,541 | 5,954,541 | |||||||||
| ▪ Other receivables |
119,400 | 119,400 | |||||||||
| Total | 19,612,009 | 19,612,009 | |||||||||
| Corporate loans: |
|||||||||||
| ▪ Companies | 921,906 | 5,958,662 | 5,248,953 | 7,135,998 | 238,705 | 2,276,743 | 1,635,567 | 2,236,160 | 4,667,881 | 30,320,575 | |
| ▪ Leasing | 13,745 | 252,693 | 410,402 | 384,897 | 264 | 29,612 | 86,505 | 270,106 | 1,448,224 | ||
| ▪ Factoring | 43,571 | 263,141 | 4,229 | 225,176 | 5,194 | 1,965 | 56,612 | 599,888 | |||
| Total | 979,222 | 6,474,496 | 5,663,584 | 7,746,071 | 238,969 | 2,311,549 | 1,635,567 | 2,324,630 | 4,994,599 | 32,368,687 | |
| Financial assets at fair value through profit or loss: |
|||||||||||
| ▪ Debt securities |
439 | 73,936 | 6,760 | 81,135 | |||||||
| ▪ Derivative financial |
|||||||||||
| instruments | 412,272 | 72,754 | 485,026 | ||||||||
| Total | 412,272 | 439 | 73,936 | 79,514 | 566,161 | ||||||
| Investment securities |
|||||||||||
| ▪ Available for sale |
209,351 | 26,104 | 42,423 | 336,569 | 138,079 | 752,526 | |||||
| ▪ Held to maturity |
2,297,517 | 119,100 | 123,459 | 72,213 | 1,876,420 | 4,488,709 | |||||
| Total carrying amount of on balance sheet items exposed to credit risk (a) |
6,736,199 | 6,593,596 | 5,813,147 | 7,861,146 | 2,525,894 | 2,311,549 | 1,635,567 | 2,324,630 | 5,212,192 19,612,009 | 60,625,929 | |
| Other on balance sheet items not exposed to credit risk |
5,927,886 | 5,927,886 | |||||||||
| Total assets | 6,736,199 | 6,593,596 | 5,813,147 | 7,861,146 | 2,525,894 | 2,311,549 | 1,635,567 | 2,324,630 11,140,078 19,612,009 | 66,553,815 | ||
| Credit risk exposure relating to off balance sheet |
| Total credit risk exposure (a+b) |
6,762,169 | 7,749,061 | 7,849,673 | 8,954,389 | 2,536,101 | 2,368,600 | 1,692,548 | 2,429,811 24,555,944 19,612,009 | 84,510,305 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Total carrying amount of off balance sheet items exposed to credit risk (b) |
25,970 | 1,155,465 | 2,036,526 | 1,093,243 | 10,207 | 57,051 | 56,981 | 105,181 19,343,752 | 23,884,376 | |
| Undrawn credit facilities and other credit liabilities |
18,040,379 | 18,040,379 | ||||||||
| Letters of guarantee and letters of credit |
25,970 | 1,155,465 | 2,036,526 | 1,093,243 | 10,207 | 57,051 | 56,981 | 105,181 | 1,303,373 | 5,843,997 |
| items: |
31.12.2007
| Financial Institutions and other financial services |
Manufacturing | Construction and real estate |
Wholesale and retail trade |
Public sector Transportation Shipping | Hotels - Tourism |
Other sectors Individuals Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Credit risk exposure relating to on balance sheet items |
|||||||||||
| Due from banks |
3,516,393 | 3,516,393 | |||||||||
| Loans and advances to customers |
|||||||||||
| Individuals: | |||||||||||
| ▪ Mortgage | 11,186,669 | 11,186,669 | |||||||||
| ▪ Credit cards and consumer |
4,699,494 | 4,699,494 | |||||||||
| ▪ Other receivables |
146,762 | 146,762 | |||||||||
| Total | 16,032,925 | 16,032,925 | |||||||||
| Corporate loans: |
|||||||||||
| ▪ Companies | 1,206,591 | 4,844,582 | 3,649,578 | 6,099,197 | 238,362 | 1,935,614 | 1,360,515 | 2,034,856 | 3,639,465 | 25,008,760 | |
| ▪ Leasing | 133,151 | 251,264 | 360,413 | 344,364 | 481 | 64,245 | 184,422 | 1,338,340 | |||
| ▪ Factoring | 34,113 | 269,615 | 2,685 | 168,996 | 1,265 | 55,966 | 532,640 | ||||
| Total | 1,373,855 | 5,365,461 | 4,012,676 | 6,612,557 | 238,843 | 1,935,614 | 1,360,515 | 2,100,366 | 3,879,853 | 26,879,740 | |
| Financial assets at fair value through profit or loss: |
|||||||||||
| ▪ Debt securities |
236,340 | 27,113 | 263,453 | ||||||||
| ▪ Derivative financial |
|||||||||||
| instruments | 324,929 | 58,503 | 383,432 | ||||||||
| Total Investment securities |
324,929 | 236,340 | 85,616 | 646,885 | |||||||
| ▪ Available for sale |
803,345 | 82,100 | 80,246 | 1,856,217 | 243,886 | 3,065,794 | |||||
| Total carrying amount of on balance sheet items exposed to credit risk (a) |
6,018,522 | 5,447,561 | 4,012,676 | 6,692,803 | 2,331,400 | 1,935,614 | 1,360,515 | 2,100,366 | 4,209,355 | 16,032,925 | 50,141,737 |
| Other on balance sheet items not exposed to credit risk |
5,280,413 | 5,280,413 | |||||||||
| Total assets | 6,018,522 | 5,447,561 | 4,012,676 | 6,692,803 | 2,331,400 | 1,935,614 | 1,360,515 | 2,100,366 | 9,489,768 16,032,925 | 55,422,150 | |
| Credit risk exposure relating to off balance sheet items: |
|||||||||||
| Letters of guarantee and letters |
11,009 | 729,337 | 902,888 | 770,334 | 4,534 | 10,203 | 38,701 | 124,063 | 2,292,216 | 4,883,285 |
86
| Total credit risk exposure (a+b) |
6,029,531 | 6,176,898 | 4,915,564 | 7,463,137 | 2,335,934 | 1,945,817 | 1,339,216 | 2,224,429 | 24,074,932 16,032,925 | 72,598,383 |
|---|---|---|---|---|---|---|---|---|---|---|
| Total carrying amount of off balance sheet items exposed to credit risk (b) |
11,009 | 729,337 | 902,888 | 770,334 | 4,534 | 10,203 | 38,701 | 124,063 | 19,865,577 | 22,456,646 |
| Undrawn credit facilities and other credit liabilities |
17,573,361 | 17,573,361 | ||||||||
| of credit |
Market risk is the risk of losses arising from unfavourable changes in interest rates, foreign exchange rates, stock exchange indexes, equity prices and commodities. Losses may also occur either from the trading portfolio or from the banking book.
The market risk is measured by the Value at Risk – VAR. The method applied for calculating Value at Risk is historical simulation. The Bank applies a holding period of 1 and 10 days, depending on the time required to liquidate the portfolio.
| 2008 | 2007 | |||||
|---|---|---|---|---|---|---|
| Foreign currency | Interest | |||||
| risk | rate risk | Price risk | Covariance | Total | Total | |
| 31 December | 418,401 | 1,085,578 | 189,006 | (17,623) 1,128,506 | 320,791 | |
| Average daily value (annual) | 246,199 | 2,006,198 | 302,964 | (485,090) 2,070,271 | 1,019,495 | |
| Maximum daily value (annual) | 57,275 | 3,460,779 | 645,807 | (439,967) 3,723,894 | 3,027,642 | |
| Minimum daily value (annual) | 95,617 | 651,307 | 102,094 | (268,428) | 580,590 | 223,039 |
The above items concern the Bank. The Group's subsidiaries and branches have limited trading positions, which are immaterial compared to the positions of the Bank. As a result the market risk effect deriving from these positions is immaterial.
The Value at Risk methodology is complemented with stress tests based on both historical and hypothetical extreme movements of market parameters, in order to estimate the potential size of losses that could arise in extreme conditions.
Within the scope of policy-making for financial risk management by the Assets and Liabilities Management Committee (ALCO), exposure limits and maximum loss (stop loss) limits for various products of the trading portfolio have been set. In particular limits have been set for the following risks:
Positions held in these products are monitored during the day and are examined as to the corresponding limit percentage cover and limit excess.
Apart from the trading portfolio market risk may also arise from the Banking Book. This risk is foreign currency risk and interest rate risk.
The Group takes on exposures to effects of fluctuations in foreign exchange rates. The General Management of the Bank sets limits on the level of exposure by currency and in total for both overnight and intra-day positions. The total position arises from the net on balance sheet position and derivatives forward position as presented in the tables below:
| 31.12.2008 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| USD | GBP | CHF | JPY | RON | RSD | Other F/C EURO | Total | ||
| ASSETS | |||||||||
| Cash and balances with Central Banks |
1,298,584 | 1,898 | 642 | 84 | 127,224 | 87,008 | 76,608 | 1,858,899 | 3,450,947 |
| Due from banks |
290,022 | 1,602 | 77,743 | (9,697) | 12,902 | 49,317 | 40,591 | 2,367,490 | 2,829,970 |
| Financial asset at fair value through profit or loss |
39 | 33 | 7,080 | 73,983 | 81,135 | ||||
| Derivative financial instruments |
485,026 | 485,026 | |||||||
| Loans and advances to customers |
2,293,991 | 633,792 | 2,249,582 | 62,355 | 730,419 | 90,514 | 241,391 | 44,402,658 | 50,704,702 |
| Investment Securities |
|||||||||
| - Available for-sale |
61,997 | 586 | 11,406 | 100,077 | 3,134 | 114,869 | 460,457 | 752,526 | |
| - Held to maturity |
523,911 | 3,964,798 | 4,488,709 | ||||||
| Investments in subsidiaries, associates and joint ventures |
59,260 | 59,260 | |||||||
| Investment property |
1,106 | 65,769 | 66,875 | ||||||
| Property, plant and equipment |
35 | 2,360 | 59,160 | 58,712 | 48,097 | 1,085,876 | 1,254,240 | ||
| Goodwill and other intangible |
|||||||||
| assets Deferred tax |
131 | 2,769 | 59,843 | 8,775 | 88,443 | 159,961 | |||
| assets Other assets |
656 | 1,485 32,079 |
41 | 363 9,555 |
3,702 10,522 |
208 2,938 |
327,741 493,508 |
333,499 549,299 |
|
| Non-current assets held for sale |
522 | 53,283 | 53,805 | ||||||
| Total Assets | 4,469,235 | 673,933 | 2,328,008 | 64,148 | 1,042,502 | 363,858 | 541,079 | 55,787,191 | 65,269,954 |
| LIABILITIES | |||||||||
| Due to banks and customers |
4,659,498 | 448,964 | 3,625 | 1,196,546 | 827,727 | 115,966 | 586,608 | 43,671,639 | 51,510,573 |
| Derivative financial instruments |
805,346 | 805,346 |
89
| Debt securities in issue and other borrowed funds |
64,352 | 577 | 110,288 | 240,103 | 217,172 | 114,319 | 6,494,374 | 7,241,185 | |
|---|---|---|---|---|---|---|---|---|---|
| Liabilities for current income tax and other |
|||||||||
| taxes | 99 | 9,595 | 136 | 403 | 117,829 | 128,062 | |||
| Deferred tax liabilities |
12 | 4,726 | 867 | 170 | 192,004 | 197,779 | |||
| Employee defined benefit obligations |
566 | 42,196 | 42,762 | ||||||
| Other | |||||||||
| liabilities | 3,376 | 29,895 | 734 | 564 | 8,765 | 1,121 | (6,624) | 1,312,456 | 1,350,287 |
| Provisions | 7 | 37 | 2,144 | 160 | 50,915 | 53,263 | |||
| Total liabilities |
4,727,233 | 479,547 | 114,647 | 1,437,213 | 1,068,022 | 120,800 | 695,036 | 52,686,759 | 61,329,257 |
| Net on balance sheet position |
(257,998) | 194,386 | 2,213,361 | (1,373,065) | (25,520) | 243,058 | (153,957) | 3,100,432 | 3,940,697 |
| Derivatives forward foreign exchange position |
261,345 | (180,386) (2,220,769) | 1,370,877 | 113,924 | (9,820) | 288,704 | 388,160 | 12,035 | |
| Total Foreign Exchange Position |
3,347 | 14,000 | (7,408) | (2,188) | 88,404 | 233,238 | 134,747 | 3,488,592 | 3,952,732 |
| Undrawn | |||||||||
| credit facilities | 161,786 | 102,107 | 237 | 49,252 | 23,770 | 17,703,227 | 18,040,379 |
| 31.12.2007 | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| USD | GBP | CHF | JPY | Other F/C | EURO | Total | ||||
| Total Assets | 3,258,506 | 852,047 | 1,489,756 | 28,942 | 3,679,183 | 45,375,855 | 54,684,289 | |||
| Total liabilities | 4,390,310 | 539,841 | 110,297 | 1,012,275 | 3,346,162 | 40,994,140 | 50,393,025 | |||
| Net on-balance sheet position | (1,131,804) | 312,206 | 1,379,459 | (983,333) | 333,021 | 4,381,715 | 4,291,264 | |||
| Derivatives forward foreign exchange position |
1,150,203 | (294,136) | (1,383,736) | 978,495 | 49,646 | (320,192) | 180,280 | |||
| Total Foreign Exchange | ||||||||||
| Position | 18,399 | 18,070 | (4,277) | (4,838) | 382,667 | 4,061,523 | 4,471,544 | |||
| Undrawn credit facilities | 158,990 | 84,645 | 512,007 | 16,817,719 | 17,573,361 |
The high exposure in other currencies is due to our participation in Ukraine.
The net foreign exchange position as at 31.12.2008 presents the following sensitivity analysis.
| Exchange rate variation | Impact on net income | |||
|---|---|---|---|---|
| Currency | scenario against Euro(%) | before tax | Impact on equity | |
| Appreciation of USD 5% | 176 | |||
| USD | Depreciation of USD 5% | (159) | ||
| Appreciation of GBP 5% | 737 | |||
| GBP | Depreciation of GBP 5% | (667) | ||
| Appreciation of CHF 5% | (390) | |||
| CHF | Depreciation of CHF 5% | 353 | ||
| Appreciation of RON 5% | 5,036 | |||
| RON | Depreciation of RON 5% | (4,556) | ||
| Appreciation of RSD 5% | 12,276 | |||
| RSD | Depreciation of RSD 5% | (11,107) | ||
| Appreciation of UAH 5% | 4,831 | |||
| UAH | Depreciation of UAH 5% | (4,371) |
Gap analysis is performed in order to examine the interest rate risk of assets and liabilities. Assets and liabilities are allocated into time bands according to their repricing date for variable interest rate instruments, or according to their maturity date for fixed rate instruments.
Gap Analysis is presented in the table below:
| Less than 1 month |
1 to 3 months |
3 to 6 months |
6 to 12 months |
1 to 5 years |
More than 5 years |
Non interest bearing |
Total | |
|---|---|---|---|---|---|---|---|---|
| ASSETS | ||||||||
| Cash and balances with Central | ||||||||
| Banks | 2,701,103 | 749,844 | 3,450,947 | |||||
| Due from banks | 2,260,624 | 301,609 | 80,983 | 25,677 | 153,613 | 7,464 | 2,829,970 | |
| Financial asset at fair value | ||||||||
| through profit or loss | 4,253 | 246 | 67,233 | 3,704 | 275 | 5,424 | 81,135 | |
| Derivative financial instruments | 485,026 | 485,026 | ||||||
| Loans and advances to | ||||||||
| customers | 27,996,110 | 7,494,753 | 4,685,497 | 2,419,609 | 7,123,900 | 984,833 | 50,704,702 | |
| Investment securities | ||||||||
| - Available-for-sale | 65,624 | 159,788 | 74,904 | 108,048 | 225,729 | 38,795 | 79,638 | 752,526 |
| - Held to maturity | 667,966 | 1,182,592 | 1,682,605 | 139,956 | 354,213 | 461,377 | 4,488,709 | |
| Investments in subsidiaries, associates and joint ventures |
||||||||
| Investment property | 59,260 | 59,260 | ||||||
| Property, plant and equipment | 66,875 | 66,875 | ||||||
| Goodwill and other intangible assets |
1,254,240 | 1,254,240 | ||||||
| Deferred tax assets | 159,961 333,499 |
159,961 333,499 |
||||||
| Other assets | 549,299 | 549,299 | ||||||
| Non-current assets held for sale | 53,805 | 53,805 | ||||||
| Total Assets | 34,180,706 | 9,138,988 | 6,591,222 | 2,696,994 | 7,857,730 | 1,497,893 | 3,306,421 65,269,954 | |
| LIABILITIES | ||||||||
| Due to banks | 7,042,377 | 1,761,626 | 112,372 | 38,363 | 6,850 | 2,208 | 8,963,796 | |
| Derivatives financial instruments | 805,346 | 805,346 | ||||||
| Due to customers | 27,722,621 | 8,260,079 | 3,480,953 | 1,638,603 | 1,297,102 | 147,419 | 42,546,777 | |
| Debt securities in issue and | ||||||||
| other borrowed funds | 3,241,006 | 3,368,875 | 407,946 | 10,573 | 212,785 | 7,241,185 | ||
| Liabilities for current income tax | ||||||||
| and other taxes | 128,062 | 128,062 | ||||||
| Deferred tax liabilities | 197,779 | 197,779 | ||||||
| Employee defined benefit obligations |
42,762 | 42,762 | ||||||
| Other liabilities | 1,350,287 | 1,350,287 | ||||||
| Provisions | 53,263 | 53,263 | ||||||
| Total liabilities | 38,811,350 13,390,580 | 4,001,271 | 1,687,539 | 1,516,737 | 149,627 | 1,772,153 61,329,257 | ||
| EQUITY | ||||||||
| Share capital | 1,931,590 | 1,931,590 | ||||||
| Share premium | ||||||||
| Reserves | 188,404 | 188,404 | ||||||
| Retained earnings | 969,815 | 969,815 | ||||||
| Treasury shares | (68,985) | (68,985) | ||||||
| Minority interests | 32,567 | 32,567 | ||||||
| Hybrid securities | 887,306 | 887,306 | ||||||
| Total Equity | 887,306 | 3,053,391 | 3,940,697 | |||||
| Total Liabilities and Equity | 38,811,350 | 14,277,886 | 4,001,271 | 1,687,539 | 1,516,737 | 149,627 | 4,825,544 | 65,269,954 |
| GAP | (4,630,644) (5,138,898) | 2,589,951 | 1,009,455 | 6,340,993 | 1,348,266 | (1,519,123) | ||
| CUMULATIVE GAP | (4,630,644) (9,769,542) (7,179,591) (6,170,136) | 170,857 | 1,519,123 |
| 31.12.2007 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Less than 1 month |
1 to 3 months |
3 to 6 months |
6 to 12 months |
1 to 5 years |
More than 5 years |
Non interest bearing |
Total | |
| ASSETS | ||||||||
| Cash and balances | ||||||||
| with Central Banks | 2,712,836 | 550,776 | 3,263,612 | |||||
| Due from banks | 2,621,128 | 179,809 | 42,390 | 132,781 | 522,910 | 6,727 | 3,951 | 3,509,696 |
| Financial asset at fair | ||||||||
| value through profit | ||||||||
| or loss | 11,577 | 1,100 | 24,210 | 274 | 37,068 | 191,818 | 266,047 | |
| Derivative financial | ||||||||
| instruments | 383,432 | 383,432 | ||||||
| Loans and advances | ||||||||
| to customers | 22,707,257 | 7,819,711 | 3,823,368 | 1,014,238 | 6,487,910 | 219,587 | 42,072,071 | |
| Investment securities | ||||||||
| - Available-for-sale | 157,570 | 583,990 | 1,861,064 | 128,553 | 56,316 | 271,342 | 98,066 | 3,156,901 |
| Investments in | ||||||||
| associates | 5,320 | 5,320 | ||||||
| Investment property | 73,560 | 73,560 | ||||||
| Property, plant and equipment |
1,173,275 | 1,173,275 | ||||||
| Goodwill and other intangible assets |
134,497 | 134,497 | ||||||
| Deferred tax assets | 170,257 | 170,257 | ||||||
| Other assets | 385,676 | 385,676 | ||||||
| Non-current assets held for sale |
89,945 | 89,945 | ||||||
| Total Assets | 28,593,800 | 8,584,610 | 5,751,032 | 1,275,846 | 7,104,204 | 689,474 | 2,685,323 | 54,684,289 |
| LIABILITIES | ||||||||
| Due to banks | 2,935,144 | 1,309,583 | 156,254 | 34,154 | 722 | 1,198 | 681 | 4,437,736 |
| Derivatives financial | ||||||||
| instruments | 384,139 | 384,139 | ||||||
| Due to customers | 28,710,388 | 2,747,807 | 1,138,970 | 734,091 | 1,267,459 | 7,577 | 58,866 | 34,665,158 |
| Debt securities in | ||||||||
| issue and other | ||||||||
| borrowed funds | 2,004,290 | 6,548,581 | 612,409 | 20,659 | 3,358 | 9,189,297 | ||
| Liabilities for current | ||||||||
| income tax and other | ||||||||
| taxes | 158,797 | 158,797 | ||||||
| Deferred tax liabilities | 94,807 | 94,807 | ||||||
| Employee defined | ||||||||
| benefit obligations | 42,019 | 42,019 | ||||||
| Other liabilities | 1,323,554 | 1,323,554 | ||||||
| Provisions | 95,935 | 95,935 | ||||||
| Liabiliteis related to assets held-for-sale |
1,583 | 1,583 | ||||||
| Total liabilities EQUITY |
34,033,961 | 10,605,971 | 1,907,633 | 788,904 | 1,271,539 | 8,775 | 1,776,242 | 50,393,025 |
| Share capital | 1,602,809 | 1,602,809 | ||||||
| Share premium | 184,033 | 184,033 | ||||||
| Reserves | 445,662 | 445,662 | ||||||
| Retained earnings | 1,138,195 | 1,138,195 | ||||||
| Treasury shares | (188) | (188) | ||||||
| Minority interest | 32,859 | 32,859 | ||||||
| Hybrid securities | 887,894 | 887,894 | ||||||
| Total Equity | 887,894 | 3,403,370 | 4,291,264 | |||||
| Total Liabilities and | ||||||||
| Equity | 34,033,961 | 11,493,865 | 1,907,633 | 788,904 | 1,271,539 | 8,775 | 5,179,612 | 54,684,289 |
| GAP | (5,440,161) | (2,909,255) | 3,843,399 | 486,942 | 5,832,665 | 680,699 | (2,494,289) | |
| CUMULATIVE GAP | (5,440,161) | (8,349,416) | (4,506,017) | (4,019,075) | 1,813,590 | 2,494,289 |
GAP Analysis allows an immediate calculation of changes in net interest income and equity for available-for-sale securities upon application of alternative scenarios, such as changes in market interest rates or changes in the Bank's and in Group subsidiaries base interest rates.
| Currency | Interest rate variation scenario (parallel fall or rise in yield curves) |
Sensitivity for net interest income (annual) |
Sensitivity of equity |
|---|---|---|---|
| + 50 basis points | 3,956 | (2,639) | |
| EUR | 50 basis points | (3,956) | 2,691 |
| + 50 basis points | (2,917) | (269) | |
| USD | 50 basis points. | 2,917 | 274 |
| + 50 basis points | (33) | (7) | |
| GBP | 50 basis points. | 33 | 8 |
Liquidity risk relates to the Group's ability to maintain sufficient funds to cover its obligations.
A substantial portion of the Group's assets are funded with customer deposits and bonds issued by the Group. This type of funding comprises two categories:
Deposits for working capital purposes consist of savings accounts and sight deposits. Although these deposits may be withdrawn on demand the number of accounts and type of depositors ensure that unexpected fluctuations are limited and that these deposits constitute mostly a stable deposit base.
Customer deposits and bonds issued for investment purposes concern customer term deposits, customer repurchase agreements (repos) and sale of bonds issued by the Group.
According to Liquidity Gap Analysis, cash flows arising from all assets and liabilities are estimated and allocated into time bands, depending on when they occur, with the exception of securities held for trading and available-for-sale securities. In the case of such portfolios, which are considered liquid, they are allocated in the first period using relevant haircuts.
It is set below tables of liquidity and it should be noted that term deposits are presented with their contractual due date. On total term deposits 80% is renewed at the expiration date and therefore are considered as a part of the stable deposit base.
| 31.12.2008 | ||||||
|---|---|---|---|---|---|---|
| Less than | 1 to | 3 to | 6 to | More than | ||
| 1 month | 3 months | 6 months | 12 months | 1 year | Total | |
| ASSETS | ||||||
| Cash and balances with Central | ||||||
| Banks | 3,450,947 | 3,450,947 | ||||
| Due from banks | 2,056,270 | 373,224 | 151,816 | 20,725 | 227,935 | 2,829,970 |
| Financial asset at fair value | ||||||
| through profit or loss | 77,078 | 4,057 | 81,135 | |||
| Derivative financial assets | 485,026 | 485,26 | ||||
| Loans and advances to customers | 2,268,849 | 2,139,717 | 2,351,111 | 3,195,773 | 40,749,252 | 50,704,702 |
| Investment securities | ||||||
| - Available-for-sale | 711,466 | 41,060 | 752,526 | |||
| - Held to maturity | 3,142,096 | 1,346,613 | 4,488,709 | |||
| Investments in subsidiaries, | ||||||
| associates and joint ventures | 59,260 | 59,260 | ||||
| Investment property | 66,875 | 66,875 | ||||
| Property, plant and equipment | 1,254,240 | 1,254,240 | ||||
| Goodwill and other intangible assets |
159,961 | 159,961 | ||||
| Deferred tax assets | 333,499 | 333,499 | ||||
| Other assets | 180,083 | 23,513 | 9,527 | 336,176 | 549,299 | |
| Non-current assets held for sale | 53,805 | 53,805 | ||||
| Total Assets | 12,371,815 | 2,512,941 | 2,526,440 | 3,226,025 | 44,632,733 | 65,269,954 |
| LIABILITIES | ||||||
| Due to banks | 7,000,709 | 855,933 | 141,197 | 411,071 | 554,886 | 8,963,796 |
| Derivatives financial liabilities | 805,346 | 805,346 | ||||
| Due to customers | ||||||
| (including debt securities in | ||||||
| issue) | 12,411,831 | 7,654,310 | 3,660,407 | 2,682,524 | 16,137,705 | 42,546,777 |
| Debt securities in issue held by | ||||||
| institutional investors and other | ||||||
| borrowed funds | 867,792 | 439,780 | 413,359 | 1,185,401 | 4,334,853 | 7,241,185 |
| Liabilities for current income tax | ||||||
| and other taxes | 128,062 | 128,062 | ||||
| Deferred tax liabilities | 197,779 | 197,779 | ||||
| Employee defined benefit | ||||||
| obligations | 42,762 | 42,762 | ||||
| Other liabilities | 998,317 | 71,577 | 60,690 | 61,182 | 158,521 | 1,350,287 |
| Provisions | 53,263 | 53,263 | ||||
| Liabiliteis related to assets held for-sale |
||||||
| Total liabilities | 22,212,057 | 9,021,600 | 4,275,653 | 4,340,178 | 21,479,769 61,329,257 | |
| Total Equity | 3,940,697 | 3,940,697 | ||||
| Total Liabilities and Equity | 22,212,057 | 9,021,600 | 4,275,653 | 4,340,178 | 25,420,466 | 65,269,954 |
| Liquidity GAP | (9,840,242) | (6,508,659) | (1,749,213) | (1,114,153) | 19,212,267 |
| Less than 1 month |
1 to 3 months |
3 to 6 months |
6 to 12 months |
More than 1 year |
Total | |
|---|---|---|---|---|---|---|
| ASSETS | ||||||
| Cash and balances with Central | ||||||
| Banks | 3,228,742 | 2,552 | 1,408 | 2,137 | 28,773 | 3,263,612 |
| Due from banks | 2,573,667 | 130,342 | 80,716 | 134,673 | 590,298 | 3,509,696 |
| Financial assets at fair value through profit or loss |
||||||
| - Bonds | 252,745 | 13,302 | 266,047 | |||
| Derivative financial instruments | 383,432 | 383,432 | ||||
| Loans and advances to customers | 944,848 | 2,985,886 | 3,950,801 | 6,380,285 | 27,810,251 | 42,072,071 |
| Investment securities | ||||||
| - Bonds classified in available for | ||||||
| sale | 2,904,519 | 152,869 | 3,057,388 | |||
| - Shares classified in available for | ||||||
| sale | 89,562 | 9,951 | 99,513 | |||
| Investments in associates | 5,320 | 5,320 | ||||
| Investment property | 73,560 | 73,560 | ||||
| Property, plant and equipment | 1,173,275 | 1,173,275 | ||||
| Goodwill and other intangible | ||||||
| assets | 134,497 | 134,497 | ||||
| Deferred tax assets | 170,257 | 170,257 | ||||
| Other assets | 7,581 | 14,415 | 158,230 | 205,450 | 385,676 | |
| Non-current assets held for sale Total Assets |
10,385,096 | 3,118,780 | 4,047,340 | 6,675,325 | 89,945 30,457,748 |
89,945 54,684,289 |
| LIABILITIES | ||||||
| Due to banks | 2,938,843 | 849,253 | 140,094 | 32,714 | 476,832 | 4,437,736 |
| Derivatives financial instrurments | 384,139 | 384,139 | ||||
| Due to customers | ||||||
| (including debt securities in | ||||||
| issue) | 7,470,658 | 3,010,010 | 1,710,240 | 1,884,253 | 20,589,997 | 34,665,158 |
| Debt securities in issue held by | ||||||
| institutional investors and other | ||||||
| borrowed funds | 457,103 | 9,859 | 12,576 | 698,538 | 8,011,221 | 9,189,297 |
| Liabilities for current income tax | ||||||
| and other taxes | 50,533 | 101,880 | 6,384 | 158,797 | ||
| Deferred tax liabilities | 94,807 | 94,807 | ||||
| Employee defined benefit | ||||||
| obligations | 42,019 | 42,019 | ||||
| Other liabilities | 1,131,238 | 54,098 | 33,521 | 64,493 | 40,204 | 1,323,554 |
| Provisions | 95,935 | 95,935 | ||||
| Liabiliteis related to assets held | ||||||
| for-sale | 1,583 | 1,583 | ||||
| Total Liabilities | 12,434,097 | 3,923,220 | 1,998,311 | 2,686,382 | 29,351,015 | 50,393,025 |
| Total Equity | 4,291,264 | 4,291,264 | ||||
| Total Liabilities and Equity | 12,434,097 | 3,923,220 | 1,998,311 | 2,686,382 | 33,642,279 | 54,684,289 |
| Liquidity GAP | (2,049,001) | (804,440) | 2,049,029 | 3,988,943 | (3,184,531) |
Cash flows arising from financial liabilities including derivative financial liabilities, are allocated into time bands according to their due date. Estimated interest payments are also included. Liabilities in foreign currency have been translated into Euro. Especially for derivatives, their outflows and inflows are estimated according to their contractual terms.
| Total | Nominal in flows/(outflows) | ||||||
|---|---|---|---|---|---|---|---|
| Balance Sheet |
Less than 1 month |
2 to 3 months |
4 to 6 months |
7 to 12 months |
More than 1 year |
TOTAL | |
| Non-derivative Liabilities |
|||||||
| Due to Banks | 8,963,796 | (7,013,654) | (884,500) | (147,975) | (464,957) | (522,770) | (9,033,856) |
| Due to customers | 42,546,777 | (13,564,585) | (7,718,609) | (3,531,239) | (2,657,075) | (18,854,052) | (46,325,560) |
| Debt securities in issue held by institutional investors and other borrowed |
|||||||
| funds | 7,241,185 | (734,783) | (613,375) | (727,883) | (1,632,978) | (6,472,087) | (10,181,106) |
| Other liabilities | 1,337,970 | (965,366) | (71,577) | (60,690) | (61,182) | (179,155) | (1,337,970) |
| Derivatives held | |||||||
| for liabilities fair | |||||||
| value hedge | 47,551 | ||||||
| - Outflows | (1,370) | (7,392) | (9,935) | (23,734) | (355,462) | (397,893) | |
| - Inflows | 946 | 9,015 | 8,404 | 22,287 | 423,027 | 463,679 | |
| Derivatives held | |||||||
| for assets fair | |||||||
| value hedge | 242,103 | ||||||
| - Outflows | (47,341) | (20,198) | (1,251,662) | (1,319,201) | |||
| - Inflows | 5,266 | 8,971 | 16,381 | 33,500 | 1,209,036 | 1,273,154 | |
| Derivatives held | |||||||
| for trading | 515,692 | ||||||
| - Outflows | (2,202,465) | (1,477,314) | (148,858) | (253,383) | (1,536,747) | (5,618,767) | |
| - Inflows | 2,113,739 | 1,386,812 | 132,291 | 233,112 | 1,573,501 | 5,439,455 | |
| Total | 60,895,074 | (22,362,272) | (9,367,969) | (4,516,845) | (4,824,608) | (25,966,371) | (67,038,065) |
| Off balance sheet items |
|||||||
| Unrecognized loans |
|||||||
| commitments Financial |
(1,051,615) | (1,051,615) | |||||
| guarantees Total off balance |
(96,144) | (40,233) | (25,747) | (60,109) | (135,479) | (357,712) | |
| sheet items | (1,147,759) | (40,233) | (25,747) | (60,109) | (135,479) | (1,409,327) |
| Total | Nominal in flows/(outflows) | ||||||
|---|---|---|---|---|---|---|---|
| Balance Sheet |
Less than 1 month |
2 to 3 months |
4 to 6 months |
7 to 12 months |
More than 1 year |
TOTAL | |
| Non-derivative Liabilities |
|||||||
| Due to Banks | 4,437,736 | (2,942,944) | (860,877) | (151,698) | (47,796) | (521,779) | (4,525,094) |
| Due to customers Debt securities in issue held by |
34,665,158 | (7,902,917) | (2,964,211) | (1,775,079) | (2,054,059) | (20,291,945) | (34,988,211) |
| institutional investors and other borrowed |
|||||||
| funds | 9,189,297 | (445,475) | (123,272) | (118,009) | (880,748) | (11,011,239) | (12,578,743) |
| Other liabilities | 1,323,554 | (1,131,238) | (54,098) | (33,521) | (64,493) | (40,203) | (1,323,553) |
| Derivatives held for liabilities fair value |
|||||||
| hedge | 103,670 | ||||||
| - Outflows | (2,618) | (14,647) | (6,575) | (19,459) | (811,865) | (855,164) | |
| - Inflows | 2,825 | 13,540 | 4,102 | 14,833 | 707,756 | 743,056 | |
| Derivatives held for assets fair value |
|||||||
| hedge | 44,160 | ||||||
| - Outflows | (48,430) | (8,431) | (1,202,158) | (1,259,019) | |||
| - Inflows | 7,810 | 5,839 | 13,598 | 27,061 | 1,158,024 | 1,212,332 | |
| Derivatives held for | |||||||
| trading | 236,309 | ||||||
| - Outflows | (2,196,887) | (304,231) | (258,690) | (133,733) | (864,133) | (3,757,674) | |
| - Inflows | 2,132,027 | 317,068 | 242,863 | 117,933 | 700,966 | 3,510,857 | |
| Total | 49,999,884 | (12,479,417) | (3,984,889) | (2,131,439) | (3,048,892) (32,176,576) | (53,821,213) | |
| Off balance sheet items |
|||||||
| Unrecognized loans commitments |
(921,273) | (921,273) | |||||
| Financial guarantees Total off balance |
(73,860) | (44,776) | (29,966) | (46,853) | (136,074) | (331,529) | |
| sheet items | (995,133) | (44,776) | (29,966) | (46,853) | (136,074) | (1,252,802) |
The table below presents the carrying amounts and the fair values of financial assets and liabilities which are not carried at fair value in the financial statements.
The fair value of loans is estimated based on the interbank market yield curves adjusted with the credit spread of loans.
The fair value of deposits is estimated based on the interbank market yield curves deducted with customers spread depending on form of the deposit.
Both loans and deposits future cash flows are discounted based on their duration and the respective interest rates.
| 31.12.2008 Carrying amount |
Fair value | |
|---|---|---|
| ASSETS Loans and advances to customers |
50,704,702 | 51,589,715 |
| LIABILITIES Due to customers |
42,546,777 | 42,696,404 |
For the remaining financial assets and liabilities which are carried at amortized cost the fair values are not substantially different from the carrying amount.
The policy of the Group is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business.
The dividend policy is always examined in order to achieve the best balance between the higher return for the shareholder and the security affected by the sound capital position.
Share capital increases are performed through shareholders meeting or Board of Directors decisions in accordance with articles of association or relevant laws.
Specifically, the Shareholders' General Meeting held on 6 June 2006 gave the authority to the Board of Directors for the period of four years to approve a share capital increase in accordance with Law 2190/1920 article 13.
The Group is allowed to purchase treasury shares based on the terms and conditions of law.
The Group uses all modern methods to manage capital adequacy. It has issued hybrid and subordinated debt which are included as regulatory own-funds. The cost of these securities is lower than share capital and adds value to the shareholders.
The Bank's capital adequacy is monitored by the Bank of Greece, to which the Bank reports on a quarterly basis.
The minimum capital adequacy ratios (Tier I and capital adequacy ratio) which the Group must adhere to are established by decisions of the Governor of the Bank of Greece.
The calculation of capital adequacy from 1 January 2008 is determined under the new regulatory framework (Basel II), which have been transposed into Greek law by Law 3601/2007. The new regulatory framework significantly amends the measurement of credit risk and introduces capital requirements for operational risk. There are no significant changes in the measurement of market risk. Specifically, credit risk of the investment portfolio and operational risk are measured based on the Standardized Approach.
The capital adequacy ratio is determined by comparing the Bank's regulatory own funds with the risks that the Group undertakes (risk weighted assets). Own funds include Tier I capital (share capital, reserves, minority interest), additional Tier I capital (hybrid securities) and Tier II capital (subordinated debt and fixed asset revaluation reserves). The risk-weighted assets arise from the credit risk of the investment portfolio, the market risk of the trading portfolio and the operational risk.
The current capital ratios (Tier I ratio and capital adequacy ratio) are much higher than the regulatory limits set by the Bank of Greece directive (4% and 8%, respectively) and the capital base is capable to support the business growth of the Bank in all areas for the next years.
| 31.12.2008 Basel II |
31.12.2007 Basel I |
||
|---|---|---|---|
| Tier I | 8.3% 9.6% |
||
| Capital adequacy ratio Tier I + Tier II | 10.1% | 12.5% |
Elements concerning the disclosure of regulatory information for capital adequacy and risk management (Basel II, Pilar III - P.D./BOG 2592/07) will be published in Bank's website.
The Bank and the Group companies entered into a number of transactions with related parties in the normal course of business. These transactions are performed at arms length and are approved by the Group's relevant committees.
a. The outstanding balances of the transactions with members of the Board of Directors, their close family members and the controlled by them entities are as follows:
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Assets | ||
| Loans and advancwes to customers | 172,472 | 39,951 |
| Liabilities | ||
| Due to customers | 73,991 | 43,523 |
| Debt securities in issue | 20,096 | 9,009 |
| Total | 94,087 | 52,532 |
| Letters of guarantee | 21,392 | 83 |
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Interest and similar income | 10,295 | 477 | |
| Interest expense and similar charges | 3,942 | 1,640 |
b. The outstanding balances with associates and the related results of these transactions are as follows:
| 31.12.2008 | 31.12.2007 | ||
|---|---|---|---|
| Assets | |||
| Loans and advances to customers | 277 | ||
| Liabilities | |||
| Due to customers | 406 | 26 | |
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Income | |||
| Interest and similar income | 16 | 33 | |
| Expenses | |||
| Interest expense and similar charges | 2 | ||
| Other expenses | 3,173 | 2,971 |
c. The Group Companies' Board of Directors and Executive General Managers' fees recorded in the income statement for 2008 amounted to €13,021 (31.12.2007: €26,554).
a. According to Law 3606/2007, which incorporates in Greek Legislation the European's Parliament guidance MiFID (2004/2007) and after the relevant decision of the Extraordinary Shareholders' Meeting held on 14.12.2007 and the approval of the Ministry of Development on 11.2.2008, the name of Alpha Finance A.X.E.P.E.Y. was changed to Alpha Finance A.E.P.E.Y.
b. As at 28.3.2008, the subsidiary Ionian Hotel Enterprises A.E. completed the transfer of 100% of Tourist Resort A.E., owner of Hilton Rhodes Resort to the Greek Hotel Company Lampsa S.A. and to Plaka S.A. by 50% respectively. The sale resulted in a gain of € 1.5 million for the Group.
c. On 31.3.2008 the subsidiary AEF European Capital Investments B.V. was liquidated. No profit or loss resulted from the liquidation.
d. On 4.4.2008 the Bank acquired 90% of the newly established Ukrainian Bank Astra Bank OJSC at a cost of € 10.9 million. The Bank agreed with the founders of Astra Bank that they will hold a stake up to 10% of the share capital and will remain as executive members of management.
e. On 22.4.2008 the Bank's subsidiary Alpha Ventures A.E. sold its shares in BIOMAGN AMETVE. From the sale resulted a gain amounting to € 328 thousand.
f. On 8 May 2008 the Bank participated in Alpha Bank Srbija A.D. share capital increase at the total amount of € 49.8 million.
g. On 9.5.2008 the subsidiary Alpha Ventures Α.Ε. established the company Alpha Ventures Capital Management. Alpha Ventures Capital Management has the management of mutual fund of ALPHA-TANEO A.K.E.S., which was founded on 2.6.2008 and the Bank holds a 51% ownership interest.
h. On 21.5.2008 the Bank acquired 847 shares of APE Commercial Property. After the acquisition the Bank's interest in APE Commercial Property was 72.20%.
i. On 21.5.2008, the Group recognised its participation to associate EL.P.E.T. Balcan S.A. which was included in the consolidated financial statements under the equity method.
j. On 30.6.2008 the Bank participated in Astra Bank OJSC share capital increase at the total amount of € 126.4 million plus expenses. After this share capital increase the Bank's interest is 93.33%.
k. On 2.7.2008 Alpha Covered Bonds Plc was established in United Kingdom by the Bank (which has 100% ownership interest) with primary activity the issuance of covered bonds.
l. On 15.8.2008 the Bank sold its participation in "Anadolu Alpha Gayrimenkul Ticaret A.S." or 50% of the share capital, to the other shareholder of Anadolu Group. No profit or loss resulted from the sale.
m. On 29.9.2008 the wholly owned subsidiary of the Bank, Alpha Bank London Limited established in the United Kingdom the company ABL Holdings Jersey Limited. Alpha Bank London Limited transferred its participation in the subsidiary Alpha Asset Finance C.I.Limited to ABL Holdings Jersey Limited.
n. On 10 October 2008 Katalonica plc was established in United Kingdom by the Bank with primary activity the issuance of collaterized securities. The Company is a special purpose entity and is fully consolidated by the Bank as it serves specific Banks needs.
o. On 8 December 2008 the Bank participated in the share capital increase of Alpha Bank Romania by € 20 million.
p. On 18 December 2008 the Bank participated in the share capital increase of Efrimathia A.E. by € 990 thousands.
q. On 19 December 2008 the Bank sold its participation in Alpha Astika Akinita A.E. and Ionian Hotel Enterprises A.E. to the subsidiary Alpha Group Investments Ltd.
r. On 23 December 2008, Real Car A.E. was established in which Alpha Leasing A.E. has a 100% ownership interest.
s. On 29 December 2008 the Bank participated in the share capital increase of APE Commercial Property A.E. by € 3.8 million.
t. On 31 December 2008 the Bank participated in the share capital increase of APE Fixed Assets A.E. by € 3 million.
1. Based on the approved by the general meeting of shareholders held on 3.4.2008 share buy back program, the Bank acquired during 1.1.2009 up to 16.2.2009 457,601 treasury shares at a cost of € 2,666 (or € 5.83 per share).
As at 16.2.2009 the Bank holds 6,140,959 tresury shares at a total cost of € 71,650 or 1.49% of its issued share capital.
2. On 16 December 2008, the Board of Director has decided the Bank's participation, proportionally, to the regulations of law 3723/2008 enhancing economy's liquiding to address the impact of credit crunch.
In this context, on 12 January 2009 in the Bank's extraordinary General Meeting of Shareholders approved:
3. On 17.2.2009 was completed successfully the securitization of part of Bank's bonds portfolio amounting to € 1.25 billion, through a special purpose entity Talanto Plc. A part of the bonds which have received a A1 rating from the Moody's credit rating agency amounts to € 811 million is accepted by the European Central Bank as collateral for refinancing operations.
4. The Board of Directors' intention was to propose a cash dividend for the year 2008, as per the provisions of Law 3723/2008. However, in light of the forthcoming legislative amendments regarding the distribution of dividend, the Board of Directors will suspend any decision on the distribution of dividend until the Annual General Meeting of Shareholders, by which time it expects to be in a position to formulate its final proposal.
| Athens, 24 February 2009 | |||
|---|---|---|---|
| The Chairman of the Board of Directors |
The Managing Director | The Executive Director | Group Financial Reporting Officer |
| Yannis S. Costopoulos I.D. No. Χ 661480 |
Demetrios P. Mantzounis I.D. No. Ι 166670 |
Marinos S. Yannopoulos I.D. No. Ν 308546 |
George N. Kontos I.D. No. AB 522299 |
KPMG Certified Auditors AE 3 Stratigou Tombra Street Aghia Paraskevi GR – 153 42 Athens Greece
Στρατηγού Τόμπρα 3 153 42 Αγία Παρασκευή Ελλάς ΑΡΜΑΕ29527/01AT/B/93/1 62/96
Telephone Τηλ: +30 210 60 62 100 Fax Φαξ: +30 210 60 62 111 Internet www.kpmg.gr e-mail [email protected]
(Translated from the original in Greek)
To the Shareholders of ALPHA BANK A.E.
We have audited the accompanying Financial Statements of ALPHA BANK A.E. (the "Bank") which comprise the balance sheet as at 31 December 2008, and the statements of income , changes in equity and cash flows for the year then ended, and a summary of significant accounting policies and other explanatory notes.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and the fair presentation of these Financial Statements in accordance with International Financial Reporting Standards, as adopted by the European Union. This responsibility includes: designing, implementing, and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatements, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.
Our responsibility is to express an opinion on these Financial Statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free of material misstatements.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Bank's internal control. An audit also includes evaluating the appropriateness of accounting policies used and reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the Financial Statements give a true and fair view, of the financial position of the Bank as of 31 December 2008, and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union.
Athens, 24 February 2009
KPMG Certified Auditors AE
Marios T. Kyriacou Certified Auditor Accountant AM SOEL 11121
Nick Vouniseas Certified Auditor Accountant AM SOEL 18701
| (Thousands of Euro) | |||
|---|---|---|---|
| From 1 January to | |||
| Note | 31.12.2008 | 31.12.2007 | |
| Interest and similar income | 2 | 4,118,961 | 3,106,845 |
| Interest expense and similar charges | 2 | (2,768,455) | (1,879,187) |
| Net interest income | 2 | 1,350,506 | 1,227,658 |
| Fee and commission income | 346,494 | 349,399 | |
| Commission expense | (29,418) | (27,480) | |
| Net fee and commission income | 3 | 317,076 | 321,919 |
| Dividend income | 4 | 74,937 | 45,462 |
| Gains less losses from financial transactions | 5 | (20,584) | (42,833) |
| Other income | 6 | 21,138 | 34,878 |
| 75,491 | 37,507 | ||
| Total income | 1,743,073 | 1,587,084 | |
| Staff costs | 7 | (429,213) | (386,694) |
| General administrative expenses | 8 | (362,411) | (338,490) |
| Depreciation and amortization expenses | 19, 20, 21 | (57,592) | (51,186) |
| Other expenses | (3,072) | (2,486) | |
| Total expenses | (852,288) | (778,856) | |
| Impairment losses and provisions for credit risk | 9 | (495,382) | (194,587) |
| Profit before tax | 395,403 | 613,641 | |
| Income tax | 10 | (61,165) | (156,635) |
| Profit after tax | 334,238 | 457,006 | |
| Earnings per share: | 11 | ||
| Basic earnings per share (€) | 0.82 | 1.13 | |
| Diluted earnings per share (€) | 0.82 | 1.12 |
| (Thousands of Euro) | |||
|---|---|---|---|
| Note | 31.12.2008 | 31.12.2007 | |
| ASSETS | |||
| Cash and balances with Central Banks | 12 | 1,724,081 | 1,650,327 |
| Due from banks | 13 | 8,420,793 | 7,349,675 |
| Financial assets at fair value through profit or loss-Held for trading | 14 | 86,880 | 264,788 |
| Derivative financial assets | 15 | 494,386 | 384,466 |
| Loans and advances to customers | 16 | 42,189,278 | 35,267,874 |
| Investment securities | 17 | ||
| - Available-for-sale | 6,033,897 | 6,300,377 | |
| - Held to maturity | 4,488,709 | ||
| Investments in subsidiaries, associates and joint ventures | 18 | 1,750,902 | 1,626,100 |
| Investment property | 19 | 42,195 | 42,370 |
| Property, plant and equipment | 20 | 649,452 | 603,831 |
| Goodwill and other intangible assets | 21 | 68,723 | 55,836 |
| Deferred tax assets | 22 | 316,069 | 158,160 |
| Other assets | 23 | 419,526 | 280,626 |
| 66,684,891 | 53,984,430 | ||
| Non-current assets held for sale | 24 | 53,283 | 54,706 |
| Total Assets | 66,738,174 | 54,039,136 | |
| LIABILITIES | |||
| Due to banks | 25 | 10,883,969 | 5,637,562 |
| Derivative financial liabilities | 15 | 804,172 | 383,129 |
| Due to customers | 26 | 33,816,094 | 23,334,888 |
| Debt securities in issue and other borrowed funds | 27 | 17,395,646 | 20,521,976 |
| Liabilities for current income tax and other taxes | 28 | 97,855 | 127,863 |
| Deferred tax liabilities | 22 | 158,212 | 82,960 |
| Employee defined benefit obligations | 29 | 3,733 | |
| Other liabilities | 30 | 1,204,462 | 1,159,012 |
| Provisions | 31 | 8,415 | 47,796 |
| Total Liabilities | 64,368,825 | 51,298,919 | |
| EQUITY | |||
| Share capital | 32 | 1,931,590 | 1,602,809 |
| Share premium | 33 | 184,033 | |
| Reserves | 34 | 165,848 | 333,892 |
| Retained earnings | 35 | 340,896 | 619,483 |
| Treasury shares | 36 | (68,985) | |
| Total Equity | 2,369,349 | 2,740,217 | |
| Total Liabilities and Equity | 66,738,174 | 54,039,136 | |
(Thousands of Euro)
| Retained | |||||||
|---|---|---|---|---|---|---|---|
| Note | Share capital | Share premium | Reserves | earnings | Treasury shares | Total | |
| Balance 1.1.2007 | 1,591,286 | 127,961 | 207,853 | 523,201 | (14,465) | 2,435,836 | |
| Changes in equity for the period 1.1 – 31.12.2007 |
|||||||
| Net change in fair value of available for-sale securities |
(48,196) | (48,196) | |||||
| Net change in fair value of available for- sale securities transferred to |
|||||||
| profit or loss from sales Foreign currency translation |
126,825 | 126,825 | |||||
| differences for foreign operations | 200 | 200 | |||||
| Net income recognized directly in equity |
78,629 | 200 | 78,829 | ||||
| Profit for the period, after income | |||||||
| tax | 457,006 | 457,006 | |||||
| Total | 78,629 | 457,206 | 535,835 | ||||
| Purchase of treasury shares | (329,189) | (329,189) | |||||
| Sale of treasury shares | (2,999) | 343,654 | 340,655 | ||||
| Dividends distributed | (304,421) | (304,421) | |||||
| Appropriation to reserves | 53,400 | (53,400) | |||||
| Recognition of employee share | |||||||
| options | 19,487 | 19,487 | |||||
| Exercise of employee share options | 25,477 | (25,477) | |||||
| Issue of new shares due to share | |||||||
| options exercise | 11,523 | 30,595 | 42,118 | ||||
| Other | (104) | (104) | |||||
| Balance 31.12.2007 | 1,602,809 | 184,033 | 333,892 | 619,483 | 2,740,217 |
(Thousands of Euro)
| Note | Share capital | Share premium | Reserves | Retained earnings |
Treasury shares | Total | |
|---|---|---|---|---|---|---|---|
| Balance 1.1.2008 | 1,602,809 | 184,033 | 333,892 | 619,483 | 2,740,217 | ||
| Changes in equity for the period 1.1 - 31.12.2008 |
|||||||
| Net change in fair value of available-for-sale securities (after tax) |
(247,883) | (247,883) | |||||
| Net change in fair value of available-for-sale securities transferred to profit or loss |
33,739 | 33,739 | |||||
| Foreign currency translation differences for foreign operations |
(130) | (130) | |||||
| Net income recognized directly in equity |
(214,144) | (130) | (214,274) | ||||
| Profit for the period after income tax |
334,238 | 334,238 | |||||
| Total | (214,144) | 334,108 | 119,964 | ||||
| Purchase of treasury shares | 36 | (410,390) | (410,390) | ||||
| Sale of treasury shares | 36 | (54,291) | 341,405 | 287,114 | |||
| Share capital increase by capitalization of share premium and retained earnings |
32,33,34 | 328,781 | (184,033) | (144,748) | |||
| Expenses relating to the share capital increase |
(2,204) | (2,204) | |||||
| Dividends distributed | 35 | (362,199) | (362,199) | ||||
| Appropriation to reserves | 34 | 46,100 | (46,100) | ||||
| Other | (3,153) | (3,153) | |||||
| Balance 31.12.2008 | 1,931,590 | 165,848 | 340,896 | (68,985) | 2,369,349 |
| (Thousands of Euro) | |||
|---|---|---|---|
| From 1 January to | |||
| Note | 31.12.2008 | 31.12.2007 | |
| Cash flows from operating activities | |||
| Profit before income tax | 395,403 | 613,641 | |
| Adjustments for: | |||
| Depreciation of property, plant and equipment | 19,20 | 35,393 | 33,355 |
| Amortization of intangible assets | 21 | 22,199 | 17,831 |
| Impairment losses from loans and provisions | 515,105 | 205,733 | |
| Other adjustments | 19,487 | ||
| (Gains)/losses from investing activities | (138,148) | 57,547 | |
| (Gains)/losses from financing activities | 190,159 | 115,678 | |
| 1,020,111 | 1,063,272 | ||
| Net (increase)/decrease in assets relating to operating activities: | |||
| Due from banks | (962,676) | (1,589,718) | |
| Financial assets at fair value through profit or loss and derivative financial assets | 67,988 | (48,481) | |
| Loans and advances to customers | (7,508,784) | (7,202,283) | |
| Other assets | (138,900) | (1,611) | |
| Net increase/(decrease) in liabilities relating to operating activities: | |||
| Due to banks | 5,246,407 | (1,584,555) | |
| Derivative financial liabilities | 421,044 | 156,905 | |
| Due to customers | 7,638,987 | 7,984,035 | |
| Other liabilities | 90,179 | (11,747) | |
| Net cash from operating activities before taxes | 5,874,356 | (1,234,183) | |
| Income taxes and other taxes paid | (101,736) | (86,412) | |
| Net cash flows from operating activities | 5,772,620 | (1,320,595) | |
| Cash flows from investing activities | |||
| Acquisitions of subsidiaries, associates and joint ventures | (235,758) | (28,325) | |
| Proceeds from sale of subsidiaries, associates and joint ventures | 195,721 | 1,136 | |
| Dividends received | 4 | 74,937 | 45,462 |
| Purchase of property, plant and equipment | (133,172) | (98,649) | |
| Disposal of property, plant and equipment | 25,556 | 27,897 | |
| Net (increase)/decrease in investment securities | (4,556,655) | 1,133,696 | |
| Net cash flows from investing activities | (4,629,371) | 1,081,217 | |
| Cash flows from financing activities | |||
| Share capital increase from share options exercise | 42,118 | ||
| Expenses relating to the share capital increase | (2,204) | ||
| (Purchases)/sales of treasury shares | (122,140) | 11,466 | |
| Dividends paid | (360,538) | (302,474) | |
| Proceeds from the issue of debt securities and other borrowed funds | 677,038 | ||
| Repayment of debt securities and other borrowed funds | (477,410) | (440,749) | |
| Net cash flows from financing activities | (962,292) | (12,601) | |
| Effect of exchange rate fluctuations on cash and cash equivalents | 1,239 | 500 | |
| Net increase/(decrease) in cash and cash equivalents | 182,196 | (251,479) | |
| Cash and cash equivalents at the beginning of the year | 12 | 4,356,928 | 4,608,407 |
| Cash and cash equivalents at the end of the year | 12 | 4,539,124 | 4,356,928 |
The Bank operates under the brand name of ALPHA BANK A.E. and with the sign of ALPHA BANK. Its registered office is 40 Stadiou Street, Athens and it is listed as a societe anonyme, with number 6066/06/B/86/05. The Bank's duration is until 2100 which can 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 parites, 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 term of the Board of Directors, elected by the Shareholders at the General Meeting of 19 April 2005, ends in 2010.
The General Meeting of Shareholders on 3 April 2008 approved the resolution to increase the number of the Directors from 14 to 15, as set out in the Bank's Articles of Incorporation and elected Mrs. Ioanna E. Papadopoulou as a non-executive member. It also elected Mr. Minas G. Tanes and Mr. George E. Agouridis as non-executive independent members. The Board of Directors as at 31 December 2008 consists of:
Yannis S. Costopoulos VICE CHAIRMAN (Νon Εxecutive Independent Μember) Minas G. Tanes***
MANAGING DIRECTOR Demetrios P. Mantzounis
EXECUTIVE DIRECTORS AND GENERAL MANAGERS Marinos S. Yannopoulos (CFO)*** Spyros N. Filaretos Artemis Ch. Theodoridis
Sophia G. Eleftheroudaki Paul G. Karakostas* Nicholaos I. Manessis ** Ioanna E. Papadopoulou
George E. Agouridis * Pavlos A. Apostolides ** Thanos M. Veremis Evangelos J. Kaloussis */*** Ioannis K. Lyras **
Hector P. Verykios
The certified auditors of the semi-annual and year end financial statements of the Bank are:
| Principal Auditors: | Marios T. Kyriacou |
|---|---|
| Nick E. Vouniseas | |
| Substitute Auditors: | Charalambos G. Sirounis |
| Nikolaos Ch. Tsiboukas |
of KPMG Certified Auditors A.E.
The Bank's shares are listed in the Athens Stock Exchange since 1925. As at 31 December 2008 Alpha Bank was ranked sixth in terms of market capitalization. Since February 2004 the Bank has been included in the FTSE Eurofirst 300 Index, an index which consists of the 300 largest European companies. Additionally, the Bank is included in a series of other indices, such as S&P Europe 350, FTSE Med 100, MSCI Europe, DJ Euro Stoxx and FTSE4 Good.
Apart from the listing in Greece, the shares of the Bank are listed in the London Stock Exchange in the form of international certificates (GDR's) and they are traded over the counter in New York (ADR's).
As at 31 December 2008 the Bank has 410,976,652 shares in issue.
During 2008, the shares' liquidity amounted to an average 1,422,261 shares per day. The credit rating of the Bank is evaluated by three international credit rating agencies (Standard & Poor's: BBB+, Moody's: A2, Fitch Ratings: A-).
These financial statements relate to the fiscal year 1 January 2008 to 31 December 2008 and they have been prepared: a) In accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union in accordance with Regulation 1606/2002 of the European Parliament and the Council of the European Union on 19 July 2002 and
b) Based on the historical cost basis except for the following assets and liabilities which are measured at fair value:
The financial statements are presented in Euro, rounded to the nearest thousand unless otherwise indicated.
The estimates and judgments applied in preparing the financial statements are based on historical information and assumptions which at present are considered appropriate.
The estimates and assumptions are reviewed on an ongoing basis to take into account current conditions, and the effect of any revisions are recognized in the period in which the estimate is revised.
The accounting policies, applied by the Bank in the financial statements as at 31 December 2008, are the same as those applied in the financial statements for the year ended 31 December 2007 after taking into account the amendments and interpretations issued by the International Accounting Standards Board (IASB) and adopted by the European Union which are effective for annual periods beginning on or after 1.1.2008:
● Amendment of International Accounting Standard 39 «Financial Instruments: Recognition and Measurement» and the International Financial Reporting Standard 7 «Financial Instruments: Disclosures» regarding to the reclassification of financial assets (Regulation 1004/15.10.2008).
This amendment, issued on 13 October 2008, allows under certain conditions, the reclassification of certain financial assets to other categories with different measurement rules than those of the category in which the financial assets where classified upon initial recognition. This reclassification can be applied retrospectively from 1 July 2008. The Bank made use of this amendment and the impact on the financial statements is set out to in note 16
● Interpretation 11 «IFRS 2 – Group and treasury share transactions» (Regulation 611/1.6.2007)
The adoption of this interpretation did not have a substantial impact on the Bank's financial statements.
● Interpretation 14 «IAS 19 – The limit on a defined benefit asset, minimum funding requirements and their interaction» (Regulation 1263/16.12.2008)
This interpretation defines when a surplus in defined benefit plan can be recognized as an asset and to what extent the recognition is limited by any obligation to fund benefit that will accrue in the future.
The adoption of this interpretation did not have a substantial impact on the Bank's financial statements.
Apart from the above Standards and Interpretations, the European Union adopted the following standards and interpretations, which are effective for annual periods beginning after 1.1.2008 and which have not been early adopted by the Bank.
● International Financial Reporting Standard 8 «Operating Segments» (Regulation 1358/21.11.2007) Effective for annual periods beginning on or after 1.1.2009
This standard replaces IAS 14 «Segment reporting». Its adoption by the European Union and by the Bank will have an impact on the Bank's disclosures relating to operating segments.
● Amendment of International Accounting Standard 23 «Borrowing costs» (Regulation 1260/10.12.2008) Effective for annual periods beginning on or after 1.1.2009
On 29 March 2007, the Board issued the revised IAS 23, which removes the option to expense borrowing costs directly attributable to the acquisition of assets that have a substantial period of time to be ready for use or sale. Such borrowing costs are capitalized as part of the cost of the asset.
Its adoption will not have a substantial impact on Bank's financial statements.
i. Service conditions which are further distinguished to:
In addition, for each of the above categories the amendment defines when non-vesting conditions are taken into account in measuring the grant date fair value of the share-based payment as well as the respective accounting treatment. The adoption of this standard by the European Union and the Bank, is not expected to have a significant impact on the financial statement.
● Amendment of International Accounting Standard 1 «Presentation of financial statements» (Regulation
Effective for annual periods beginning on or after 1.1.2009
On 6 September 2007, the Board published the revised version of IAS 1. The most significant changes are the following:
i. Introduction of a statement of comprehensive income. This statement includes the profit or loss of the period and all non-owner changes in equity. Entities may present a separate income statement, but all non-owner changes in equity must be presented in an additional statement.
ii. The statement of changes in equity, will include transactions between the entity and the equity holders.
iii. In the instances where a new accounting standard is retrospectively implemented or items are restated, the comparative figures must include the opening and closing balance sheet of the prior year.
The adoption of this Standard by the European Union and the Bank will affect the presentation of financial statements.
Effective for annual periods beginning on or after 1.1.2009
With the implementation of the above amendment, issued on 14 February 2008, financial instruments that give the holder of the financial instrument the right to require the issuer to repurchase or repay the financial instruments may be classified as equity if certain conditions are met. A similar classification, under certain condition, is also possible for financial instruments where the holder is entitled to a pro-rata share of the net assets of the entity only on liquidation. This amendment requires additional disclosures on the financial statements.
The Bank is examining whether there will be an impact from the adoption of the above amendment in the financial statements.
● Amendment of International Accounting Standard 27 «Consolidated and Separate Financial Statements» and International Financial Reporting Standard 1 «First Time Adoption of International Financial Reporting Standards» regarding the cost of an investment in a subsidiary, associate and jointly controlled entity. Effective for annual periods beginning on or after 1.1.2009 (Regulation 69/23.1.2009).
With this amendment, issued by the Council on 22 May 2008, the cost of an investment in a subsidiary, associate or joint venture in the investor's separate financial statements will not be adjusted for distributions of profits relating to periods prior to acquisition. These profit appropriations will be accounted in income statement as dividend income. This amendment also made changes to IAS 36 - Impairment of Assets, where indications of impairment on investments were included, based on the effect of dividend distribution on equity.
With regard to the first time adopters of IFRS and in order to facilitate the issuance of financial statements, options are given on the cost measurement of an investment in a subsidiary, associate and jointly controlled entity based on either their fair value at the date of transition or the previous GAAP carrying amount.
The amendment will make changes in accounting policies for recognition of dividend's income and determination of the cost of acquisition of Bank's investments.
● Interpretation 13 «Customer loyalty programs» (Regulation 1262/16.12.2008)
Effective for annual periods beginning on or after 1.7.2008
This interpretation, issued on 28 June 2007, addresses the accounting of customer loyalty programs offered by entities to customers as an incentive to increase sales or revenues. In particular, it states that the value of credits awarded to customers must be separated from the initial sale and be recognized as revenue when the credits are redeemed. In cases where the entity collects amounts on behalf of third parties who grant reward points to the entity's customers, these should be accounted for a liability to third parties.
The adoption of this interpretation is not expected to have a significant impact on the Bank's financial statements.
As part of the improvements project the International Accounting Standards Board issued on 22 May 2008, certain non urgent but necessary amendments to various standards. The majority of these are effective for annual periods beginning on or after 1.1.2009.
The adoption of these improvements is not expected to have a significant impact on the Bank's financial statements.
In addition, the International Accounting Standards Board (IASB) has issued the following standards and interpretations which have not yet been adopted by the European Union and they have not also been early adopted by the Bank.
Effective for annual period beginning on or after 1.7.2009
The main changes from the amended standards issued on 10 January 2008, are summarized as follows:
i. In circumstances where changes in ownership interests of subsidiaries after control is obtained or the loss of control, the value of the investment existed prior to the change of ownership interest or the remaining ownership interest, should be measured at fair value with changes recognized in profit and loss account.
ii. Upon initial recognition non-controlling interest might be measured at fair value. In addition non-controlling interest should absorb the total losses incurred attributable to their interest.
iii. Any contingent consideration of an entity is recognized as a liability and measured at fair value.
iv. Costs incurred by the acquirer are not included in the cost of a business combination but are expensed.
Finally, changes in a parent's ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.
● Amendment of International Financial Reporting Standard 1 «First time adoption of International Financial Reporting Standards»
Effective for annual periods beginning on or after 1.7.2009.
On 27 November 2008 published a revised edition with a change in the structure of this standard. The purpose of this change was to improve information and to facilitate implementation of future amedments. This revised edition does not apply to the Bank's financial statements.
● Amendment of International Accounting Standard 39 «Financial Instruments: Recognition and Measurement» concerning eligible hedged items.
Effective for annual periods beginning on or after 1.7.2009.
This amendment issued on 31 July 2008 provides clarifications regarding the application of hedge accounting. It is clarified that as hedged items in fair value hedge or cash flow hedge can be defined as:
The Bank is examining whether there will be an impact from the adoption of the above interpretation in the financial statements.
● Interpretation 12 «Service concession arrangements»
Effective for annual periods beginning on or after 1.1.2008
The interpretation issued on 30 November 2006, clarifies issues relating to the recognition and valuation of assets arising from service concession agreements of public infrastructure. This interpretation does not apply in Bank's activities.
● Interpretation 15 «Agreements for the construction of real estate»
Effective for annual periods beginning on or after 1.1.2009
This interpretation issued on 3 July 2008 provides guidance as how to determine whether an agreement for the construction of real estate or agreements with buyers before the completion of real estate construction is within the scope of IAS 11 (construction contracts) or IAS 18 Revenue (as contracts to provide services or sell goods).
The adoption of this interpretation will have no impact on the financial statements since it does not apply to the Bank.
● Interpretation 16 «Hedges of a net investment in a foreign operation»
Effective for annual periods beginning on or after 1.10.2008.
This interpretation, issued on 3 July 2008, provides clarifications on in the application of hedge accounting of the net investment in a foreign operation which has different functional currency from that of the parent.
This interpretation applies to the Bank's consolidated financial statements.
● Interpretation 17 «Distribution of non-cash assets to owners»
Effective for annual periods beginning on or after 1.7.2009
This interpretation, issued on 27 November 2008, provides guidance to an entity in order to recognize and subsequent measure a liability arising from the distribution of non-cash assets to owners. The Bank is in the process of evaluating the potential effects of this interpretation.
● Interpretation 18 «Transfer of assets from customers»
Effective for annual periods beginning on or after 1.7.2009
This interpretation, issued on 29 January 2009, clarifies the accounting treatment for agreements under which an entity receives from a customer an item of property, plant and equipment that the entity must then use to serve conventional obligations to them. The interpretation applies also, in cases where the entity receives cash from customers to construct or to buy an item of property, plant and equipment to be used as defined above. This interpretation does not apply in Bank activities.
The Bank after considering the present management and reporting structure, and that the majority of its income arises from activities in Greece decided that:
b. the following geographical segments are the secondary reporting format:
Detailed information relating to business and geographical segments is presented in note 38.
The financial statements are presented in Euro, which is the functional currency and the currency of the country of incorporation of the Bank.
Items included in the financial statements of each of the foreign branches are measured at the functional currency of each branch which is the currency of the country of incorporation in which the branch operates or the currency used for the majority of transactions held.
Transactions in foreign currencies are translated to the functional currency at the closing exchange rate at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to the functional currency at the closing exchange rate at that date. Foreign exchange differences arising on translation are recognized in the income statement.
Non-monetary assets and liabilities are recognized at the exchange rate ruling at initial recognition, except for non-monetary items denominated in foreign currencies that are stated at fair value. The exchange differences relating to these items are part of the change in fair value and they are recognized in the income statement or recorded directly in shareholders' equity depending on the classification of the non-monetary item.
The results and financial position of all foreign branches that have a functional currency that is different from the presentation currency of Bank's financial statements are translated as follows:
i. Assets and liabilities are translated to Euro at the closing rate applicable on the balance sheet date. The comparative figures presented are translated to Euro at the closing rate at the respective date of the comparative balance sheet.
ii. Income and expense items are translated to Euro at average exchange rates applicable for each period presented.
The resulting exchange differences from the above translation and those arising from other monetary items designated as a part of the net investment in a foreign entity are recorded in equity. These translation differences are recognized in the income statement when a foreign entity is sold.
For the purposes of the cash flow statement, cash and cash equivalents consist of:
Short-term balances due from banks are amounts that mature within three months of the balance sheet date.
The Bank, upon initial recognition measures financial assets at fair value plus, in case of securities not at fair value through profit or loss, incremental direct transaction costs.
The Bank classifies its financial assets as:
For each of the above classifications the following is applicable:
Included in this category are:
i. loans to customers
ii. amounts paid for a portion or total acquisition of bonds issued by customers that are not quoted in an active market.
iii. all receivables from customers, banks etc.
This category is measured at amortized cost.
Held-to-maturity investments are financial assets that the Bank has the positive intent and ability to hold to maturity.
In this category, the Bank has included bonds and other debt securities with fixed maturity and fixed or determinable cash flows.
This category is carried at amortized cost.
Financial assets included in this category are:
i. Financial assets acquired principally for the purpose of selling in the near term for short term profit.
The Bank has included in this category fixed rate Greek Government bonds and treasury bills, except for certain specific issues, for which different decisions have been taken, and a limited number of shares and corporate loans.
ii. The Bank, at initial recognition, designates these financial assets at fair value and recognizes changes in the fair value in the income statement.
This classification is used in the following circumstances:
• When management monitors and manages the financial instruments on a fair value basis in accordance with a documented risk management or investment strategy.
• When the designation eliminates an accounting mismatch which would otherwise arise from measuring financial assets and liabilities on a different basis (i.e. amortized cost) in relation to another financial asset or liability (i.e. derivatives which are measured at fair value through the profit or loss).
• When the financial instrument contains an embedded derivative that significantly modifies the cash flows.
The Bank, has not classified financial assets at fair value through profit or loss.
Available-for-sale financial assets are investments that have not been classified in any of the previous categories.
The Bank has included in this category:
i. Variable debt securities and interest rate bonds
ii. Certain issues of fixed rate Greek Government bonds, for which a specific decision has been taken, and fixed rate bonds of other issuers
iii. Shares
iv. Mutual fund units
This category is measured at fair value. Changes in fair value are recognized directly in equity until the financial asset is sold or impaired whereupon the cumulative gains and losses previously recognized in equity are recognized in profit or loss. The financial assets included in this category are reviewed at each balance sheet date to determine whether there is any indication of impairment. When a subsequent event causes the impairment loss on an available-for-sale debt security to decrease, the impairment loss is reversed through profit or loss. An impairment loss is reversed through the profit or loss if it can be objectively related to an event occurring after the impairment loss was recognized. However, any subsequent recovery in the fair value of an impaired available-for-sale equity security is recognized in equity.
The measurement principles noted above are not applicable when a specific financial asset is the hedged item in a hedging relationship, in which case the principles set out in note 1.6 apply.
Reclassification of non-derivative financial assets is permitted as follows:
i. Reclassification out of the held-for-trading category to the loans and receivable category, investments held to maturity category or available-for-sale category is permitted only in rare circumstances and the financial assets are no longer held for sale in the foreseeable future.
ii. Reclassification out of held-for-trading category to either loans and receivables, or available-for-sale is permitted only if the financial assets meet the definition of loans and receivables and there is the intention to hold them for the foreseeable future or until maturity.
iii. Reclassification out of available-for-sale category to the loans and receivables category, is permitted for financial assets that would have met the definition of loans and receivables and the entity has the intent to hold the financial asset for the foreseeable future or until maturity.
iv. Reclassification out of available-for-sale category to the held to maturity category, is permitted for financial assets that meet the relevant characteristics and the entity has the intent and ability to hold that financial asset until maturity.
Reclassification out of the held-to-maturity category to other categories is not permitted. Any sale or reclassification of a more than insignificant amount of held-to-maturity investment would result in the reclassification of all held-to-maturity investments as available-for-sale, and also this would result in a prevention from classifying securities as held-for-maturity for the current and the following two financial years. The Bank has reclassified certain financial assets which is analysed in notes 16 and 17.
The Bank derecognizes financial assets when:
In the case of transactions, where despite the transfer of the contractual right to recover the cash flows from financial assets, both the risk and rewards remain with the Bank no derecognition of these financial assets occurs. The amount received by the transfer is recognized as a financial liability. The accounting practises followed by the Bank in such transactions are discussed further in notes 1.19 and 1.20.
In the case of transactions, whereby the Bank neither maintains or transfers risks and rewards of the financial assets, but retains control they are recognized, to the extent if the Bank's continuing involvement. If the Bank does not retain control of assets then their derecognition occurs, and in their position, it recognizes, distinctively, the assets and liabilities which are created or retained during the transfer. No such transactions occurred upon balance sheet date.
Derivatives are financial instruments that upon inception have a minimal or zero value and subsequently change in accordance with a particular underlying instrument (foreign exchange, interest rate, index or other variable).
All derivatives are recognized as assets when their fair value is positive, and as liabilities when their fair value is negative.
Derivatives are entered into for either hedging or trading purposes and they are measured at fair value irrespective of the purpose for which they have been transacted.
In the cases when derivatives are embedded in other financial instruments, such as bonds, loans, deposits, borrowed funds etc and the host contract is not itself carried at fair value through profit or loss then they are accounted for as separate derivatives when the derivative is not closely related to the host contract. These embedded derivatives are measured at fair value and are recognized as derivative assets or liabilities.
In the cases where derivatives embedded in financial instruments have been designated at fair value through profit or loss, the changes in the fair value of the derivative is included in the fair value change of the combined instrument and recognized in gains less losses on financial transactions.
The Bank uses derivatives as a means of exercising asset-liability management within the guidelines established by the Asset-Liability Committee (ALCO).
In addition the Bank uses derivatives for trading purposes to exploit short-term market fluctuations, within the Bank risk level set by the Asset-Liability Committee (ALCO).
Valuation differences arising from these derivatives are recognized in gains less losses on financial transactions.
When the Bank uses derivatives for hedging purposes it ensures that appropriate documentation exists on inception of the transaction, and that the effectiveness of the hedge is monitored on an ongoing basis and the above are repeated at each balance sheet date.
We emphasize the following:
The Bank, in order to increase the return on deposits to selected customers, uses synthetic swaps.
This involves the conversion of a Euro deposit to JPY with a simultaneous forward purchase of JPY to cover the foreign exchange exposure.
The result arising from the forward foreign exchange is recognized as interest expense, foreign exchange differences and other gains less losses on financial transactions.
These types of swaps are entered into primarily to hedge the exposures arising from customer loans and deposits.
As there is no documentation to support hedge accounting they are accounted for as trading instruments.
The result arising from these derivatives is recognized as interest, foreign exchange differences, in order to match with the interest element resulting from the deposits and loans, and other gains less losses on financial transactions.
Hedge accounting establishes the valuation rules to offset the gain or loss of the fair value of a hedging instrument and a hedged item which would not have been possible if the normal measurement principles were applied.
Documentation of the hedge relationship upon inception and of the effectiveness of the hedge on a on-going basis are the basic requirements for the adoption of hedge accounting.
The hedge relationship is documented upon inception and the hedge effectiveness test is carried out upon inception and it is repeated at each reporting date.
A fair value hedge of a financial instrument offsets the change in the fair value of the hedged item in respect of the risks being hedged. Changes in the fair value of both the hedging instrument and the hedged item in respect of the specific risk being hedged are recognized in the income statement.
When the hedge relationship no longer exists, the hedged items are re-measured based on the classification and valuation principles set out in notes 1.5 and 1.15. Specifically any adjustment up to the point of hedge effectiveness relationship, to a hedged item for which the effective interest method is used, is amortized to interest income or expense as part of the recalculated effective interest rate of the item over its remaining life.
The Bank uses interest rate swaps (IRS's) to hedge risks relating to borrowings, bonds, loans and fixed rate term deposits. In addition the Bank uses foreign exchange derivatives to hedge foreign exchange risks arising from investments in subsidiaries.
A cash flow hedge changes the cash flows of a financial instrument from a variable rate to a fixed rate.
The effective portion of the gain or loss on the hedging instrument is recognized directly in equity, whereas the ineffective portion is recognized in profit or loss. The accounting treatment of the hedged item does not change.
There were no instances that would require cash flow hedge accounting.
The accounting for hedge of a net investment in a foreign operation is similar to cash flow hedge accounting. Upon disposal of the foreign operation or in cases where the hedge relationship no longer exists the cumulative gain or loss recognized in equity is reversed and recognized in profit or loss
Investments in subsidiaries, associates and joint ventures are carried at cost, plus any expenses directly attributable to the acquisition less impairment losses.
Dividends received relating to post-acquisition profits are recorded in the income statement, as dividend income.
Dividend income is recognized when the right to receive income is established, which is when the decision to this effect has been taken by the shareholders' general meeting.
Amounts received from accumulated earnings before the acquisition date are considered as a return of capital and reduces the cost of the investment.
This caption includes: land, buildings for use by the branches or for administrative purposes, additions and improvements of leased fixed assets and equipment.
Property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
Expenditure directly attributable to the acquisition of an asset is included as part of its cost.
Subsequent expenditure is recognized in the carrying amount of the item when it increases future economic benefits. Expenditure on repairs and maintenance is recognized in profit or loss as incurred.
Depreciation is recognized in profit or loss on a straight line basis over the estimated useful lives of property, plant and equipment.
The estimated useful lives are as follows:
Land is not depreciated.
Residual values of property and equipment and useful lives are reassessed and adjusted, if necessary, at each reporting date.
Property, plant and equipment are reviewed at each reporting date to determine whether there is an indication of impairment and if they are impaired the carrying amount is adjusted to its recoverable amount with the difference recorded in profit or loss.
Gains and losses from the sale of property and equipment are recognized in profit or loss.
The Bank includes in this category buildings or a portion of buildings together with the respective portion of the land that is held to earn rental income.
Investment property is measured at cost, which includes all expenditures directly attributable to the acquisition, less accumulated depreciation and impairment losses.
Expenditure on repairs and maintenance is recognized in profit or loss as incurred.
The estimated useful lives, over which depreciation is calculated using the straight line method, are the same as those applied to property, plant and equipment.
The Bank has included in this category:
a) Software, which is carried at cost less accumulated amortization. Amortization is charged over the estimated useful life, which the Bank has estimated between 3 to 4 years. Expenditure incurred to maintain software programs is recognized in the income statement as incurred.
b) Brand names and banking rights which are carried at cost less accumulated amortization. Amortization is charged over the estimated useful life, which the Bank has estimated at 5 years.
Intangible assets are measured at cost less accumulated amortization, excluding those with indefinite useful life, which are not amortized. All intangible assets are subject to an impairment test.
For intangible assets no residual value is estimated.
The Bank enters into leases either as a lessee or as a lessor.
When the risks and rewards incident to ownership of an asset are transferred to the lessee they are classified as finance leases.
All other lease agreements are classified as operating leases.
The accounting treatment followed depends on the classification of the lease, which is as follows:
For finance leases where the Bank is the lessor the aggregate amount of lease payments is recognized as loans and advances.
The difference between the present value (net investment) of lease payments, and the aggregate amount of lease payments, is recognized as unearned finance income and is deducted from loans and advances.
The lease rentals received decrease the aggregate amount of lease payments and finance income is recognized on an accrual basis.
The finance lease loans are subject to the same impairment testing as applied to customer loans and advances as described in note 1.12.
When the Bank is a lessor of assets under operating leases, the leased asset is recognized and depreciation is charged over its estimated useful life. Income arising from the leased asset is recognized as other income on an accrual basis.
For finance leases, where the Bank is the lessee, the leased asset is recognized as property, plant and equipment and a respective liability is recognized in other liabilities.
At the commencement of the lease the leased asset and liability are recognized at amounts equal to the fair value of leased property or, if lower, the present value of the minimum lease payments.
The discount rate used in calculating the present value of the minimum lease payments is the interest rate implicit in the lease or if this is not available the Bank's borrowing rate for similar financing.
Subsequent to initial recognition the leased assets are depreciated over their useful lives unless the duration of the lease is less than the useful life of the leased asset and the Bank is not expected to obtain ownership at the end of the lease, in which case the asset is depreciated over the term of the lease.
The lease payments are apportioned between the finance charge and the reduction of the outstanding liability.
For operating leases, the Bank as a lessee does not recognize the leased asset but charges in general administrative expenses, the lease payments on an accrual basis.
The Bank assess as at each balance sheet date, whether there is evidence of impairment in accordance with the general principles and methodology set out in IAS 39 and the relevant implementation guidance.
Specifically, the steps performed are the following:
The loans and advances with payment of interest or principal overdue by more than 90 days represents the majority of the loans which are tested for impairment.
In addition an impairment test may be performed for accounts with delays less than 90 days, or accounts with no delay when:
i. procedures for forced recovery and settlement of debts, with more burdensome conditions on the Bank, have been initiated or
ii. the Bank has information that indicates that the financial position of the borrower is deteriorating (reduced sales, gross margins, profit etc.) or other events (bankruptcy filing, extra-ordinary events such as floods, fire, etc at the installations of the borrower) which occurred after the date of initial recognition and which are considered to affect the ability of the borrower to adhere to the agreed repayment schedule.
Finally, an impairment test is performed on loans and advances granted to sectors of the economy or geographical regions which are experiencing problems that arose after the date of initial recognition of the loans.
The outstanding balance is the basic factor in determining whether the assessment of impairment will be performed on an individual basis or on a collective basis.
More specifically the separation point for the Bank is the amount of € 1 million
In determining the amount numerous factors are considered such as the composition of the loan portfolio, the specific circumstances of the market and experience obtained from the management of the portfolio.
In those instances whereby based on the amount outstanding the assessment of impairment is performed on a collective basis of assets with similar risk characteristics, with respect to credit risk, the collective groups were determined as follows:
i. buckets arising from ageing analysis of loans and advances to customers.
ii. the type of loan (consumer, credit cards, mortgage etc.) for retail loans.
Based on detailed internal data the above groups are either expanded or combined in the event that this is justified from the historical data.
The Bank has accumulated a significant amount of historical data of the last six years, which includes the loss given default for loans after the completion of forced recovery, or other measures taken to secure collection of loans, including the realization of collaterals
On the basis of this data the amount of the impairment is determined on both an individual and collective basis taking into account the time value of money.
The cash flows are discounted at the loans' original effective interest rate.
Interest income on impaired loans is recognized based on the carrying value of the loan net of impairment at the original effective interest rate.
Impaired loans are usually written-off, with the exception of a small number of accounts with large outstandings where an allowance account is established
If in a subsequent period after the recognition of the impairment loss, events occur which require the impairment loss to be reduced, or there has been a collection of amounts from loans and advances previously written-off, the recoveries are recognized in impairment losses and provisions to cover credit risk.
Deferred taxation is the tax that will be paid, or for which relief will be obtained in future periods from the different period that certain items are recognized for financial reporting purpose and for taxation purposes. Deferred tax is provided for temporary differences between the tax base of assets and liabilities and their respective carrying amounts in the financial statements.
Deferred tax assets and liabilities are calculated using the tax rates that are expected to apply when the temporary difference reverses, based on the tax rate (and laws) enacted at the balance sheet date.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.
Deferred tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity, in which case it is recognized in equity.
Non-current assets held for sale consist of assets acquired through the enforcement of security over customer loans and advances, and liabilities that are expected to be recovered primarily through sale
Before their classification as held for sale, the assets are remeasured in accordance with their respective accounting policy. Thereafter they are measured at the lower of their carrying amount and fair value less cost to sell.
Any loss arising from the above measurement is recorded in the profit or loss. This loss which can be reversed in the future, is allocated to assets in the disposal group that are within the scope of the measurement requirements of the Standard. The impairment loss on a disposal group first is allocated to goodwill and then to remaining assets and liabilities on a pro-rata basis.
Property in this category is not depreciated, however, it is reviewed for impairment at each reporting date.
Gains or losses from the sale of these assets are recognized in the income statement.
At initial recognition financial liabilities are measured at fair value, plus for financial liabilities which are not measured at fair value through profit or loss their value transaction costs that are directly attributable to the acquisition or issue.
The Bank for measurement purposes classifies financial liabilities in the following categories:
The Bank has included in the category of financial liabilities held for trading, derivatives which are not used for hedging purposes.
The derivatives and the liabilities arising from derivatives which are used for hedging purposes are presented in derivatives liabilities and valuation principles are set out in note 1.6.
At present no financial liabilities have been classified as fair value through profit or loss.
The liabilities which are classified in this category are measured at amortized cost using the effective interest method.
Liabilities to credit institutions and customers, debt securities in issue and other loan liabilities are classified in this category.
If financial liabilities included in this category are the hedged item in a hedge relationship the accounting principles applied are those set out in note 1.6.
The Bank derecognizes a financial liability (or part thereof) when its contractual obligations are discharged or cancelled or expire.
The difference between the book value of a financial liability that has been repaid or transferred and the consideration paid is recognized in the financial results.
The Bank has both defined benefit and defined contribution plans. A defined benefit plan is a pension plan that defines an amount of pension benefit that an employee will receive on retirement which is dependent, among others, on years of service and salary on date of retirement and it is guaranteed by the Bank.
A defined contribution plan is where the Bank pays fixed contributions into a separate entity.
The Bank has no legal or constructive obligation to pay further contributions if the fund does not have sufficient assets to pay all employees the benefits relating to employee service in current or prior years.
The liability recognized in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the balance sheet date less the fair value of plan assets together with adjustments for unrecognized actuarial gains or losses and past service costs.
The amount resulting from the above method may be negative i.e.an asset. The recognized asset is limited to the net total of:
The defined benefit obligation is calculated annually based on actuarial valuation performed by independent actuaries using the projected unit credit method.
The present value of the defined benefit is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have terms to maturity approximating to the terms of the related pension liability.
Cumulative actuarial gains and losses arising from experience adjustments and changes, and actuarial assumption variations to the extent that they exceed 10 per cent of the greater of the accrued obligation or the fair value of plan assets are amortized over the period equal to the average remaining working lives of the employees.
Past-service costs are recognized immediately in the income statement, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time (the vesting period). In the second case, the past service costs are amortized on a straight line basis over the vesting period.
For defined contribution plans, the Bank pays contributions to publicly or privately administered pension insurance plans, to insurance companies and other funds on a mandatory or voluntary basis. The Bank has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense on an accrual basis. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the future payments is available.
The Bank rewards the performance of its executives and managers by granting share options. The number of granted share options, the price and the exercise date are decided from the Board of Directors in accordance to Shareholders' Meeting approvals.
The fair value calculated at grant date, is recognized over the period from the grant date and exercise date and recorded as an expense in payroll and related costs with an increase of a reserve in equity respectively. The amount paid by the beneficiaries of share options on the exercise date increases the share capital of the Bank and the reserve in equity from previously recognized fair value of the exercised options is transferred to share premium.
A provision is recognized if as a result of a past event, the Bank has a present legal or constructive obligation that can be estimated reliably, and it is probable an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future cash flows. The discount rate applied reflects current market assessments of the time value of money required to settle the obligation. Cash payments are recorded to provisions to the extent that they relate to the specific provision. At each reporting period provisions are re-assessed.
Provisions are not recognized for future operating losses.
Future events that may affect the amount required to settle the obligation, for which a provision has been recognized, are taken into account when sufficient objective evidence exists that they will occur.
Reimbursements from third parties relating to a portion of or all of the estimated cash outflow are recognized as assets, only when it is virtually certain that they will be received. The expense recognized in the profit or loss relating to the provision may be presented net of the amount of the reimbursement.
The Bank enters into purchases of securities under agreements to resell at a certain date in the future at a fixed price. Securities purchased subject to commitments to resell them at future dates are not recognized as investments.
The amounts paid are recognized in loans and advances to either banks or customers. The difference between the purchase price and the resale price is recognized as interest on an accrual basis.
Securities that are sold under agreements to repurchase continue to be recognized in the balance sheet and are measured in accordance with accounting policy of the category that they have been classified and are presented as investments.
The proceeds from the sale of the securities are reported as liabilities to either banks or customers. The difference between the sales price and the repurchase price is recognized on an accrual basis as interest.
Securities borrowed under securities lending agreements are not recognized except when they have been sold to third parties whereby the liability to deliver the security is recognized and measured at fair value.
The Bank securitized financial assets, by transferring these assets to special purpose entities, which in turn issue bonds.
In each securitization of financial assets the Bank considers, the contractual terms and the economic substance of transactions are considered, in order to decide whether the Bank should proceed with the derecognition of the securitized assets, as reffered in note 1.5.
Incremental costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax, from the proceeds.
The difference between the nominal value of the shares issued and their market value, in cases of the exchange of shares as consideration for the acquisition of a business by the Bank is recorded as share premium.
This also includes the difference between the nominal value of the shares and the cost consideration received in the case of a share capital increase.
The cost of acquiring treasury shares is recognized as a reduction of equity. Subsequent gains or losses from the sale of treasury shares, after deducting all direct costs and taxes, is recognized directly in retained earnings.
Dividends are deducted from retained earnings and recorded as a liability in the period that the dividend is approved by the shareholders in general meeting.
Interest income and expense is recognized in the income statement for all instruments measured at amortized cost.
The recognition of interest income and expense is performed on the accrual basis using the effective interest rate method.
The effective interest rate method is a method of calculating the amortized cost of a financial asset or a financial liability and of allocating the interest income or interest expense over the relevant period.
The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument or the next repricing date, in order the present value of the future cash flows to be equal to the carrying amount of the financial instrument including fees or transaction costs.
Interest on financial assets that are impaired is determined on the balance after the impairment provision using the effective interest rate.
Interest income and expense is also calculated for interest bearing financial instruments that are measured at fair value.
Fee and commission income are recognized on a accrual basis when the relevant service has been provided.
Transaction revenues relating to the recognition of a financial instrument which measured at amortized cost, such as loans and advances, are capitalized and recognized in the income statement using the effective interest method.
To the extent considered necessary the comparatives have been adjusted to facilitate changes in presentation of the current year amounts.
| Interest and similar income | From 1 January to | |||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | |||
| Due from banks | 352,575 | 367,698 | ||
| Due from customers | 2,640,178 | 2,194,124 | ||
| Securitized loans | 74,635 | |||
| Financial assets at fair value through profit or loss | 7,325 | 10,377 | ||
| Available-for-sale securities | 360,300 | 220,564 | ||
| Securities held for trading | 46,021 | |||
| Derivative financial instruments | 636,023 | 313,538 | ||
| Other | 1,904 | 544 | ||
| Total | 4,118,961 | 3,106,845 | ||
| Interest expense and similar charges | ||||
| Due to banks | (303,782) | (199,028) | ||
| Due to customers | (717,206) | (424,464) | ||
| Debt securities in issue | (1,026,605) | (855,391) | ||
| Derivative financial instruments | (622,728) | (310,620) | ||
| Other | (98,134) | (89,684) | ||
| Total | (2,768,455) | (1,879,187) | ||
| Net interest income | 1,350,506 | 1,227,658 |
| From 1 January to | ||||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | |||
| Loans | 61,092 | 60,149 | ||
| Letters of guarantee | 34,235 | 30,899 | ||
| Imports – Exports | 14,591 | 16,033 | ||
| Credit Cards | 75,142 | 49,900 | ||
| Fund transfers | 55,404 | 58,337 | ||
| Mutual funds | 33,484 | 47,141 | ||
| Advisory fees and securities transactions fees | 6,565 | 6,232 | ||
| Other | 36,563 | 53,228 | ||
| Total | 317,076 | 321,919 |
| From 1 January to | ||||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | |||
| Subsidiaries and associates | 72,908 | 43,924 | ||
| Available-for-sale securities | 2,029 | 1,538 | ||
| Total | 74,937 | 45,462 |
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Foreign exchange differences | 19,660 | 43,634 | |
| Securities held for trading: | |||
| - Bonds | (11,258) | (1,290) | |
| - Shares | 3,030 | ||
| Available-for-sale securities: | |||
| - Bonds | 5,649 | (135,907) | |
| - Shares | (31,150) | 9,283 | |
| - Mutual funds | (25,156) | 9,172 | |
| Held-to-maturity investment: | |||
| - Bonds | (1,680) | ||
| Investments | 84,059 | (1,408) | |
| Derivative financial instruments | (68,616) | 29,060 | |
| Other financial instruments | 7,908 | 1,593 | |
| Total | (20,584) | (42,833) |
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Rental income | 3,896 | 3,397 | |
| Sale of property, plant and equipment | 7,360 | 16,770 | |
| Insurance indemnities | 345 | 238 | |
| Secondment of personnel to group companies | 2,110 | 2,445 | |
| Preparation of business plans and financial studies | 2,197 | 6,237 | |
| Other | 5,230 | 5,791 | |
| Total | 21,138 | 34,878 |
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Wages and salaries | 289,888 | 277,483 | |
| Social Security contributions | 71,415 | 66,205 | |
| E.T.A.T. | 20,417 | ||
| Employee defined benefit obligation (note 29) | (725) | 11,198 | |
| Other | 48,218 | 31,808 | |
| Total | 429,213 | 386,694 |
The total employees of the Bank as at 31.12.2008 were 8,903 (31.12.2007: 7,963) of which 7,558 (31.12.2007: 6,960) are employed in Greece and 1.345 (31.12.2007: 733) are employed abroad.
All the employees of the Bank receive their main pension from the Social Insurance Fund (IKA).
a) The supplementary pension plan for employees of the former Ionian and Popular Bank of Greece is TAPILTAT, a multiemployer plan. The Bank has obtained legal opinions that indicate that it has no obligation if the fund does not have sufficient assets to pay employee benefits. Therefore the Bank considers that the fund is a defined contribution plan and it is accounted for as such. The Bank has applied for membership in ETAT (Common Insurance Fund of Bank Employees) for it's employees who are insured in TAPILTAT (Pension Plan for employees of Ionian – Popular Bank and other Banks).
b) All employees of the Bank receive medical benefits from the Bank Employee and Companies Common Benefit Plan (TAYTEKO). This plan has been accounted for as a defined contribution plan.
An analysis of liabilities arising from defined benefit plans are set out in note 29.
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Rent of buildings | 35,208 | 27,407 | |
| Rent and maintenance of EDP equipment | 19,858 | 17,295 | |
| EDP expenses | 42,806 | 36,988 | |
| Marketing and advertisement expenses | 38,256 | 35,434 | |
| Telecommunications and postage | 30,466 | 23,963 | |
| Third party fees | 29,825 | 23,105 | |
| Consultants fees | 8,043 | 7,371 | |
| Contribution to Deposit Guarantee Fund | 13,482 | 11,193 | |
| Insurance | 5,781 | 6,740 | |
| Consumables | 7,511 | 6,841 | |
| Electricity | 6,871 | 5,480 | |
| Taxes (VAT, real estate etc) | 41,885 | 35,487 | |
| Repairs of buildings and equipment | 5,643 | 4,245 | |
| Cleaning fees | 3,425 | 2,612 | |
| Security | 8,694 | 7,075 | |
| Transportation | 3,875 | 3,741 | |
| Agency fees | 7,273 | 4,637 | |
| Other | 53,509 | 78,876 | |
| Total | 362,411 | 338,490 |
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Impairment losses on loans and advances to customers | 548,662 | 172,264 | |
| Impairment loss of participation | 5,100 | ||
| Provisions to cover credit risk relating to off balance sheet items | (41,729) | 30,983 | |
| Recoveries | (16,651) | (8,660) | |
| Total | 495,382 | 194,587 |
The severe aggravation of credit turmoil during the third quarter of 2008 and its gradual transfer to real economy represents a significant indication of loan impairment.
Despite the fact that there are not as yet any signs that the credit turmoil has affected the repayment of loans, the Bank reassessed the potential impairment loss, which as a percentage of loans amounts for 2008 to 1.24% compared to 0.53% as of 2007.
In accordance with Greek tax law the profits of entities in Greece are taxed at a rate of 25% for fiscal year 2007 and thereafter. According to Law 3697/08 the tax rate is reduced by one percent each year starting from 2010 until the rate reaches 20% in 2014 and thereafter.
In accordance with article 26 of Law 3634/2008 income tax is imposed for the fiscal year 2007, at the current tax rate (25%), on profits which previously were not subject to tax until distributed or capitalized (interest on Greek government bonds, gains from the sale of listed shares etc.). Only dividend income is not subject to tax since it has been already taxed at the corporate level for the fiscal years 2007 and 2008.
It should be noted, that in accordance with Law 3697/08, dividends approved by the general shareholders meetings after 1.1.2009 are subject to a withholding tax of 10% with no further tax obligation for the beneficiary.
The income tax expense is analysed as follows:
| From 1 January to | |||
|---|---|---|---|
| 31.12.2008 | 31.12.2007 | ||
| Current tax | 75,727 | 108,373 | |
| Deferred tax | (14,562) | 48,262 | |
| Total | 61,165 | 156,635 |
Under the provisions of Law 3697/2008 concerning the gradual reduction of tax rates between the years 2010 to 2014, the Bank performed a recalculation of deferred taxes under the new tax rates. The effect was recorded in the financial statements.
Deferred tax recognized in the income statement is attributable to the following temporary differences:
| From 1 January to | ||
|---|---|---|
| 31.12.2008 | 31.12.2007 | |
| Depreciation and fixed asset write-offs | 5,325 | 7,141 |
| Fixed assets revaluation | (870) | - |
| Valuation of loans | 71,142 | (6,829) |
| Suspension of interest accruals | 23,108 | 29,175 |
| Loans impairment | (48,439) | 12,012 |
| Employee defined benefit obligations | 17,352 | 15,310 |
| Liabilities to E.T.A.T. (Common Insurance Fund of Bank Employees) | 11,716 | |
| Valuation of derivatives | (86,335) | (5,496) |
| Effective interest rate | 14,757 | 4,534 |
| Valuation of liabilities to credit institutions and other borrowed funds due to fair value hedge | (10,120) | 9,887 |
| Valuation of investments in subsidiaries due to hedging | 547 | (2,976) |
| Valuation of securities | (7,951) | |
| Valuation of bonds | (1,862) | 1,838 |
| Other temporary differences | (2,932) | (16,334) |
| Total | (14,562) | 48,262 |
The temporary differences attributable to the valuation of investments, bonds and other securities are due to the tax imposed according to Law 3634/2008.
Reconciliation of effective and nominal tax rate
| From 1 January to | ||||
|---|---|---|---|---|
| 31.12.2008 | 31.12.2007 | |||
| % | % | |||
| Profit before income tax | 395,403 | 613,641 | ||
| Income tax (nominal tax rate) | 25 | 98,851 | 25 | 153,410 |
| Increase/(decrease) due to: | ||||
| Additional tax on income of fixed assets | 0.09 | 339 | 0.03 | 183 |
| Non taxable income | (9.84) | (38,881) | (1.89) | (11,572) |
| Non deductible expenses | 2.86 | 11,297 | 1.12 | 6,894 |
| Effect of tax rates used for deferred tax | (0.53) | (2,080) | ||
| Other temporary differences | (2.11) | (8,361) | 1.27 | 7,720 |
| Income tax | ||||
| (effective tax rate) | 15.47 | 61,165 | 25.53 | 156,635 |
Basic earnings per share is calculated by dividing the profit after tax for the period by the weighted average number of ordinary shares outstanding, after deducting the weighted average number of treasury shares held, during the period.
| From 1 January to | ||
|---|---|---|
| 31.12.2008 | 31.12.2007 | |
| Profit attributable to shareholders | 334,238 | 457,006 |
| Weighted average number of outstanding ordinary shares | 405,624,439 | 405,512,713 |
| Basic earnings per share (in €) | 0.82 | 1.13 |
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares.
The Bank had a single category of dilutive potential ordinary shares resulting from a share options program granted to executives and managers of the Bank exercised during 2007.
For the share options, a calculation is performed to determine the number of shares that could have been acquired at fair value (determined as the average market share price of the Bank's shares for the period) based on the monetary value of the subscription rights attached to outstanding share options. Upon the issuance of new ordinary shares resulting from share options exercise, the shares are included in the calculation of basic and dilutive earnings per share.
The weighted average number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.
| From 1 January to | ||
|---|---|---|
| 31.12.2008 | 31.12.2007 | |
| Profit attributable to shareholders | 334,238 | 457,006 |
| Weighted average number of outstanding ordinary shares | 405,624,439 | 405,512,713 |
| Adjustment for share options | 727,195 | |
| Weighted average number of outstanding ordinary shares for diluted earnings per share | 405,624,439 | 406,239,908 |
| Diluted earnings per share (in €) | 0.82 | 1.12 |
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Cash | 329,269 | 324,234 |
| Cheques receivable | 88,672 | 52,546 |
| Balances with Central Banks | 1,306,140 | 1,273,547 |
| Total | 1,724,081 | 1,650,327 |
| Less: Deposits pledged with Central Banks | (703,202) | (564,505) |
| Balance | 1,020,879 | 1,085,822 |
The Bank is required to maintain a current account with the Bank of Greece (Central Bank) in order to facilitate interbank transactions with the Central Bank and other financial institutions through the Trans European – Automated Real Time Gross Settlement Express Transfer System (TARGET).
The Bank of Greece also requires, that all financial institutions established in Greece maintain reserve deposits with the Central Bank equal to 2% of customer deposits.
These deposits bear interest at the refinancing rate as set by the European Central Bank which as at 31.12.2008 was 2.50% (31.12.2007: 4.18%).
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Cash and balances with Central Banks | 1,020,879 | 1,085,822 |
| Sale and repurchase agreements (Reverse Repos) | 483,851 | |
| Short-term placements with other banks | 3,034,394 | 3,271,106 |
| Total | 4,539,124 | 4,356,928 |
| 13. Due from banks |
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Placements with other banks | 7,550,750 | 6,679,979 |
| Sale and repurchase agreements (Reverse Repos) | 483,851 | |
| Loans to financial institutions | 386,192 | 669,696 |
| Total | 8,420,793 | 7,349,675 |
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Government bonds | 73,936 | 236,340 |
| Other debt securities: | ||
| - Listed | 12,511 | 28,178 |
| - Non-listed | 433 | 270 |
| Total | 86,880 | 264,788 |
| 31 December 2008 | |||
|---|---|---|---|
| Contract nominal | Fair value | ||
| amount | Assets | Liabilities | |
| Derivatives held for trading | |||
| a. Foreign exchange derivatives | |||
| Currency forwards | 2,419,581 | 101,913 | 97,976 |
| Currency swaps | 3,755,931 | 56,891 | 92,592 |
| Cross currency swaps | 380,931 | 54,369 | 7,850 |
| Currency options | 151,341 | 2,246 | 2,207 |
| Currency options embedded in customer products | 4,083 | 59 | |
| Total non-listed | 6,711,867 | 215,478 | 200,625 |
| b. Interest rate derivatives | |||
| Interest rate swaps | 15,069,590 | 210,508 | 264,991 |
| Interest rate options (caps) | 810,214 | 4,057 | 3,268 |
| Total non-listed | 15,879,804 | 214,565 | 268,259 |
| Options | 20,000 | 30 | |
| Total listed c. Commodity derivatives |
20,000 | 30 | |
| Commodity swaps | 5,078 | 2,942 | 2,933 |
| Total non-listed | 5,078 | 2,942 | 2,933 |
| d. Index derivatives | |||
| Otc options | 10,000 | 423 | |
| Total non-listed | 10,000 | 423 | |
| Futures | 595 | 9 | |
| Listed options | 6,284 | 34 | |
| Total listed | 6,879 | 43 | |
| e. Credit derivatives | |||
| Credit default swaps embedded in debt securities | 304,445 | 45,521 | |
| Total non-listed | 304,445 | 45,521 | |
| Derivatives for hedging a. Foreign exchange derivatives |
|||
| Currency swaps | 89,522 | 5,882 | 1,696 |
| Cross currency swaps | 237,831 | 21,865 | |
| Total non-listed | 327,353 | 27,747 | 1,696 |
| b. Interest rate derivatives | |||
| Interest rate swaps | 3,124,810 | 24,616 | 285,138 |
| Total non-listed | 3,124,810 | 24,616 | 285,138 |
| c. Index derivatives | |||
| Index swaps | 30,998 | 8,542 | |
| Total non-listed | 30,998 | 8,542 | |
| Grand total | 26,421,234 | 494,386 | 804,172 |
31 December 2007
| Fair value | |||
|---|---|---|---|
| Contract nominal amount |
Assets | Liabilities | |
| Derivatives held for trading | |||
| a. Foreign exchange derivatives | |||
| Currency forwards | 1,149,379 | 12,635 | 9,563 |
| Currency swaps | 3,148,553 | 40,986 | 43,648 |
| Cross currency swaps | 555,968 | 63,655 | 40,104 |
| Currency options | 175,822 | 3,438 | 3,261 |
| Currency options embedded in customer products | 631 | 1 | |
| Total non-listed | 5,030,353 | 120,715 | 96,576 |
| b. Interest rate derivatives | |||
| Interest rate swaps | 8,262,962 | 161,194 | 136,648 |
| Interest rate options (caps) | 616,963 | 2,233 | 1,388 |
| Total non-listed | 8,879,925 | 163,427 | 138,036 |
| Futures | 354,305 | 99 | 28 |
| Options | 6,300 | 32 | |
| Total listed | 360,605 | 131 | 28 |
| c. Commodity derivatives | |||
| Commodity swaps | 14,410 | 138 | 124 |
| Total non-listed | 14,410 | 138 | 124 |
| d. Index derivatives | |||
| Futures | 202 | 1 | |
| Options | 383 | 4 | |
| Total listed | 585 | 4 | 1 |
| Derivatives for hedging | |||
| a. Foreign exchange derivatives | |||
| Currency swaps | 95,849 | 7,935 | |
| Cross currency swaps | 181,895 | 46,258 | |
| Total non-listed | 277,744 | 7,935 | 46,258 |
| b. Interest rate derivatives | |||
| Interest rate swaps | 4,083,070 | 92,116 | 102,106 |
| Total non-listed | 4,083,070 | 92,116 | 102,106 |
| Grand Total | 18,646,692 | 384,466 | 383,129 |
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Individuals: | ||
| Mortgages: | ||
| - Non-Securitized | 8,461,267 | 9,741,095 |
| - Securitized | 2,715,262 | |
| Consumer: | ||
| - Non-Securitized | 2,109,934 | 2,922,529 |
| - Securitized | 1,485,842 | |
| Credit cards | 1,229,778 | 1,046,941 |
| Other | 96,770 | 100,031 |
| Total | 16,098,853 | 13,810,596 |
| Companies: | ||
| Corporate loans (1) | 26,615,726 | 21,900,097 |
| Other receivables | 488,845 | 166,342 |
| 43,203,424 | 35,877,035 | |
| Less: Allowance for impairment losses (2) |
(1,014,146) | (609,161) |
| Total | 42,189,278 | 35,267,874 |
| Allowance for impairment losses | ||
| Balance 1.1.2007 | 739,327 | |
| Foreign exchange differences | (163) | |
| Impairment losses for the period (note 9) | 172,264 | |
| Change in present value of impairment reserve | 38,700 | |
| Loans written-off during the period | (340,967) | |
| Balance 31.12.2007 | 609,161 | |
| Foreign exchange differences | 18 | |
| Impairment losses for the period (note 9) | 548,662 | |
| Change in present value of impairment reserve | 50,241 | |
| Loans written-off during the period | (193,936) |
Balance 31.12.2008 1,014,146
The Bank securitized mortgage and consumer loans through special purpose entities. The Bank retains all risks of these loans as it has issued a guarantee to the holders of the bonds issued in the securitization.
(1) In accordance with amendments to IAS 39, the Bank reclassified securities of €16.8 million from the available-for-sale portfolio to the loans portfolio. These securities are not traded in an active market and the Bank has the intention to hold them in the foreseeable future. The above securities are included in corporate loans and are impaired by € 13.4 million.
(2) In addition to the allowance for impairment losses, an additional provision of € 4,200 (31.12.2007: €45,929) has been recorded to cover credit risk relating to off-balance sheet items (note 31). The total provision recorded to cover credit risk amounts to €1,018,346 (31.12.2007: €655,090).
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Government bonds | 239,757 | 1,856,217 |
| Other debt securities: | ||
| - Listed | 5,530,410 | 4,310,379 |
| - Non-listed | 195,062 | 34,269 |
| Shares: | ||
| - Listed | 37,920 | 62,672 |
| - Non-listed | 4,408 | 6,172 |
| Other variable yield securities | 26,340 | 30,668 |
| Total | 6,033,897 | 6,300,377 |
| b. Held to maturity |
| 31.12.2008 | ||
|---|---|---|
| Cost | Fair value | |
| Government bonds | 1,805,579 | 1,697,446 |
| Other debt securities | ||
| - Listed | 2,558,601 | 2,144,857 |
| - Non listed | 124,529 | 121,637 |
| Total | 4,488,709 | 3,963,940 |
The held-to-maturity portfolio includes bonds amounting to €1.1 billion, which up to 30.6.2008 were classified as "Available-forsale".
The reclassification of these bonds was performed at their fair value as at 30.6.2008, which became their new amortized cost on the basis of which the effective interest rate method was used to allocate the interest income thereafter. At that date the fair value of these bonds was €63.3 million less than their carrying amount. This difference, already recognized in equity, will be amortized to interest income over the remaining period to maturity of the bonds.
Had the above mentioned bonds not been reclassified from the available-for-sale portfolio, their fair value would have been lower than the carrying amount by an additional amount of €217 million.
| From 1 Jnauary to | ||
|---|---|---|
| 31.12.2008 | 31.12.2007 | |
| Subsidiaries | ||
| Opening balance | 1,625,309 | 1,587,804 |
| Additions (1) | 231,114 | 52,634 |
| Disposals (2) | (116,067) | (1,117) |
| Valuation of investments due to fair value hedge (3) | (239) | (14,012) |
| Closing balance | 1,740,117 | 1,625,309 |
| Associates | ||
| Opening balance | 74 | 5,624 |
| Additions | 20 | |
| Disposals | (5,570) | |
| Closing balance | 74 | 74 |
| Joint Ventures | ||
| Opening balance | 717 | 122 |
| Additions (4) | 10,008 | 615 |
| Disposals | (14) | (20) |
| Closing balance | 10,711 | 717 |
| Grand Total | 1,750,902 | 1,626,100 |
Additions represent: Share purchases, participation in share capital increases and acquisitions of shares from mergers.
Disposals represent: Sales of shares, return of capital, proceeds arising from the liquidiation of companies, contributions in kind and impairments.
| Balance 1.1 - 31.12.2008 | 1.1 - 31.12.2008 | ||||||
|---|---|---|---|---|---|---|---|
| Company | Country of incorporation |
Profit/ (loss) | Bank's Ownership |
||||
| Assets | Equity | Liabilities | Turnover | before taxes | interest % | ||
| Banks 1. Alpha Bank London Ltd |
United Kingdom | 681,008 | 68,729 | 612,279 | 42,732 | 2,031 | 100.00 |
| 2. Alpha Bank Cyprus Ltd | Cyrpus | ||||||
| 3. Alpha Bank Romania S.A. | Romania | 6,921,357 | 407,925 | 6,513,432 | 369,506 | 102,144 | 100.00 |
| 4. Alpha Bank AD Skopje | 4,340,320 | 262,931 | 4,077,389 | 520,960 | 43,068 | 99.44 | |
| FYROM | 191,445 | 25,800 | 165,645 | 13,490 | (1,792) | 100.00 | |
| 5. Alpha Bank Srbija A.D. | Serbia | 648,828 | 167,990 | 480,838 | 566,234 | 9,993 | 100.00 |
| 6. Astra Bank OJSC Leasing companies |
Ukraine | 143,840 | 94,589 | 49,251 | 13,650 | 1,743 | 93.33 |
| 1. Alpha Leasing A.E. | Greece | 1,275,915 | 286,083 | 989,832 | 88,537 | 21,080 | 100.00 |
| 2. Alpha Leasing Romania S.A. | Romania | 138,703 | 12,400 | 126,303 | 36,064 | 249 | 62.94 |
| 3. ABC Factors A.E. | Greece | 545,646 | 77,659 | 467,987 | 37,576 | 12,040 | 100.00 |
| Investment Banking 1. Alpha Finance A.E.Π.Ε.Υ. |
|||||||
| Greece | 80,628 | 55,734 | 24,894 | 43,158 | 15,408 | 99.62 | |
| 2. Alpha Finance US Corporation | USA | 1,208 | 1,101 | 107 | 629 | (445) | 100.00 |
| 3. Alpha Finance Romania S.A. | Romania | 3,092 | 1,023 | 2,069 | 1,287 | (396) | 45.68 |
| 4. Alpha Ventures A.E. | Greece | 27,903 | 27,490 | 413 | 1,931 | 1,026 | 99.42 |
| Asset Management 1. Alpha Asset Management Α.Ε.D.Α.Κ. |
|||||||
| 2. Alpha Private Investment Services | Greece | 41,201 | 36,264 | 4,937 | 46,268 | 10,648 | 85.21 |
| A.E.P.E.Y. | Greece | 11,760 | 9,916 | 1,844 | 7,812 | (1,724) | 99.00 |
| Insurance | |||||||
| 1. Alpha Insurance Agents A.E. | Greece | 8,767 | 7,723 | 1,044 | 9,261 | 9,174 | 100.00 |
| 2. Alpha Insurance Cyprus Ltd | Cyprus | 52,699 | 10,083 | 42,616 | 31,473 | 2,349 | 17.95 |
| 3. ALPHALIFE A.A.E.Z. | Greece | 5,996 | 5,992 | 4 | 89 | (10) | 99.90 |
| Special purpose and holding entities | |||||||
| 1. Alpha Credit Group Plc | United Kingdom | 17,462,851 | 18,834 | 17,444,017 | 1,032,386 | 23,733 | 100.00 |
| 2. Alpha Group Jersey Ltd | Jersey | 1,064,379 | 381 | 1,063,998 | 65,572 | 196 | 100.00 |
| 3. Alpha Group Investment Ltd | Cyprus | 272,478 | 272,018 | 460 | 11,023 | 10,995 | 100.00 |
| 4. Ionian Holdings Α.Ε. | Greece | 362,793 | 361,364 | 1,429 | 16,734 | 16,639 | 100.00 |
| 5. Messana Holdings S.A. | Luxembourg | 68 | 62 | 6 | 19 | 3 | 99.00 |
| 6. Ionian Equity Participations Ltd | Cyprus | 31,003 | 27,612 | 3,391 | 80 | 56 | 100.00 |
| 7. Alpha Covered Bonds Plc | United Kingdom | 17 | 17 | 100.00 | |||
| Other companies | |||||||
| 1. Oceanos Α.Τ.Ο.Ε.Ε. | Greece | 19,919 | 19,503 | 416 | 1,603 | 1,102 | 100.00 |
| 2. Evremethea Α.Ε. | Greece | 1,212 | 303 | 909 | 32 | (58) | 100.00 |
| 7. Kafe Alpha Α.Ε. | Greece | 235 | 146 | 89 | 264 | 37 | 99.00 |
| 8. Ionian Supporting Services Α.Ε. | Greece | 34,462 | (2,914) | 37,376 | (4,075) | 99.00 | |
| B. ASSOCIATES | |||||||
| 1. EVISAK Α.Ε. | Greece | 3,345 | 27.00 | ||||
| 2. AEDEP Thessalias and Stereas Ellados | Greece | 147 | 50.00 | ||||
| C. JOINT VENTURES | |||||||
| 1. Cardlink A.E | Greece | 500 | 160 | 340 | 970 | (132) | 50.00 |
| 2. APE Fixed Assets A.E. | Greece | 45,844 | 311 | 45,532 | 2 | (2,512) | 60.10 |
| 3. APE Commercial Property A.E. | Greece | 71,212 | 154 | 71,058 | 24 | (3,501) | 72.20 |
| 4. APE Investment Property S.A. | |||||||
| Greece | 252,367 | (4,804) | 257,171 | 24,110 | (8,828) | 67.42 | |
| 5. Alpha TANEO A.K.E.S. | Greece | 5,410 | 5,396 | 14 | 149 | (604) | 51.00 |
| Land and Buildings | |
|---|---|
| Balance 1.1.2007 | |
| Cost | 48,449 |
| Accumulated depreciation | (6,443) |
| Net book value 1.1.2007 | 42,006 |
| 1.1.2007 – 31.12.2007 | |
| Net book value 1.1.2007 | 42,006 |
| Additions | 770 |
| Depreciation charge for the period | (406) |
| Net book value 31.12.2007 | 42,370 |
| Balance 31.12.2007 | |
| Cost | 49,219 |
| Accumulated depreciation | (6,849) |
| 1.1.2008 - 31.12.2008 | |
| Net book value 1.1.2008 | 42,370 |
| Additions | 519 |
| Reclassification to "Property, plant and equipment" | (274) |
| a) Cost | (425) |
| b) Accumulated depreciation | 151 |
| Depreciation charge for the period | (420) |
| Net book value 31.12.2008 Balance 31.12.2008 |
42,195 |
| Cost | 49,313 |
| Accumulated depreciation | (7,118) |
The fair value of investment property, as determined by Alpha Astika Akinita A.E. at 31.12.2008 was €43.592.
| Land and | Leased | |||
|---|---|---|---|---|
| Buildings | equipment | Equipment | Total | |
| Balance την 1.1.2007 | ||||
| Cost | 663,951 | 1,142 | 269,300 | 934,393 |
| Accumulated depreciation | (166,618) | (942) | (222,197) | (389,757) |
| Net book value 1.1.2007 | 497,333 | 200 | 47,103 | 544,636 |
| 1.1.2007 - 31.12.2007 | ||||
| Net book value 1.1.2007 | 497,333 | 200 | 47,103 | 544,636 |
| Additions | 32,462 | 21,926 | 54,388 | |
| Foreign exchange differences | 42 | 12 | 54 | |
| a) Cost | 62 | 40 | 102 | |
| b) Αccumulated depreciation | (20) | (28) | (48) | |
| Disposals | (4,592) | (111) | (4,703) | |
| a) Cost | (7,517) | (1,551) | (9,068) | |
| b) Αccumulated depreciation | 2,925 | 1,440 | 4,365 | |
| Reclassification from "Non-current assets held for sale" (1) | 42,405 | 42,405 | ||
| a) Cost | 43,298 | 43,298 | ||
| b) Αccumulated depreciation | (893) | (893) | ||
| Depreciation charge for the period | (15,640) | (120) | (17,189) | (32,949) |
| Net book value 31.12.2007 | 552,010 | 80 | 51,741 | 603,831 |
| Balance 31.12.2007 | ||||
| Cost | 732,256 | 1,142 | 289,715 | 1,023,113 |
| Accumulated depreciation | (180,246) | (1,062) | (237,974) | (419,282) |
| 1.1.2008 - 31.12.2008 | ||||
| Net book value 1.1.2008 | 552,010 | 80 | 51,741 | 603,831 |
| Additions | 49,677 | 31,339 | 81,016 | |
| Foreign exchange differences | (49) | (23) | (72) | |
| a) Cost | (73) | (61) | (134) | |
| b) Accumulated depreciation | 24 | 38 | 62 | |
| Disposals | (220) | (401) | (621) | |
| a) Cost | (770) | (3,282) | (4,052) | |
| b) Accumulated depreciation | 550 | 2,881 | 3,431 | |
| Reclassification from "Investment property " | 281 | 281 | ||
| a) Cost | 433 | 433 | ||
| b) Accumulated depreciation | (152) | (152) | ||
| Reclassification | (60) | 50 | (10) | |
| a) Cost | (1,142) | 1,132 | (10) | |
| b) Accumulated depreciation | 1,082 | (1,082) | ||
| Depreciation charge for the period | (15,163) | (20) | (19,790) | (34,973) |
| Net book value 31.12.2008 | 586,536 | 62,916 | 649,452 | |
| Balance 31.12.2008 | ||||
| Cost | 781,523 | 318,843 | 1,100,366 | |
| Accumulated depreciation | (194,987) | (255,927) | (450,914) |
The value of land and buildings as of 31.12.2008 amounted to € 514,276. The fair value of these assets as determined by Alpha Astika Akinita A.E. at 31-12-2008 was €546.375.
(1) During 2007 property, plant and equipment amounting to € 42.4 million was reclassified from «Non-current assets held for sale» due to Bank's decision for own use. The depreciation for the respective period that the specific Property, plant and equipment was classified as "Non-current assets held for sale" amounts to € 2.2 million and it was charged to the profit and loss account in 2007.
| Software | Banking righs | Total | |
|---|---|---|---|
| Balance 1.1.2007 | |||
| Cost | 126,671 | 126,671 | |
| Accumulated amortization | (84,567) | (84,567) | |
| Net book value 1.1.2007 | 42,104 | 42,104 | |
| 1.1.2007 – 31.12.2007 | |||
| Net book value 1.1.2007 | 42,104 | 42,104 | |
| Additions (1) | 30,385 | 1,785 | 32,170 |
| Foreign exchange differences | 11 | 11 | |
| a) Cost | 11 | 11 | |
| b) Accumulated amortization | |||
| Disposals | (618) | (618) | |
| a) Cost | (618) | (618) | |
| b) Accumulated amortization | |||
| Amortization charge for the period | (17,801) | (30) | (17,831) |
| Net book value 31.12.2007 | 54,081 | 1,755 | 55,836 |
| Balance 31.12.2007 | |||
| Cost | 156,449 | 1,785 | 158,234 |
| Accumulated amortization | (102,368) | (30) | (102,398) |
| 1.1.2008 - 31.12.2008 | |||
| Net book value 1.1.2008 | 54,081 | 1,755 | 55,836 |
| Additions | 35,172 | 35,172 | |
| Foreign exchange differences | (13) | (13) | |
| a) Cost | (21) | (21) | |
| b) Accumulated amortization | 8 | 8 | |
| Disposals | (73) | (73) | |
| a) Cost | (178) | (178) | |
| b) Accumulated amortization | 105 | 105 | |
| Amortization charge for the period | (21,842) | (357) | (22,199) |
| Net book value 31.12.2008 | 67,325 | 1,398 | 68,723 |
| Balance 31.12.2008 | |||
| Cost | 191,422 | 1,785 | 193,207 |
| Accumulated amortization | (124,097) | (387) | (124,484) |
(1) The amount of € 1,785 concerns the purchase of a brand name as well as other banking rights amortized over 5 years period of time.
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Deferred tax assets | 316,069 | 158,160 |
| Deferred tax liabilities | (158,212) | (82,960) |
| Total | 157,857 | 75,200 |
Deferred tax assets and liabilities arise from:
| Balance | Balance | |||
|---|---|---|---|---|
| 1.1.2008 | Income statement | Equity | 31.12.2008 | |
| Depreciation | 8,555 | (5,325) | 3,230 | |
| Revaluation of fixed assets | 870 | 870 | ||
| Valuation of loans | 18,535 | (71,142) | (52,607) | |
| Suspension of interest accruals | (53,459) | (23,108) | (76,567) | |
| Impairment of loans | (4,707) | 48,439 | 43,732 | |
| Valuation of derivative financial instruments | (695) | 86,335 | 85,640 | |
| Other provisions | 17,378 | 5,072 | 22,450 | |
| Other receivables | (3,204) | (2,140) | (5,344) | |
| Effective interest rate | (1,385) | (14,757) | (16,142) | |
| Employee defined benefit obligations | 110,716 | (17,352) | 93,364 | |
| Liabilities to Common Insurance Fund of Bank | ||||
| Employees (ETAT) | (11,716) | (11,716) | ||
| Valuation of liabilities to credit institutions and | ||||
| other borrowed funds due to fair value hedge | (17,672) | 10,120 | (7,552) | |
| Valuation of investments due to hedge | 2,976 | (547) | 2,429 | |
| Valuation of shares | 7,951 | 5,252 | 13,203 | |
| Valuation of bonds | (1,838) | 1,862 | 62,843 | 62,867 |
| Total | 75,200 | 14,562 | 68,095 | 157,857 |
| Balance | Balance | |||
|---|---|---|---|---|
| 1.1.2007 | Income statement | Equity | 31.12.2007 | |
| Depreciation | 15,696 | (7,141) | 8,555 | |
| Valuation of loans | 11,706 | 6,829 | 18,535 | |
| Suspension of interest accruals | (24,284) | (29,175) | (53,459) | |
| Impairment of loans | 7,305 | (12,012) | (4,707) | |
| Valuation of derivative financial instruments | (6,191) | 5,496 | (695) | |
| Other provisions | 590 | 16,788 | 17,378 | |
| Other receivables | (2,750) | (454) | (3,204) | |
| Effective interest rate | 3,149 | (4,534) | (1,385) | |
| Employee defined benefit obligations | 126,026 | (15,310) | 110,716 | |
| Valuation of liabilities to credit institutions and other | ||||
| borrowed funds due to fair value hedge | (7,785) | (9,887) | (17,672) | |
| Valuation of investments due to hedge | 2,976 | 2,976 | ||
| Valuation of bonds | (1,838) | (1,838) | ||
| Total | 123,462 | (48,262) | 75,200 |
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Prepaid expenses | 8,441 | 11,669 |
| Accrued income | 7,665 | 3,845 |
| Tax advances and withholding taxes | 181,235 | 161,558 |
| Employee advances | 7,618 | 7,431 |
| Receivables from employee defined benefit plan (note 29) | 47,311 | 49,189 |
| Additional contribution to TEK (Law 3714/2008) | 52,290 | |
| Other | 114,966 | 46,934 |
| Total | 419,526 | 280,626 |
In accordance with article 6 of Law 3714/7.11.2008 the amount of deposits guaranteed by the deposit guarantee fund, increased from € 20,000 to € 100,000 per depositor. The contribution paid by banks to deposit guarantee fund also increased.
Thus, the banks have made additional contributions for 2008. The Law concerning the "Deposits Guarantee Fund and Investment (TEKE)" provides that the difference between the regular annual contribution of credit institutions resulting from the application of article 6 of Law 3714/2008 will be included in a special assets group whose elements are jointly included in the proportion of each participant in the credit institutions.
As at 31.12.2008 "Non-current assets held for sale" amounts to € 53,283 (31.12.2007: € 54,706) and include land and buildings amounting to €53,077 (31.12.2007: € 54,161) and office equipment amounting to € 206 (31.12.2007: € 545).
The fair value of "Non-current assets held for sale" as at 31.12.2008 as determined by Alpha Astika Akinita was € 64,319.
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Deposits: | ||
| - Current accounts | 400,433 | 40,090 |
| -Term deposits | ||
| European Central Bank | 5,183,611 | 96,314 |
| Other credit institutions | 3,285,691 | 3,308,628 |
| Sale and repurchase agreements (Repos) | 1,063,730 | 1,923,548 |
| Borrowings | 950,504 | 268,982 |
| Total | 10,883,969 | 5,637,562 |
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Deposits: | ||
| - Current accounts | 5,348,640 | 5,734,927 |
| - Savings accounts | 7,900,871 | 9,122,487 |
| - Term deposits: | ||
| Synthetic Swaps | 1,103,037 | 724,038 |
| Other | 19,247,515 | 7,469,973 |
| Sale and repurchase agreements (Repos) | 60,742 | 113,174 |
| 33,660,805 | 23,164,599 | |
| Cheques payable | 155,289 | 170,289 |
| Total | 33,816,094 | 23,334,888 |
Short term securities (ECP) (1)
| Balance 1.1.2008 | - |
|---|---|
| Changes for the period 1.1 – 31.12.2008 | |
| New issues | 2,605,910 |
| Maturities/Redemptions | (2,409,223) |
| Accrued interest | 24,193 |
| Foreign exchange differences | 27,492 |
| Balance 31.12.2008 | 248,372 |
| Senior debt securities | |
| Balance 1.1.2008 | 18,187,633 |
| Changes for the period 1.1 – 31.12.2008 | |
| New issues (2) | 4,945,354 |
| Maturities/Redemptions | (8,083,035) |
| Fair value change due to hedging | 28,545 |
| Accrued interest | (8,925) |
| Foreign exchange differences | 27,470 |
| Balance 31.12.2008 | 15,097,042 |
| Subordinated debt | |
| Balance 1.1.2008 | 1,412,431 |
| Changes for the period 1.1 – 31.12.2008 | |
| Maturities/Redemptions (3) | (350,000) |
| Fair value change due to hedging | 11,931 |
| Accrued interest | (2,562) |
| Foreign exchange differences | 56,492 |
| Balance 31.12.2008 | 1,128,292 |
| Hybrid securities | |
| Balance 1.1.2008 | 921,912 |
| Changes for the period 1.1 – 31.12.2008 | |
| Accrued interest | 28 |
| Balance 31.12.2008 | 921,940 |
| Total | 17,395,646 |
On 18 July 2008 the issuance of two covered bonds was performed by Alpha Covered Bonds Plc, a subsidiary of the Bank, in accordance with article 91 of Law 3601/2007 and P.D./BOG 2598/2-11-2007. Each covered bond issue amounts to € 1 billion, and has a three and five year duration respectively. The bonds are guaranteed by the Bank and they are collateralized with the above loans. The bonds received a AAA rating from three international credit rating agencies (Standard & Poor's, Moody's, and Fitch).
(1) The Bank raises short term liquidity, through a Euro Commercial paper program amounting to total € 5 billion. Under this program commercial paper may be issued at a discount or may bear floating, fixed or index linked interest with 1 to 364 days duration. The commercial paper can be issued in Euro, US Dollar, GB pound, Swiss Franc, Japanese Yen, Australian Dollar, Canadian Dollar and any other currency that will be agreed by the counterparties.
Issues in Euro pay an average spread of 9 to 35 basis points over Euribor of the respective period.
The issues in US Dollars were set on from 14 to 42 basis points over Libor of the respective period.
The issues in YEN were set on from 20 to 25 basis points over Libor of the respective period
(2) The new senior debt issues amounting to € 4,609 pay a Euribor floating rate, with a spread from 12 up to 125 basis points, depending on the duration of issue. Additionally, new senior debt issues amounting to € 555 million, an embedded put option for the investor exists which bears Euribor plus variable spread. If the investor does not exercise the option, the spread may increase to a maximum between 40 and 120 basis points.
(3) On 19 February 2008, five years after issuance, the Bank redeemed a 10 year subordinated debt amounting to € 100 million.
On 10 July 2008, five years after issuance, the Bank redeemed a 10 year subordinated debt amounting to € 100 million.
On 24 November 2008, five years after issuance, the Bank redeemed a 10 year subordinated debt amounting to € 100 million.
To date these issues have been retained by the Bank and pledged as collateral for monetary policy purposes with the Bank of Greece. In the future they may also be sold to investors.
The liability from the securitization of mortgage loans is not presented in "debt securities in issue and other borrowed funds", since these securities, issued by the Bank's subsidiary Alpha Covered Bonds Plc, are held by the Bank.
On 9 December 2008, the issuance of the bond loans, through the Bank's Subsidiary Katanalotika Plc was completed. The bonds are collaterized with personal, consumer and car loans of the Bank. The bonds rated as Aa2 by the credit rating agency Moody's have been retained by the Bank and pledge as collateral for refinancing purposes with the Bank of Greece.
The € 1.45 billion liability due to the securitization of consumer loans is not presented in "debt securities in issue and other borrowed funds" since these securities, issued by the Bank's subsidiary, are held by the Bank.
| 31.12.2008 | 31.12.2007 |
|---|---|
| 71,616 | 104,266 |
| 26,239 | 23,597 |
| 97,855 | 127,863 |
The total amounts recognized in the financial statements for employee defined benefit obligations are presented in the table below:
| Balance sheet | Balance sheet | |||
|---|---|---|---|---|
| 31.12.2008 | Income statement | 31.12.2007 | Income statement | |
| Liability/ | 1.1.-31.12.2008 | Liability/ | 1.1.-31.12.2007 | |
| (Asset) | Expense/(Income) | (Asset) | Expense/(Income) | |
| TAP – Supplementary pension | (1,199) | |||
| TAP – Lump sum benefit | (47,311) | 3,008 | (49,189) | 4,203 |
| Total | (47,311) | 3,008 | (49,189) | 3,004 |
| TAPILT | - | (3,733) | 3,733 | 8,194 |
| Total | (725) | 11,198 |
Balance sheet and income statements amounts are analysed as follows:
After TAP was absorded by the Common Insurance Fund of Bank Employees for the supplementary pension (Article 10, Law 3620/2007), TAP obligation is restricted to paying a lump-sum benefit to retiring employees, which is guaranteed by the Bank. Amounts included in balance sheet are as follows:
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Present value of defined benefit obligations | 128,895 | 127,035 |
| Fair value of plan assets | (156,268) | (162,031) |
| Deficit / (surplus) | (27,373) | (34,996) |
| Unrecognized actuarial losses | (19,938) | (14,193) |
| Recievable in balance sheet | (47,311) | (49,189) |
The amounts recognized in income statement are as follows:
| From 1 January to | ||
|---|---|---|
| 31.12.2008 | 31.12.2007 | |
| Current service cost | 4,751 | 5,484 |
| Interest cost | 6,391 | 5,342 |
| Expected return on plan assets | (8,134) | (6,623) |
| Total (included in staff cost) | 3,008 | 4,203 |
| The movement in present value of liability as follows: | ||
| 2008 | 2007 | |
| Opening balance | 127,035 | 121,463 |
| Current service cost | 4,751 | 5,484 |
| Interest cost | 6,391 | 5,342 |
| Employee contributions | 1,396 | 1,032 |
| Benefits paid | (6,912) | (8,466) |
| Contributions paid directly by the Bank | (1,130) | (1,357) |
| Expenses | (5) | (68) |
| Actuarial losses/(gains) | (2,631) | 3,605 |
| Closing balance | 128,895 | 127,035 |
| The movement in fair value of plan assets is as follows: | ||
| 2008 | 2007 | |
| Opening balance | 162,031 | 165,051 |
| Expected return | 8,134 | 6,623 |
| Bank contribution | - | - |
| Employee contribution | 1,396 | 1,032 |
| Benefits paid | (6,912) | (8,466) |
| Expenses | (5) | (68) |
| Actuarial losses | (8,376) | (2,141) |
| Closing balance | 156,268 | 162,031 |
The plan assets include deposits with Alpha Bank of € 36.7 million, receivables from Alpha Bank of € 31.1 million, bonds issued, Alpha Credit Group plc of € 82.6 million and Alpha Bank shares of € 3.2 million.
| Balance at 1.1.2007 Accrued expense Benefits paid Contributions paid directly from the Bank Balance at 31.12.2007 Balance at 1.1.2008 Accrued expense Benefits paid Contributions paid directly from the Bank Balance at 31.12.2008 |
The movement in the receivable is as follows: | |
|---|---|---|
| (52,035) | ||
| 4,203 | ||
| - | ||
| (1,357) | ||
| (49,189) | ||
| (49,189) | ||
| 3,008 | ||
| - | ||
| (1,130) | ||
| (47,311) |
The actuarial assumptions used are as follows:
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Discount rate | 5.8% | 5.5% |
| Expected return on plan assets | 5.0% | 5.0% |
| Future salary increases | 3.5% | 3.5% |
Ionian and Popular Bank Insurance Fund (TAPILT – Welfare Sector) is responsible for the payment of a lump sum to retired employees of the former Ionian Bank.
In accordance with article 70 of Law 3655/2008 passed on 31.3.2008 a public sector entity was established "Bank employee and Companies Common Benefit Plan (TAYTEKO)" to provide supplementary insurance, lump sum benefits and health insurance. This insurance fund includes the welfare sector of TAPILT among other funds. For this fund the Bank had applied defined benefit plan accounting as it considered that it had a constructive liability.
The liability was written off due to the adoption of the above law and the incorporation of TAPILT's welfare sector to TAYTEKO from 1.10.2008.
The amounts recognized in balance sheet are as follows:
| 31.12.2007 | |
|---|---|
| Defined benefit obligation | 74,737 |
| Fair value of plan assets | (64,006) |
| Deficit/(surplus) | 10,731 |
| Unrecognised actuarial losses | (6,998) |
| Liability (receivable) in Balance Sheet | 3,733 |
| The amounts recognized in income statement are as follows: | |
| 31.12.2007 | |
| Current service cost | 255 |
| Interest cost | 2,744 |
| Expected return on plan assets of fund | (2,508) |
| Actuarial losses recognized during the period | 28 |
| Past service cost | 7,675 |
| Total (included in staff costs) | 8,194 |
| Movement in present value of liability during 2007 is analyzed as follows: | |
| 2007 | |
| Opening balance | 63,458 |
| Current service cost | 255 |
| Interest cost | 2,744 |
| Employee contributions | 3,061 |
| Benefits paid | (3,096) |
| Expenses | (85) |
| Past service cost | 7,675 |
| Actuarial losses | 725 |
| Closing balance | 74,737 |
Movement in fair value of plan assets during 2007 is analyzed as follows:
| 2007 | |
|---|---|
| Opening balance | 61,202 |
| Expected return | 2,508 |
| Employee contributions | 3,061 |
| Benefits paid | (3,096) |
| Expenses | (85) |
| Actuarial profits (losses) | 416 |
| Closing balance | 64,006 |
| The movement of liability is as follows: | |
| Balance 1.1.2007 | (4.461) |
| Accrued expense | 8,194 |
| Balance 31.12.2007 | 3,733 |
| Balance 1.1.2008 | 3,733 |
| Accrued expense | (66) |
| Income from liability write off | (3,667) |
The principal actuarial assumptions used are the following:
| 31.12.2007 | |
|---|---|
| Discount rate | 5.5% |
| Expected return on plan assets | 5.0% |
| Future salary increases | 3.5% |
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Suppliers | 48,717 | 38,234 |
| Deferred income | 3,846 | 3,752 |
| Accrued expenses | 72,278 | 41,183 |
| Liabilities to third parties | 225,371 | 237,444 |
| Liabilities to E.T.A.T. (1) | 518,400 | 565,263 |
| Liabilities from credit cards | 228,789 | 226,982 |
| Other | 107,061 | 46,154 |
| Total | 1,204,462 | 1,159,012 |
| 31. Provisions | ||
| Balance 1.1.2007 | 17,901 | |
| Changes for the period 1.1 – 31.12.2007 |
| Provisions used during the period | (443) |
|---|---|
| Other provisions charged to profit and loss | 2,791 |
| Reversal of provisions to cover credit risk relating to off-balance sheet items (note 9) | (41,729) |
| Changes for the period 1.1 – 31.12.2008 | |
| Balance 31.12.2007 | 47,796 |
| Provisions used during the period | (10) |
| Reversal of provisions | (1,078) |
| Provisions to cover credit risk relating to off-balance sheet items (note 9) | 30,983 |
The amount of other provisions charged to profit and loss is included in "other expenses" of the income statement.
(1) In accordance with article 10 of Law 3620/2007 and the fact that employees and pensioners of T.A.P. jointed E.T.A.P. from 1.1.2008 (note 29), the charge to the Bank is € 543 million payable in 10 equally annual installments. In 31.12.2007 balance the above amount and the interest charged for 2007 are included, while the 31.12.2008 balance is set from the payment of the annual installment and the interest of the current year.
| Paid-in | ||
|---|---|---|
| Number of shares | share capital | |
| Opening balance 1 January 2007 | 408,022,002 | 1,591,286 |
| Exercise of share options | 2,954,650 | 11,523 |
| Balance 31 December 2007 | 410,976,652 | 1,602,809 |
| Share capital increase through the capitalization of the share premium reserve of € 184,033 and part of taxed retained earnings of € 144,748, with an increase of the nominal value of each share from € 3.90 to € 4.70. (Decision of General Meeting on |
||
| 3.4.2008) | 328,781 | |
| Balance 31 December 2008 | 410,976,652 | 1,931,590 |
| Each share has a single voting right in the shareholders meetings. | ||
| 33. Share premium | ||
| Opening Balance ( 1 January 2007) | 127,961 | |
| Difference of exercised share options | 56,072 | |
Balance 31 December 2007 184,033 Capitalization(note 32) (184,033)
Balance 31 December 2008
Reserves are analyzed as follows:
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Statutory reserve | 382,280 | 336,180 |
| Available-for-sale reserve | (216,432) | (2,288) |
| Total | 165,848 | 333,892 |
According to the Bank's articles of association (article 26) as amended in May 2008, the Bank is required to transfer 5% of its annual net profit to the statutory reserve, until the reserve amounts to 50% of share capital. This reserve can only be used to offset losses according to article 44 of Law 2190/1920.
a. Included in retained earnings are gains for the sale of listed shares and other non-taxable income or special taxable income that is not subject to tax and will not be distributed.
The reserves which were formed by 31 December 2005, have been taxed.
The reserves which were formed during 2007 and thereafter are subject to tax at the rate applicable to the Bank (Law 3634/2008).
The reserves which have been subject to tax may be distributed or capitalized without any further tax liability.
b. According to the article 3 paragraph 1 of Law 148/1967 entities are obliged to distribute each year dividends, unless decided otherwise by the Shareholders in general meeting, a minimum amount equal to 35% of the annual profits after the deduction of the statutory reserve appropriation and the gain from the sale of shares. The net profit arising from the valuation of financial instruments to fair value after deducting losses for the same reason is not included in the calculation of the dividend as defined by the relevant legislation.
According to paragraph 3 of article 1 of Law 3723/2008 relating to strength of liquidity in order to deal with the challenges of the credit crunch, the dividend distribution cannot exceed 35% as determined in the above law.
The ordinary General Shareholders' Meeting held on 3 April 2008, approved the distribution of a dividend for 2007 of € 0.90 per share. As at 31.12.2008, the total amount of € 362,199 has been deducted from retained earnings.
The Bank pursuant to the decisions of prior years General Meeting of Shareholders, purchased during the first quarter of 2008, 8,123,677 treasury shares at a cost of € 167,551 (€ 20.63 per share).
Based on the decision of the general meeting of shareholders held on 3 April 2008 which approved the establishment of a share buy back program, for the period April 2008 - April 2010, the Bank acquired during 1.4 - 31.12.2008 13,998,747 treasury shares at a cost of € 242,839 (€ 17.35 per share).
On 30 June 2008, the Bank completed the sale of 16,439,066 treasury shares the cost of which amounted to € 341,405, through a private placement, which represented 4% of its issued share capital. The result of the above transaction has been recognized directly to the Retained earnings account of equity.
As at 31 December 2008 the Bank holds 5,683,358 treasury shares with a cost of € 68,985 (€ 12.14 per share).
The number of treasury shares and the cost are analyzed as follows:
| Number of shares | Cost | Percentage | |
|---|---|---|---|
| Balance 31.12.2007 | |||
| Purchases 1.1 - 31.12.2008 | 22,122,424 | 410,390 | 5.38% |
| Sale 30.6.2008 | (16,439,066) | (341,405) | (4.00%) |
| Balance 31.12.2008 | 5,683,358 | 68,985 | 1.38% |
The Bank, in the ordinary course of business, is a defendant in claims from customers and other legal proceedings. No provision has been recorded because after consultation with legal department, the ultimate disposition of these matters is not expected to have a material effect on the financial position or operations of the Bank.
The Bank's books and records have been audited by the tax authorities up to and including the year ended 31 December 2005.
The Bank's branches in Albania and Bulgaria have been audited by the tax authorities for the year up to and including 2007, while the London branch has been audited for all years up to and including 2005.
Additional taxes and penalties may be imposed for the unaudited years.
The Bank has various obligations with respect to leases of buildings which are used as branches or for administration purposes. The duration of the lease agreements is initially for 12 years with a renewal option or extension. In accordance with the lease agreements the rent is subject to annual indexation adjustment, usually according to official annual inflation rate.
The policy of the Bank is to renew these contracts.
The minimum future lease payments are:
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| ► Less than one year | 28,498 | 25,410 |
| ► Between one and five years | 88,492 | 70,904 |
| ► More than five years | 78,732 | 57,918 |
| Total | 195,722 | 154,232 |
The total lease expense for 2008 relating to rental of buildings amounts to € 35,208 (2007: € 27,407) and are included in "General administrative expenses".
The Bank's receivables from leases relate to buildings leased either to group companies or third parties.
The minimum future revenues are:
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| ► Less than one year | 3,788 | 3,720 |
| ► Between one and five years | 8,767 | 10,307 |
| ► More than five years | 6,054 | 7,218 |
| Total | 18,609 | 21,245 |
The lease revenues for the year 2008 amount to € 3,896 (2007: € 3,397), and are included in "Other income".
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Letters of guarantee | 6,253,944 | 5,453,629 |
| Letters of credit | 104,567 | 82,857 |
| Credit commitments | 16,912,309 | 16,386,205 |
| Guarantees relating to bonds issued by subsidiaries of the Bank | 17,328,137 | 20,485,817 |
| Total | 40,598,957 | 42,408,508 |
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Loans to customers | 964,490 | 800,490 |
| Securities from reserve repos | 400,000 | |
| Financial assets at fair value through profit and loss | 60,964 | |
| Investment secutities | 5,632,896 | 160,000 |
| Total | 7,058,350 | 960,490 |
The Bank has collaterized customer loans to the Bank of Greece in accordance with the Monetary Policy Council Act no 54/27.2.2004 as in force, and following its amendment by Monetary Policy Council Act 61/6.12.2006 with this act the Bank of Greece accepts as collateral for monetary policy purposes and intraday credit non-marketable assets which should meet the terms and conditions of the above act.
From the investment securities portfolio € 5,000 is pledged as collateral to clearing house of derivative transactions "ETESEP" A.E. as a margin account insurance.
The above mentioned financial assets measured at fair value through profit or loss derived from reserve repos and investments securities are pledged as collateral to Bank of Greece for the participation in the Intra-Europe clearing of payments system on an ongoing time (TARGET) and in the European Central Bank's main refinancing operations.
Securities amounting € 3.5 billion, included in the above amounts and issued due to the securitization of mortgage and consumer loans, are held by the Bank. The above securities are not presented in "Investment Securities" but are presented net from the Banks' liabilities to special purpose entities that have issued these securities.
On 7 May 2008 the Bank completed a new Medium Term Notes Program amounting to USD 7.5 billion, according to Rule 144A of the American Law, which will be offered to institutional investors. The issuer will be Alpha Group Jersey Limited a wholly owned subsidiary of the Bank. The Notes will be guaranteed by the Bank and will be traded in Luxembourg's stock exchange. The program is not yet active.
| (Millions of Euro) | |||||||
|---|---|---|---|---|---|---|---|
| 1.1. - 31.12.2008 | |||||||
| Total | Retail Banking |
Corporate Banking |
Asset Management/Insurance |
Investment Banking/ Treasury |
South Eastern Europe |
Other | |
| Interest | 1,350.5 | 1,003.2 | 272.2 | 1.9 | 32.2 | 41.0 | 0.0 |
| Commission | 317.1 | 173.3 | 83.3 | 35.3 | 18.3 | 6.9 | 0.0 |
| Other income | 75.5 | 11.6 | 10.7 | 1.2 | (34.2) | 3.1 | 83.1 |
| Total income | 1,743.1 | 1,188.1 | 366.2 | 38.4 | 16.3 | 51.0 | 83.1 |
| Expenses | (852.3) | (592.4) | (118.1) | (23.3) | (22.7) | (48.2) | (47.6) |
| Impairment | (495.4) | (278.9) | (203.2) | (13.3) | |||
| Profit before income | |||||||
| tax | 395.4 | 316.8 | 44.9 | 15.1 | (6.4) | (10.5) | 35.5 |
| Assets | 66,738.2 | 24,129.1 | 18,890.9 | 235.8 | 19,555.1 | 1,706.6 | 2,220.7 |
| Liabilities | 64,368.8 | 36,750.7 | 2,714.2 | 1,757.9 | 20,006.8 | 799.3 | 2,339.9 |
| Capital expenditure | 116.7 | 80.8 | 22.0 | 1.4 | 1.6 | 10.9 | |
| Depreciation and | |||||||
| Amortization | 57.6 | 39.8 | 10.9 | 0.7 | 0.8 | 5.4 | 0.0 |
| 1.1. - 31.12.2007 |
| Total | Retail Banking |
Corporate Banking |
Asset Management/Insurance |
Investment Banking/ Treasury |
South Eastern Europe |
Other | |
|---|---|---|---|---|---|---|---|
| Interest | 1,227.7 | 921.0 | 246.8 | 3.6 | 31.5 | 24.8 | |
| Commission | 321.9 | 162.7 | 89.7 | 51.8 | 11.9 | 5.8 | |
| Other income | 37.5 | 18.1 | 5.0 | 2.4 | 26.8 | 0.9 | (15.7) |
| Total income | 1,587.1 | 1,101.8 | 341.5 | 57.8 | 70.2 | 31.5 | (15.7) |
| Expenses | (778.9) | (551.8) | (99.3) | (31.3) | (22.6) | (22.5) | (51.4) |
| Impairment | (194.6) | (115.7) | (78.9) |
| (67.1) | ||||||
|---|---|---|---|---|---|---|
| 54,039.1 | 19,696.4 | 16,858.3 | 181.5 | 14,327.2 | 1,051.2 | 1,924.5 |
| 51,298.9 | 29,916.7 | 2,078.8 | 1,199.8 | 14,805.3 | 697.5 | 2,600.8 |
| 98.6 | 72.7 | 17.0 | 1.3 | 1.2 | 6.4 | |
| 51.2 | 37.6 | 9.1 | 0.8 | 0.6 | 3.1 | |
| 613.6 | 434.3 | 163.3 | 26.5 | 47.6 | 9.0 |
Includes all individuals (retail banking customers) of the Bank, professionals, and small companies.
The Bank offers through its extended branch network, all types of deposit products (deposits/ savings accounts, working capital/ current accounts, investment facilities/ term deposits, Repos, Swaps), loan facilities (mortgages, consumer, corporate loans, letter of guarantees) and debit and credit cards to the above customers.
Includes all medium-sized and large companies, corporations with international activities, corporations managed by the Corporate Banking Division (Corporate) and shipping corporations.
The Bank offers working capital facilities, corporate loans, and letters of guarantees.
Consists of a wide range of asset management services through the Bank's private banking units. In addition it offers a wide range of insurance products to individuals and corporations.
Includes stock exchange, advisory and brokerage services relating to capital markets, and also investment banking facilities, offered by the Bank. Includes also the activities of the Dealing Room in the interbank market (FX Swaps, Bonds, Futures, IRS, Interbank placements – Loans etc.).
Consists of the Bank's branches operating in South Eastern Europe.
This segment consists of the Bank's administration section
| (millions of Euro) | |||
|---|---|---|---|
| 31.12.2008 | |||
| Total | Greece | Other countries | |
| Interest | 1,350.5 | 1,303.2 | 47.3 |
| Commission | 317.1 | 309.0 | 8.1 |
| Other income and income on financial transactions | 75.5 | 70.3 | 5.2 |
| Total income | 1,743.1 | 1,682.5 | 60.6 |
| Total expenses | 852.3 | 800.9 | 51.4 |
| Impairment | 495.4 | 432.2 | 63.2 |
| Profit before income tax | 395.4 | 449.4 | (54,0) |
| Assets | 66,738.2 | 63,096.6 | 3,641.6 |
| 31.12.2007 | ||||
|---|---|---|---|---|
| Total | Greece | Other countries | ||
| Interest | 1,227.7 | 1,201.1 | 26.6 | |
| Commission | 321.9 | 315.7 | 6.2 | |
| Other income and income on financial transactions | 37.5 | 36.0 | 1.5 | |
| Total income | 1,587.1 | 1,552.8 | 34.3 | |
| Total expenses | (778.9) | (753.7) | (25.2) | |
| Impairment | (194.6) | (194.6) | ||
| Profit before income tax | 613.6 | 604.5 | 9.1 | |
| Assets | 54,039.1 | 52,607.2 | 1,431.9 |
The Bank has established a systematic and disciplined management framework for the reliable measurement of risk. Considering the stability and continuity of its operations, management places high priority on the goal of implementing and continuously improving this framework, in order to minimize potential negative effects on Bank's financial results.
The Board of Directors of the Bank has overall responsibility for the improvement and oversight of the Risk Management framework. Risk Management Committee is established, which meets on a quarterly basis and reports to the Board of Directors on its activities. The Risk Management Committee is responsible for the implementation and monitoring compliance with the risk management policies. The Bank re-examines the effectiveness of the risk management framework on a regular basis in order to ensure compliance with international best practices and regulatory framework.
In the Bank the risk management departments are under the authority of the Group's risk management director and are entitled with the responsibility for the implementation of the risk management framework, according to the directions of the Risk Management Committee.
Credit risk is the risk of financial loss to the Bank if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk is considered the most significant risk for the Bank, and its continuous monitoring is management's first priority.
The Bank in order to effectively manage credit risk has developed specific methodologies and systems to measure credit risk. These systems and methodologies are continuously evolving so as to provide to the maximum extent possible current and productive support in the decisions making process of the business units in order to avoid possible adverse consequences on the result of the Bank.
The main tool for the measurement of credit risk is the credit risk grading system. Current systems use both quantitative and qualitative criteria of measurement and also criteria of transactional behavior in order to report customer probabilities of loss given defaults. Respective models are continuously improved in order for the total loan portfolio to be included in the new system of internal grading imposed by capital adequacy requirements. The credit grading system consists of nine basic grades. Additionally, the Bank uses ratings provided by International Rating Agencies.
At the same time, statistical models are being developed in order to calculate loss given default and the exposure at default.
Credit risk rating also determine both credit limits and collaterals and it is systematically reassessed on a six or twelve month basis. The reassessment is based on the customer's credit worthiness and on any new information and events that may have a significant impact on the level of credit risk.
Credit risk grading systems are being constantly tested qualitatively in order to assure at every turn their ability. At the same time the Bank performs stress testing exercises concerning credit risk on a regular basis. Based on respective stress testing an estimation is provided of the size of financial losses that could occur under extreme transactional behavior of the clients. Additionally, on regular basis large exposures are monitored and management and the Board of Directors are informed.
The Bank assess as at each balance sheet date, whether there is evidence of impairment in accordance with the general principles and methodology set out in IAS 39 and the relevant implementation guidance.
Specifically the above mentioned procedures include the following steps:
a) Establishment of events that provide objective evidence that a loan is impaired (trigger events)
In note 1.12 "Impairment losses on loans and advances" the accounting principles applied for loan impairment are described in detail.
| Exposure before Net exposure to Exposure before Net exposure to impairment Impairment credit risk impairment Impairment credit risk Α. Credit risk exposure relating to on-balance sheet items Due from Banks 8,420,793 8,420,793 7,349,675 Loans and advances to customers: Individuals: ▪ Mortgages 11,176,529 78,536 11,097,993 9,741,095 51,641 ▪ Consumer 3,595,776 118,495 3,477,281 2,922,529 72,940 ▪ Credit cards 1,229,778 52,899 1,176,879 1,046,941 53,039 ▪ Other loans 96,770 96,770 100,031 Total 16,098,853 249,930 15,848,923 13,810,596 177,620 13,632,976 Companies: ▪ Corporate loans 26,615,726 764,216 25,851,510 21,900,097 426,321 21,473,776 ▪ Other receivables 488,845 488,845 166,342 5,220 27,104,571 764,216 26,340,355 22,066,439 431,541 21,634,898 Total 43,203,424 1,014,146 42,189,278 35,877,035 609,161 35,267,874 Financial assets at fair value through profit of loss: |
|
|---|---|
| 7,349,675 | |
| 9,689,454 | |
| 2,849,589 | |
| 993,902 | |
| 100,031 | |
| 161,122 | |
| ▪ Government bonds 73,936 73,936 236,340 |
236,340 |
| ▪ Other debt securities 12,944 12,944 28,448 |
28,448 |
| ▪ Derivative financial instruments 494,386 494,386 384,466 |
384,466 |
| Total 581,266 581,266 649,254 |
649,254 |
| Investment Securities: ▪ Available-for-sale (government |
|
| bonds) 239,757 239,757 1,856,217 |
1,856,217 |
| ▪ Available-for-sale (other) 5,767,800 5,767,800 4,344,648 |
4,344,648 |
| ▪ Available-for-sale (other variable yield securities) 26,340 26,340 30,668 |
30,668 |
| ▪ Held to maturity (government | |
| bonds) 1,805,579 1,805,579 |
|
| ▪ Held to maturity (other) 2,683,130 2,683,130 |
|
| Total 10,522,606 10,522,606 6,231,533 |
6,231,533 |
| Total amount of on balance sheet items exposed to credit risk (a) |
|
| 62,728,089 1,014,146 61,713,943 50,107,497 609,161 49,498,336 |
|
| Other on-balance sheet items not | |
| exposed to credit risk 5,024,231 5,024,231 4,540,800 |
4,540,800 |
| Total Assets 67,752,320 1,014,146 66,738,174 54,648,297 609,161 54,039,136 |
|
| B. Credit risk exposure relating to off balance sheet items: |
|
| Letters of guarantee and letters of credit 6,358,511 4,200 6,354,311 5,536,486 45,929 |
5,490,557 |
| Undrawn credit facilities 16,912,309 16,912,309 16,386,205 16,386,205 |
|
| Guarantees relating to bonds issued by subsidiaries of the Bank 17,328,137 17,328,137 20,485,817 20,485,817 |
|
| Total amount of off balance sheet items exposed to credit risk (b) 40,598,957 4,200 40,594,757 42,408,508 45,929 42,362,579 |
|
| Total credit risk exposure (a+b) 103,327,046 1,018,346 102,308,700 92,516,005 655,090 91,860,915 |
(1) Undrawn credit facilities as of 31.12.2008 include an amount of € 601 million (31.12.2007 € 531 million) which are committed limits that cannot be cancelled in
cases where it becomes apparent that the counterparty will fail to meet their contractual obligations.
| 31.12.2008 | ||||
|---|---|---|---|---|
| Neither past due nor impaired |
Past due but not impaired |
Impaired | Total | |
| Loans and advances to individuals | ||||
| ▪ Mortgages | ||||
| Performing loans | 9,595,938 | 9,595,938 | ||
| Past due 1-90 days | 1,201,623 | 1,201,623 | ||
| Past due >90 days | 378,968 | 378,968 | ||
| 9,595,938 | 1,201,623 | 378,968 | 11,176,529 | |
| ▪ Credit cards, consumer and other loans | ||||
| Performing loans | 4,019,525 | 4,019,525 | ||
| Past due 1-90 days | 641,346 | 641,346 | ||
| Past due >90 days | 261,453 | 261,453 | ||
| 4,019,525 | 641,346 | 261,453 | 4,922,324 | |
| Corporate loans | ||||
| Performing loans | 23,391,103 | 299,945 | 23,691,048 | |
| Past due 1-90 days | 2,236,443 | 82,781 | 2,319,224 | |
| Past due >90 days | 218,705 | 875,594 | 1,094,299 | |
| 23,391,103 | 2,455,148 | 1,258,320 | 27,104,571 | |
| Total portfolio | ||||
| Performing loans | 37,006,566 | 299,945 | 37,306,511 | |
| Past due 1-90 days | 4,079,412 | 82,781 | 4,162,193 | |
| Past due >90 days | 218,705 | 1,516,015 | 1,734,720 | |
| Total | 37,006,566 | 4,298,117 | 1,898,741 | 43,203,424 |
| 31.12.2007 | ||||
| Neither past due nor impaired |
Past due but not impaired |
Impaired | Total | |
| Loans and advances to individuals | ||||
| ▪ Mortgages | ||||
| Performing loans | 8,486,531 | 8,486,531 | ||
| Past due 1 - 90 days | 997,867 | 997,867 | ||
| Past due > 90 days | 256,697 | 256,697 | ||
| 8,486,531 | 997,867 | 256,697 | 9,741,095 | |
| ▪ Credit cards, consumer and other loans | ||||
| Performing loans | 3,486,190 | 3,486,190 | ||
| Past due 1 - 90 days | 405,368 | 405,368 | ||
| Past due > 90 days | 177,943 | 177,943 | ||
| 3,486,190 | 405,368 | 177,943 | 4,069,501 | |
| Corporate loans | ||||
| Performing loans | 18,921,994 | 240,585 | 19,162,579 | |
| Past due 1 - 90 days | 1,849,329 | 84,852 | 1,934,181 | |
| Past due > 90 days | 260,267 | 709,412 | 969,679 | |
| 18,921,994 | 2,109,596 | 1,034,849 | 22,066,439 | |
| Total portfolio | ||||
| Performing loans | 30,894,715 | 240,585 | 31,135,300 | |
| Past due 1 - 90 days | 3,252,564 | 84,852 | 3,337,416 | |
| Past due > 90 days | 260,267 | 1,144,052 | 1,404,319 | |
| Total | 30,894,715 | 3,512,831 | 1,469,489 | 35,877,035 |
| 31.12.2008 | |||||||
|---|---|---|---|---|---|---|---|
| Credit cards, consumer | |||||||
| Mortgage | and other loans | Corporate Loans | Total | ||||
| Low risk | 9,595,938 | 4,019,525 | 22,621,610 | 36,237,073 | |||
| Under surveillance | 769,493 | 769,493 | |||||
| Total | 9,595,938 | 4,019,525 | 23,391,103 | 37,006,566 | |||
| 31.12.2007 | |||||||
| Credit cards, consumer | |||||||
| Mortgage | and other loans | Corporate Loans | Total | ||||
| Low risk | 8,486,531 | 3,486,190 | 18,296,246 | 30,268,967 | |||
| Under surveillance | 625,748 | 625,748 | |||||
| Total | 8,486,531 | 3,486,190 | 18,921,994 | 30,894,715 |
This category includes loans that have indications that the counterparty will not be able to meet their contractual obligations, accounts were a settlement was agreed during the last 12 months, and they are subsequently meeting their obligations. These loans amounted to € 160,335 million as at 31.12.2008 (31.12.2007: € 46,665).
| 31.12.2008 | ||||||
|---|---|---|---|---|---|---|
| Credit cards, consumer | ||||||
| Mortgage | and other loans | Corporate Loans | Total | |||
| Past due 1 - 90 days | 1,201,623 | 641,346 | 2,236,443 | 4,079,412 | ||
| Past due > 90 days | 218,705 | 218,705 | ||||
| Total | 1,201,623 | 641,346 | 2,455,148 | 4,298,117 | ||
| Fair value of collaterals | 1,805,614 | 6,125 | 3,781,443 | 5,593,182 | ||
| 31.12.2007 | |||||
|---|---|---|---|---|---|
| Credit cards, consumer | |||||
| Mortgage | and other loans | Corporate Loans | Total | ||
| Past due 1 - 90 days 997,867 |
405,368 | 1,849,329 | 3,252,564 | ||
| Past due > 90 days | 260,267 | 260,267 | |||
| Total 997,867 |
405,368 | 2,109,596 | 3,512,831 | ||
| Fair value of collaterals 1,527,534 |
89,843 | 2,942,557 | 4,559,934 |
| 31.12.2008 | |||||
|---|---|---|---|---|---|
| Credit cards, consumer | |||||
| Mortgage | and other loans | Corporate Loans | Total | ||
| Carrying amount before impairment | 378,968 | 261,453 | 1,258,320 | 1,898,741 | |
| Allowance of impairment | (78,536) | (171,394) | (764,216) | (1,014,146) | |
| Carrying amount | 300,432 | 90,059 | 494,104 | 884,595 | |
| Fair value of collaterals | 347,965 | 15,000 | 1,144,303 | 1,507,268 |
| 31.12.2007 | |||||
|---|---|---|---|---|---|
| Credit cards, consumer | |||||
| Mortgage | and other loans | Corporate Loans | Total | ||
| Carrying amount before impairment | 256,697 | 177,943 | 1,034,849 | 1,469,489 | |
| Allowance of impairment | (51,641) | (125,979) | (431,541) | (609,161) | |
| Carrying amount | 205,056 | 51,964 | 603,308 | 860,328 | |
| Fair value of collaterals | 236,794 | 21,206 | 951,098 | 1,209,098 |
| 31.12.2008 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Derivatives financial | Available for | |||||||
| Due from Banks | Trading securities | instruments | sale | Held to maturity | Total | |||
| ΑΑΑ | 34,892 | 1,244 | 170,391 | 206,527 | ||||
| ΑΑ- to ΑΑ+ | 520,029 | 1,261 | 13,962 | 306,390 | 841,642 | |||
| Α- to Α+ | 6,838,709 | 79,457 | 258,314 | 5,788,336 | 3,077,895 | 16,042,711 | ||
| Lower than Α- | 1,062,055 | 7,423 | 2,786 | 230,355 | 934,033 | 2,236,652 | ||
| Unrated | 197,133 | 197,133 | ||||||
| Total | 8,420,793 | 86,880 | 494,386 | 6,033,897 | 4,488,709 | 19,524,665 |
31.12.2007
| Due from Banks | Trading securities | Derivatives financial instruments |
Available for sale |
Held to maturity | Total | |
|---|---|---|---|---|---|---|
| ΑΑΑ | 81,305 | 81,305 | ||||
| ΑΑ- to ΑΑ+ | 400,905 | 266,664 | 10,000 | 677,569 | ||
| Α- to Α+ | 5,497,986 | 246,148 | 54,622 | 5,274,148 | 11,072,904 | |
| Lower than Α- | 1,450,784 | 18,640 | 347 | 866,080 | 2,335,851 | |
| Unrated | 62,833 | 62,833 | ||||
| Total | 7,349,675 | 264,788 | 384,466 | 6,231,533 | 14,230,462 |
The above do not present delays and no impairment exists after relevant tests.
In the following tables are presented the financial instruments carrying amounts by industry sectors of the counterparties.
31.12.2008
| Financial Institutions and other financial services |
Manufacturing | Construction and real estate |
Wholesale and retail trade |
Public | sector Transportation Shipping | Hotels - Tourism |
Other sectors |
Individuals | Total | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Credit risk exposure relating to on balance sheet items |
|||||||||||
| Due from banks | 8,420,793 | 8,420,793 | |||||||||
| Loans and advances to customers: | |||||||||||
| Individuals: | |||||||||||
| ▪ Mortgage | 11,176,529 11,176,529 | ||||||||||
| ▪ Credit cards and consumer | 4,825,554 | 4,825,554 | |||||||||
| ▪ Other receivables | 96,770 | 96,770 | |||||||||
| Total | 16,098,853 16,098,853 | ||||||||||
| Corporate loans and other receivables |
2,506,433 | 5,532,747 | 2,927,067 6,549,900 | 173,721 | 2,283,759 1,634,610 | 2,095,491 | 3,400,843 | 27,104,571 | |||
| Total | 2,506,433 | 5,532,747 | 2,927,067 6,549,900 | 173,721 | 2,283,759 1,634,610 | 2,095,491 | 3,400,843 16,098,853 43,203,424 | ||||
| Financial assets at fair value through profit or loss: |
|||||||||||
| ▪ Debt securities | 12,505 | 439 | 73,936 | 86,880 | |||||||
| ▪ Derivative financial instruments | 420,228 | 74,158 | 494,386 | ||||||||
| Total | 432,733 | 439 | 73,936 | 74,158 | 581,266 | ||||||
| Investment securities | |||||||||||
| ▪ Available-for-sale | 5,673,888 | 26,104 | 42,423 | 230,839 | 60,643 | 6,033,897 | |||||
| ▪ Held to maturity | 2,315,481 | 119,100 | 123,459 | 72,213 1,858,456 | 4,488,709 | ||||||
| Total | 7,989,369 | 119,100 | 149,563 | 114,636 2,089,295 | 60,643 | 10,522,606 | |||||
| Total carrying amount of on balance sheet items exposed to credit risk (a) |
19,349,328 | 5,651,847 | 3,076,630 6,664,975 2,336,952 | 2,283,759 1,634,610 | 2,095,491 | 3,535,644 16,098,853 62,728,089 | |||||
| Other on-balance sheet items not exposed to credit risk |
5,024,231 | 5,024,231 | |||||||||
| Total assets | 19,349,328 | 5,651,847 | 3,076,630 6,664,975 2,336,952 | 2,283,759 1,634,610 | 2,095,491 | 8,559,875 | 16,098,853 | 67,752,320 | |||
| Credit risk exposure relating to on balance sheet items: |
|||||||||||
| Letters of guarantee and letters of credit |
28,256 | 1,257,194 | 2,215,825 1,189,493 | 11,106 | 62,074 | 61,997 | 114,441 | 1,418,125 | 6,358,511 | ||
| Undrawn credit facilities | 16,912,309 | 16,912,309 | |||||||||
| Guarantees for bonds issued by subsidiaries of the Bank |
17,328,137 | 17,328,137 | |||||||||
| Total carrying amount of off balance sheet items exposed to credit risk (b) |
28,256 | 1,257,194 | 2,215,825 1,189,493 | 11,106 | 62,074 | 61,997 | 114,441 35,658,571 | 40,598,957 | |||
| Total credit risk exposure (a+b) | 19,377,584 | 6,909,041 | 5,292,455 7,854,468 2,348,058 | 2,345,833 1,696,607 | 2,209,932 39,194,215 | 16,098,853 | 103,327,046 |
31.12.2007
| Financial Institutions and other financial services |
Manufacturing | Construction and real estate |
Wholesale and retail trade |
Public | sector Transportation Shipping | Hotels - Tourism |
Other sectors |
Individuals | Total | ||
|---|---|---|---|---|---|---|---|---|---|---|---|
| Credit risk exposure relating to on balance sheet items |
|||||||||||
| Due from banks | 7,349,675 | 7,349,675 | |||||||||
| Loans and advances to customers: | |||||||||||
| Individuals: | |||||||||||
| ▪ Mortgage | 9,741,095 | 9,741,095 | |||||||||
| ▪ Credit cards and consumer | 3,969,470 | 3,969,470 | |||||||||
| ▪ Other receivables | 100,031 | 100,031 | |||||||||
| Total | 13,810,596 13,810,596 | ||||||||||
| Corporate loans and other receivables |
2,490,290 | 4,529,146 | 1,901,826 5,582,347 | 162,472 | 1,935,614 1,360,515 | 1,943,729 | 2,160,500 | 22,066,439 | |||
| Total loans and advances to customers |
2,490,290 | 4,529,146 | 1,901,826 5,582,347 | 162,472 | 1,935,614 1,360,515 | 1,943,729 | 2,160,500 13,810,596 | 35,877,035 | |||
| Securities held for trading | |||||||||||
| ▪ Debt securities | 236,340 | 28,448 | 264,788 | ||||||||
| ▪ Derivative financial instruments | 324,929 | 59,537 | 384,466 | ||||||||
| Total | 324,929 | 236,340 | 87,985 | 649,254 | |||||||
| Investment securities | |||||||||||
| ▪ Available-for-sale | 3,946,821 | 82,100 | 80,246 1,856,217 | 266,149 | 6,231,533 | ||||||
| Total carrying amount of on balance sheet items exposed to credit risk (a) |
14,111,715 | 4,611,246 | 1,901,826 5,662,593 2,255,029 | 1,935,614 1,360,515 | 1,943,729 | 2,514,634 | 13,810,596 | 50,107,497 | |||
| Other on-balance sheet items not exposed to credit risk |
4,540,800 | 4,540,800 | |||||||||
| Total assets | 14,111,715 | 4,611,246 | 1,901,826 5,662,593 2,255,029 | 1,935,614 1,360,515 | 1,943,729 | 7,055,434 | 13,810,596 | 54,648,297 | |||
| Credit risk exposure relating to off balance sheet items: |
|||||||||||
| Letters of guarantee and letters of credit |
6,188 | 676,299 | 887,606 | 750,258 | 2,414 | 10,203 | 38,700 | 123,970 | 3,040,848 | 5,536,486 | |
| Undrawn credit facilities | 16,386,205 | 16,386,205 | |||||||||
| Guarantees for bonds issued by subsidiaries of the Bank |
20,485,817 | 20,485,817 | |||||||||
| Total carrying amount of off balance sheet items exposed to |
|||||||||||
| credit risk (b) | 6,188 | 676,299 | 887,606 | 750,258 | 2,414 | 10,203 | 38,700 | 123,970 | 39,912,870 | 42,408,508 | |
| Total credit risk exposure (a+b) | 14,117,903 | 5,287,545 | 2,789,432 6,412,851 2,257,443 | 1,945,817 1,399,215 | 2,067,699 | 42,427,504 | 13,810,596 | 92,516,005 |
Market risk is the risk of losses arising from unfavourable changes in interest rates, foreign exchange rates, stock exchange indexes, equity prices and commodities. Losses may also occur either from the trading portfolio or from the banking book.
The market risk is measured by the Value at Risk – VAR. The method applied for calculating Value at Risk is historical simulation. The Bank applies a holding period of 1 and 10 days, depending on the time required to liquidate the portfolio.
| 2008 | 2007 | |||||
|---|---|---|---|---|---|---|
| Foreign currency risk |
Interest rate risk |
Price risk | Covariance | Total | Total | |
| 31 December | 418,401 | 1,085,578 | 189,006 | (17,623) | 1,675,362 | 320,791 |
| Average daily value (annual) | 246,199 | 2,006,198 | 302,964 | (485,090) | 2,070,271 | 1,019,495 |
| Maximum daily value (annual) | 57,275 | 3,460,779 | 645,807 | (439,967) | 3,723,894 | 3,027,642 |
| Minimum daily value (annual) | 95,617 | 651,307 | 102,094 | (268,428) | 580,590 | 223,039 |
The Value at Risk methodology is complemented with stress tests based on both historical and hypothetical extreme movements of market parameters, in order to estimate the potential size of losses that could arise in extreme conditions.
Within the scope of policy-making for financial risk management by the Asset and Liability Management Committee (ALCO), exposure limits and maximum loss (stop loss) for various products of the trading portfolio have been set. In particular the following limits have been set for the following risks:
Positions held in these products are monitored during the day and are examined as to the corresponding limit percentage cover and limit excess.
Apart from the trading portfolio market risk may also arise from the Banking Book from the analysis. This risk is foreign currency risk and interest rate risk.
The Bank takes on exposures to effects of fluctuations in foreign exchange rates.
The General Management of the Bank sets limits on the level of exposure by currency and in total for both overnight and intraday positions. The total position arises from the net on balance sheet position and derivatives forward position as presented in the tables below:
| OTHER | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| USD | GBP | CHF | JPY | RON | RSD | F/C | EURO | Total | |
| ASSETS | |||||||||
| Cash and balances with Central | |||||||||
| Banks | 8,719 | 946 | 308 | 84 | 59,053 | 1,654,971 | 1,724,081 | ||
| Due from banks | 1,611,240 | 84,710 | 1,791,341 | 5,402 | 210,018 | 2 | 15,729 | 4,702,351 | 8,420,793 |
| Financial asset at fair value | |||||||||
| through profit or loss | 2,747 | 6,985 | 77,148 | 86,880 | |||||
| Derivative financial instruments | 494,386 | 494,386 | |||||||
| Loans and advances to customers 2,126,648 | 300,188 | 452,703 | 41,891 | 65,376 | 165,862 39,036,610 42,189,278 | ||||
| Investment Securities | |||||||||
| - Available-for-sale | 39,361 | 472 | 16,635 | 11,406 | 91,493 | 5,874,530 | 6,033,897 | ||
| - Held to maturity | 523,911 | 3,964,798 | 4,488,709 | ||||||
| Investments in subsidiaries, | |||||||||
| associates and joint ventures | 3,028 | 54,135 | 133,417 | 247,687 | 139,400 | 1,173,235 | 1,750,902 | ||
| Investment property | 42,195 | 42,195 | |||||||
| Property, plant and equipment | 38,609 | 610,843 | 649,452 | ||||||
| Goodwill and other intangible | |||||||||
| assets | 5,915 | 62,808 | 68,723 | ||||||
| Deferred tax assets | 316,069 | 316,069 | |||||||
| Other assets | 609 | 29,206 | 41 | 942 | (139) | 388,867 | 419,526 | ||
| Non-current assets held for sale | 53,283 | 53,283 | |||||||
| Total Assets | 4,316,263 | 469,657 | 2,261,028 | 58,783 | 409,753 | 247,689 | 522,907 58,452,094 66,738,174 | ||
| LIABILITIES | |||||||||
| Due to banks and costumers | 4,456,064 | 271,251 | 25,108 | 1,191,367 | 83 | 526,115 38,230,075 44,700,063 | |||
| Derivative financial instruments | 804,172 | 804,172 | |||||||
| Debt securities in issue and other | |||||||||
| borrowed funds | 71,743 | 1,051 | 102,390 | 240,196 | 217,313 | 139,411 16,623,542 17,395,646 | |||
| Liabilities for current income tax | |||||||||
| and other taxes | 97,855 | 97,855 | |||||||
| Deferred tax liabilities | 158,212 | 158,212 | |||||||
| Other liabilities | 2,358 | 28,453 | 220 | 537 | 549 | (6,991) 1,179,336 | 1,204,462 | ||
| Provisions | 8,415 | 8,415 | |||||||
| Total liabilities | 4,530,165 | 300,755 | 127,718 | 1,432,100 | 217,945 | 658,535 57,101,607 64,368,825 | |||
| Net on-balance sheet position | (213,902) | 168,902 | 2,133,310 | (1,373,317) | 191,808 | 247,689 | (135,628) 1,350,487 | 2,369,349 | |
| Derivatives forward foreign | |||||||||
| exchange position | 217,065 | (182,761) (2,138,687) | 1,370,877 | (230,859) | 288,157 | 696,936 | 20,728 | ||
| Total Foreign Exchange | |||||||||
| Position | 3,163 | (13,859) | (5,377) | (2,440) | (39,051) | 247,689 | 152,529 | 2,047,423 | 2,390,077 |
| Undrawn credit facilities | 61,966 | 80,190 | 17,244 | 16,752,909 | 16,912,309 |
31.12.2008
| 31.12.2007 | |||||||
|---|---|---|---|---|---|---|---|
| USD | GBP | CHF | JPY | OTHER F/C | EURO | Total | |
| ASSETS | |||||||
| Cash and balances with Central Banks | 7,463 | 1,129 | 325 | 35 | 49,814 | 1,591,561 | 1,650,327 |
| Due from banks | 541,625 | 164,192 | 1,097,502 | (4,112) | 478,149 | 5,072,319 | 7,349,675 |
| Financial asset at fair value through | |||||||
| profit or loss | 2,362 | 9,704 | 252,722 | 264,788 | |||
| Derivative financial instruments | 384,466 | 384,466 | |||||
| Loans and advances to customers | 2,053,940 | 380,546 | 374,790 | 26,385 | 110,339 | 32,321,874 | 35,267,874 |
| Investment Securities | |||||||
| - Available-for-sale | 691,101 | 96,516 | 5,512,760 | 6,300,377 | |||
| Investments in subsidiaries, associates | |||||||
| and joint ventures | 2,953 | 57,403 | 290,662 | 1,275,082 | 1,626,100 | ||
| Investment property | 42,370 | 42,370 | |||||
| Property, plant and equipment | 18,925 | 584,906 | 603,831 | ||||
| Goodwill and other intangible assets | 365 | 1,024 | 54,447 | 55,836 | |||
| Deferred tax assets | 158,160 | 158,160 | |||||
| Other assets | 5,299 | 763 | 250 | 1 | 3,275 | 271,038 | 280,626 |
| Non-current assets held for sale | 54,706 | 54,706 | |||||
| Total Assets | 3,304,743 | 604,398 | 1,472,867 | 22,309 | 1,058,408 | 47,576,411 | 54,039,136 |
| LIABILITIES | |||||||
| Due to banks and costumers | 4,136,488 | 344,069 | 14,184 | 822,950 | 602,655 | 23,052,104 | 28,972,450 |
| Derivative financial instruments | 383,129 | 383,129 | |||||
| Debt securities in issue and other | |||||||
| borrowed funds | 264,010 | 91,723 | 183,704 | 379,613 | 19,602,926 | 20,521,976 | |
| Liabilities for current income tax and other taxes |
|||||||
| Deferred tax liabilities | 127,863 | 127,863 | |||||
| 82,960 | 82,960 | ||||||
| Employee defined benefit obligations | 3,733 | 3,733 | |||||
| Other liabilities | 5,694 | 393 | 396 | 411 | 1,251 | 1,150,867 | 1,159,012 |
| Provisions | 47,796 | 47,796 | |||||
| Total liabilities | 4,406,192 | 344,462 | 106,303 | 1,007,065 | 983,519 | 44,451,378 | 51,298,919 |
| Net on-balance sheet position | (1,101,449) | 259,936 | 1,366,564 | (984,756) | 74,889 | 3,125,033 | 2,740,217 |
| Derivatives forward foreign exchange | |||||||
| position | 1,123,294 | (291,357) | (1,371,230) | 979,824 | (168,244) | (89,267) | 183,020 |
| Total Foreign Exchange Position | 21,845 | (31,421) | (4,666) | (4,932) | (93,355) | 3,035,766 | 2,923,237 |
| Undrawn credit facilities | 95,061 | 25,667 | 10,668 | 16,254,809 | 16,386,205 |
The Bank's high exposure in other currencies is primarily due to the UAH/EUR position.
The net foreign exchange position as at 31.12.2008 presents the following sensitivity analysis:
| Exchange rate variation scenario against | ||||
|---|---|---|---|---|
| Currency | Euro(%) | Impact on net income before tax | ||
| Aprreciation of USD 5% | 166 | |||
| USD | Depreciation of USD 5% | (151) | ||
| Aprreciation of GBP 5% | (729) | |||
| GBP | Depreciation of GBP 5% | 660 | ||
| Aprreciation of RON 5% | (2.055) | |||
| RON | Depreciation of RON 5% | 1.860 | ||
| Aprreciation of RSD 5% | 13.036 | |||
| RSD | Depreciation of RSD 5% | (11.795) | ||
| Aprreciation of UAH 5% | 7.337 | |||
| UAH | Depreciation of UAH 5% | (6.638) | ||
Gap analysis is performed in order to examine the interest rate risk of assets and liabilities. Assets and liabilities are allocated into time bands according to their repricing date for variable interest rate instruments, or according to their maturity date for fixed rate instruments.
GAP Analysis of assets and liabilities is set out in the table below:
| Less than 1 1 to 3 3 to 6 to 1 to More than Non-interest month months 6 months 12 months 5 years 5 years bearing Total ASSETS Cash and balances with Central Banks 1,183,095 540,986 1,724,081 Due from banks 5,004,463 1,988,461 298,011 337,239 785,503 7,116 8,420,793 Financial asset at fair value through profit or loss 4,682 68,225 3,639 4,759 5,575 86,880 Derivative financial instruments 494,386 494,386 Loans and advances to customers 22,885,207 5,617,721 4,047,395 2,285,263 6,453,809 899,883 42,189,278 Investment Securities - Available-for-sale 4,765,406 592,072 273,942 96,316 210,324 40,173 55,664 6,033,897 - Held to maturity 667,966 1,182,592 1,682,605 139,956 354,213 461,377 4,488,709 Investments in subsidiaries, associates and joint ventures 1,750,902 1,750,902 Investment property 42,195 42,195 Property, plant and equipment 649,452 649,452 Goodwill and other intangible assets 68,723 68,723 Deferred tax assets 316,069 316,069 Other assets 419,526 419,526 Non-current assets held for sale 53,283 53,283 Total Assets 35,005,205 9,380,846 6,370,178 2,862,413 7,808,608 1,414,124 3,896,800 66,738,174 Liabilities Due to banks 8,086,854 2,633,867 115,583 47,665 10,883,969 Derivatives financial instruments 804,172 804,172 Due to customers 22,936,232 6,557,914 2,448,552 1,036,960 696,545 139,891 33,816,094 Debt securities in issue and other borrowed funds 9,158,844 7,606,613 619,634 10,555 17,395,646 Liabilities for current income tax and other taxes 97,855 97,855 Deferred tax liabilities 158,212 158,212 Other liabilities 1,204,462 1,204,462 Provisions 8,415 8,415 Total Liabilities 40,986,102 16,798,394 3,183,769 1,095,180 696,545 139,891 1,468,944 64,368,825 EQUITY Share capital 1,931,590 1,931,590 Share premium Reserves 165,848 165,848 Retained earnings 340,896 340,896 Treasury shares (68,985) (68,985) 2,369,349 2,369,349 Total Equity Total Liabilities and Equity 40,986,102 16,798,394 3,183,769 1,095,180 696,545 139,891 3,838,293 66,738,174 (5,980,897) (7,417,548) 3,186,409 1,767,233 7,112,063 1,274,233 58,707 GAP (5,980,897) (13,398,445) (10,212,036) (8,444,803) (1,332,740) (58,707) CUMULATIVE GAP |
31.12.2008 | |||||
|---|---|---|---|---|---|---|
| 31.12.2007 | ||||||||
|---|---|---|---|---|---|---|---|---|
| Less than 1 month |
1 to 3 months |
3 to 6 months |
6 to 12 months |
1 to 5 years |
More than 5 years |
Non-interest bearing |
Total | |
| ASSETS | ||||||||
| Cash and balances with Central Banks | 1,273,667 | 376,660 | 1,650,327 | |||||
| Due from banks | 4,278,703 | 1,619,996 | 500,885 | 364,180 | 579,007 | 6,904 | 7,349,675 | |
| Financial asset at fair value through profit or loss |
2,147 | 1,296 | 24,326 | 1,114 | 44,081 | 191,824 | 264,788 | |
| Derivative financial instruments | 384,466 | 384,466 | ||||||
| Loans and advances to customers | 20,098,772 | 4,919,167 | 3,089,640 | 951,173 | 6,028,332 | 180,790 | 35,267,874 | |
| Investment Securities | ||||||||
| - Available-for-sale | 3,021,988 | 955,633 | 1,775,414 | 116,317 | 101,335 | 260,718 | 68,972 | 6,300,377 |
| Investments in subsidiaries, associates and joint ventures |
1,626,100 | 1,626,100 | ||||||
| Investment property | 42,370 | 42,370 | ||||||
| Property, plant and equipment | 603,831 | 603,831 | ||||||
| Goodwill and other intangible assets | 55,836 | 55,836 | ||||||
| Deferred tax assets | 158,160 | 158,160 | ||||||
| Other assets | ||||||||
| 280,626 | 280,626 | |||||||
| Non-current assets held for sale | 54,706 | 54,706 | ||||||
| Total Assets | 29,059,743 | 7,496,092 | 5,390,265 | 1,432,784 | 6,752,755 | 640,236 | 3,267,261 | 54,039,136 |
| LIABILITIES | ||||||||
| Due to banks | 3,531,555 | 1,520,321 | 557,671 | 27,884 | 131 | 5,637,562 | ||
| Derivatives financial instruments | 383,129 | 383,129 | ||||||
| Due to customers Debt securities in issue and other |
19,384,594 | 1,986,757 | 802,867 | 337,192 | 823,478 | 23,334,888 | ||
| borrowed funds | 12,237,861 | 7,727,744 | 532,051 | 20,920 | 3,400 | 20,521,976 | ||
| Liabilities for current income tax and other taxes |
127,863 | 127,863 | ||||||
| Deferred tax liabilities | 82,960 | 82,960 | ||||||
| Employee defined benefit obligations | 3,733 | 3,733 | ||||||
| Other liabilities | 1,159,012 | 1,159,012 | ||||||
| Provisions | 47,796 | 47,796 | ||||||
| Total Liabilities | 35,537,139 | 11,234,822 | 1,892,589 | 385,996 | 827,009 | 1,421,364 | 51,298,919 | |
| EQUITY | ||||||||
| Share capital | 1,602,809 | 1,602,809 | ||||||
| Share premium | 184,033 | 184,033 | ||||||
| Reserves | 333,892 | 333,892 | ||||||
| Retained earnings | 619,483 | 619,483 | ||||||
| Treasury shares | ||||||||
| Total Equity | 2,740,217 | 2,740,217 | ||||||
| Total Liabilities and Equity | 35,537,139 | 11,234,822 | 1,892,589 | 385,996 | 827,009 | 4,161,581 | 54,039,136 | |
| GAP | (6,477,396) (3,738,730) | 3,497,676 | 1,046,788 | 5,925,746 | 640,236 | (894,320) | ||
| CUMULATIVE GAP | (6,477,396) (10,216,126) | (6,718,450) | (5,671,662) | 254,084 | 894,320 |
GAP Analysis allows an immediate calculation of changes in net interest income and equity for available-for-sale securities upon application of alternative scenarios, such as changes in market interest rates or changes in the Bank's base interest rates.
| Currency | Interest rate variation scenario | Sensitivity for net interest | |
|---|---|---|---|
| (parallel fall or rise in yield curves) | income (annual) | Sensitivity of equity | |
| EUR | + 50 basis points | (3,879) | (6,361) |
| - 50 basis points | 3,879 | 6,442 | |
| USD | + 50 basis points | (2,863) | (273) |
| - 50 basis points | 2,863 | 278 | |
| GBP | + 50 basis points | (345) | (1) |
| - 50 basis points | 345 | 1 |
Liquidity risk relates to the Bank's ability to maintain sufficient funds to cover its obligations.
A substantial portion of the Bank's assets are funded with customer deposits and bonds issued by the Group. This type of funding comprises two categories:
Deposits for working capital purposes consist of savings accounts and sight deposits. Although these deposits may be withdrawn on demand, the number of the accounts and type of depositors ensure that unexpected fluctuations are limited and that these deposits constitute mostly a stable deposit base.
b) Customer deposits and bonds issued for investment purposes
Customer deposits and bonds issued for investment purposes concern customer term deposits, customer repurchase agreements (repos) and sale of bonds issued by the Group.
In accordance with Liquidity Gap Analysis, cash flows arising from all assets and liabilities are estimated and allocated into time bands, depending on when they occur, with the exception of assets held for trading and available-for-sale securities. In the case of such portfolios, which are considered liquid, they are allocated in the first period using relevant haircuts.
The Liquidity Gap Analysis is given in the table below. It should be noted that term deposits are presented with their contractual due date. On total term deposits 80% is renewed at the expiration date and therefore are considered as a part of the stable deposit base.
| 31.12.2008 | ||||||
|---|---|---|---|---|---|---|
| Less than 1 month |
1 to 3 months | 3 to 6 months |
6 to 12 months |
1 to 5 years |
More than 5 years |
|
| ASSETS | ||||||
| Cash and balances with Central Banks | 1,724,081 | 1,724,081 | ||||
| Due from banks | 2,812,374 | 1,225,127 | 226,845 | 419,363 | 3,737,084 | 8,420,793 |
| Financial assets at fair value through profit or loss |
||||||
| 82,536 | 4,344 | 86,880 | ||||
| Derivative financial instruments | 494,386 | 494,386 | ||||
| Loans and advances to customers | 1,797,686 | 1,578,429 | 1,786,873 | 2,416,257 | 34,610,033 | 42,189,278 |
| Investment Securities | ||||||
| - Available-for-sale | 5,728,769 | 305,128 | 6,033,897 | |||
| - Held to maturity Investments in subsidiaries, |
3,142,096 | 1,346,613 | 4,488,709 | |||
| associates and joint ventures | 1,750,902 | 1,750,902 | ||||
| Investment property | 42,195 | 42,195 | ||||
| Property, plant and equipment | 649,452 | 649,452 | ||||
| Goodwill and other intangible assets | 68,723 | 68,723 | ||||
| Deferred tax assets | 316,069 | 316,069 | ||||
| Other assets | 176,678 | 23,513 | 9,527 | 209,808 | 419,526 | |
| Non-current assets held for sale | 53,283 | 53,283 | ||||
| Total Assets | 15,958,606 | 2,803,556 | 2,037,231 | 2,845,147 | 43,093,634 | 66,738,174 |
| LIABILITIES | ||||||
| Due to banks | 8,080,204 | 1,729,910 | 108,834 | 420,432 | 544,589 | 10,883,969 804,172 |
| Derivatives financial instruments | 804,172 | |||||
| Due to customers | 10,691,788 | 6,830,772 | 2,920,617 | 2,019,209 | 11,353,708 | 33,816,094 |
| Debt securities in issue and other borrowed funds |
878,677 | 511,840 | 603,633 | 1,291,771 | 14,109,725 | 17,395,646 |
| Liabilities for current income tax and other taxes |
97,855 | 97,855 | ||||
| Deferred tax liabilities | 158,212 | 158,212 | ||||
| Other liabilities | 898,795 | 71,577 | 60,690 | 61,182 | 112,218 | 1,204,462 |
| Provisions | 8,415 | 8,415 | ||||
| Total Liabilities | 21,451,491 | 9,144,099 | 3,693,774 | 3,792,594 | 26,286,867 | 64,368,825 |
| EQUITY | ||||||
| Total Equity | 2,369,349 | 2,369,349 | ||||
| Total Liabilities and Equity | 21,451,491 | 9,144,099 | 3,693,774 | 3,792,594 | 28,656,216 | 66,738,174 |
| Liquidity gap | (5,492,885) | (6,340,543) | (1,656,543) | (947,447) | 14,437,418 | |
| 31.12.2007 | ||||||
|---|---|---|---|---|---|---|
| Less than 1 month |
1 to 3 months | 3 to 6 months |
6 to 12 months |
1 to 5 years |
More than 5 years |
|
| ASSETS | ||||||
| Cash and balances with Central Banks | 1,650,327 | 1,650,327 | ||||
| Due from banks | 3,168,792 | 450,145 | 443,267 | 560,924 | 2,726,547 | 7,349,675 |
| Securities held for trading | ||||||
| - Bonds | 251,549 | 13,239 | 264,788 | |||
| Derivative financial instruments | 384,466 | 384,466 | ||||
| Loans and advances to customers | 806,986 | 2,554,329 | 3,423,359 | 5,499,579 | 22,983,621 | 35,267,874 |
| Investment Securities | ||||||
| - Bonds classified in available for sale | 5,890,821 | 310,043 | 6,200,864 | |||
| - Shares classified in available for | ||||||
| sale | 89,562 | 9,951 | 99,513 | |||
| Investments in subsidiaries, associates and joint ventures |
1,626,100 | 1,626,100 | ||||
| Investment property | 42,370 | 42,370 | ||||
| Property, plant and equipment | 603,831 | 603,831 | ||||
| Goodwill and other intangible assets | 55,836 | 55,836 | ||||
| Deferred tax assets | 158,160 | 158,160 | ||||
| Other assets | 4,503 | 14,414 | 157,593 | 104,116 | 280,626 | |
| Non-current assets held for sale | 54,706 | 54,706 | ||||
| Total Assets | 12,247,006 | 3,004,474 | 3,881,040 | 6,218,096 | 28,688,520 | 54,039,136 |
| LIABILITIES | ||||||
| Due to banks | 3,526,414 | 1,051,730 | 551,096 | 32,385 | 475,937 | 5,637,562 |
| Derivatives financial instruments | 383,129 | 383,129 | ||||
| Due to customers | 5,369,299 | 2,372,011 | 1,354,136 | 1,439,499 | 12,799,943 | 23,334,888 |
| Debt securities in issue and other | ||||||
| borrowed funds | 457,103 | 42,707 | 12,576 | 698,538 | 19,311,052 | 20,521,976 |
| Liabilities for current income tax and other taxes |
19,599 | 101,880 | 6,384 | 127,863 | ||
| Deferred tax liabilities | 82,960 | 82,960 | ||||
| Employee defined benefit obligations | 3,733 | 3,733 | ||||
| Other liabilities | 983,091 | 53,830 | 33,521 | 64,493 | 24,077 | 1,159,012 |
| Provisions | 47,796 | 47,796 | ||||
| Total Liabilities | 10,738,635 | 3,520,278 | 2,053,209 | 2,241,299 | 32,745,498 | 51,298,919 |
| EQUITY | ||||||
| Total Equity | 2,740,217 | 2,740,217 | ||||
| Total Liabilities and Equity | 10,738,635 | 3,520,278 | 2,053,209 | 2,241,299 | 35,485,715 | 54,039,136 |
| Liquidity gap | 1,508,371 | (515,804) | 1,827,831 | 3,976,797 | (6,797,195) | |
The financial liabilities cash flows including derivatives financial liabilities are allocated according to the remaining maturities. Estimated interest payments are also included. Liabilities in foreign currency have been translated into Euro. Specifically for derivatives outflows and inflows analysis is done according to contractual terms.
| Total Balance | 2 to | 4 to | 7 to | more than | |||
|---|---|---|---|---|---|---|---|
| Sheet | To 1 month | 3 months | 6 months | 12 months | 1 year | TOTAL | |
| Liabilities - non-derivative | |||||||
| Due to banks | 10,883,969 | (8,112,793) | (1,726,252) | (151,038) | (474,440) | (522,207) | (10,986,730) |
| Due to customers | 33,816,094 | (10,682,346) | (6,899,492) | (3,057,899) | (2,150,793) | (11,536,005) | (34,326,535) |
| Debt securities in issue and other | |||||||
| borrowed funds | 17,395,646 | (772,548) | (715,458) | (967,054) | (1,812,461) | (16,595,546) | (20,863,067) |
| Other liabilities | 1,204,462 | (898,795) | (71,577) | (60,690) | (61,182) | (112,218) | (1,204,462) |
| Derivatives held for liabilities | |||||||
| fair value hedge | 47,551 | ||||||
| - Outflows | (1,370) | (7,392) | (9,935) | (23,734) | (355,462) | (397,893) | |
| - Inflows | 946 | 9,015 | 8,404 | 22,287 | 423,027 | 463,679 | |
| Derivatives held for assets fair | |||||||
| value hedge | 242,103 | ||||||
| - Outflows | (47,341) | (20,198) | (1,251,662) | (1,319,201) | |||
| - Inflows | 5,266 | 8,971 | 16,381 | 33,500 | 1,209,035 | 1,273,153 | |
| Derivatives held for trading | 514,518 | ||||||
| - Outflows | (2,042,892) | (1,477,314) | (148,858) | (253,383) | (1,536,746) | (5,459,193) | |
| - Inflows | 1,953,548 | 1,386,812 | 132,291 | 233,112 | 1,573,500 | 5,279,263 | |
| Total | 64,104,343 | (20,550,984) | (9,492,687) | (4,285,739) | (4,507,292) | (28,704,284) | (67,540,986) |
| Off Balance sheet items | |||||||
| Unrecognized loans commitments | (601,320) | (601,320) | |||||
| Financial guarantees | (84,104) | (26,682) | (11,986) | (11,651) | (95,223) | (229,646) | |
| Total off Balance sheet items | (685,424) | (26,682) | (11,986) | (11,651) | (95,223) | (830,966) |
| Nominal in flow/(outflow) | ||||||||
|---|---|---|---|---|---|---|---|---|
| Total Balance Sheet |
To 1 month | 2 to 3 months |
4 to 6 months |
7 to 12 months |
more than 1 year |
TOTAL | ||
| Liabilities - non-derivative | ||||||||
| Due to banks | 5,637,562 | (3,529,678) | (1,063,807) | (569,914) | (47,470) | (521,350) | (5,732,219) | |
| Due to customers | 23,334,888 | (5,307,148) | (2,390,802) | (1,498,454) | (1,564,664) | (12,794,445) | (23,555,513) | |
| Debt securities in issue and other | ||||||||
| borrowed funds | 20,521,976 | (484,301) | (213,314) | (218,814) | (1,063,621) | (23,435,353) | (25,415,403) | |
| Other liabilities | 1,159,012 | (983,089) | (53,830) | (33,521) | (64,493) | (24,079) | (1,159,012) | |
| Derivatives held for liabilities | ||||||||
| fair value hedge | 103,670 | |||||||
| - Outflows | (2,618) | (14,647) | (6,575) | (19,459) | (811,865) | (855,164) | ||
| - Inflows | 2,825 | 13,540 | 4,102 | 14,833 | 707,756 | 743,056 | ||
| Derivatives held for assets fair | ||||||||
| value hedge | 44,160 | |||||||
| - Outflows | (48,430) | (8,431) | (1,202,158) | (1,259,019) | ||||
| - Inflows | 7,810 | 5,839 | 13,598 | 27,061 | 1,158,024 | 1,212,332 | ||
| Derivatives held for trading | 235,299 | |||||||
| - Outflows | (1,952,215) | (220,187) | (258,722) | (134,078) | (865,372) | (3,430,574) | ||
| - Inflows | 1,884,358 | 233,443 | 242,887 | 118,263 | 702,219 | 3,181,170 | ||
| Total | 51,036,567 | (10,364,056) | (3,703,765) | (2,373,843) | (2,742,059) | (37,086,623) | (56,270,346) | |
| Off Balance sheet items | ||||||||
| Unrecognized loans commitments | (531,063) | (531,063) | ||||||
| Financial guarantees | (57,532) | (32,597) | (12,626) | (14,166) | (75,203) | (195,124) | ||
| Total off Balance sheet items | (588,595) | (32,597) | (12,626) | (14,166) | (75,203) | (726,187) |
The table below presents the carrying amounts and the fair values of financial assets and liabilities which are not carried at fair value in the financial statements. For the remaining financial assets and liabilities carried at amortized cost the fair values are not substantially different from carrying amounts.
The fair value of loans is estimated based on the interbank market yield curves adjusted with the credit spread of loans.
The fair value of deposits is estimated based on the interbank market yield curves deducted with customers spread depending on form of the deposit.
Both loans and deposits future cash flows are discounted based on their duration and the respective interest rates.
| 31.12.2008 | |||||||
|---|---|---|---|---|---|---|---|
| Carrying amount | Fair value | ||||||
| ASSETS | |||||||
| Loans and advances to customers | 42,189,278 | 43,010,559 | |||||
| LIABILITIES | |||||||
| Due to customers | 33,816,094 33,903,163 |
The policy of the Bank is to maintain a strong capital base so as to maintain investors, creditor and market confidence and to sustain future development of the business.
The dividend policy is always examined in order to achieve the best balance between the higher return for the shareholder and the security affected by the sound capital position.
Share capital increases are performed through Shareholders General Meeting or Board of Directors decisions in accordance with articles of association or relevant laws.
Specifically, the Shareholders' General Meeting held on 6 June 2006 gave the authority to the Board of Directors for the period of four years to approve a share capital increase in accordance with Law 2190/1920 article 13.
The Bank is allowed to purchase treasury shares based on the terms and conditions of law.
The Bank uses all modern methods to manage capital adequacy. It has issued hybrid and subordinated debt which are included as regulatory own-funds. The cost of these securities is lower than share capital and adds value to the shareholders.
The Bank capital adequacy is monitored by the Bank of Greece to which the Bank reports on a quarterly basis.
The minimum capital adequacy ratios (Tier I and capital adequacy ratio) which the Bank must adhere to are established by decisions of the Governor of the Bank of Greece.
The calculation of capital adequacy from 1 January 2008 is determined under the new regulatory framework (Basel II), which have been transposed into Greek law by Law 3601/2007. The new regulatory framework significantly amends the measurement of credit risk and introduces capital requirements for operational risk. There are no significant changes in the measurement of market risk. Specifically, credit risk of the investment portfolio and operational risk are measured based on the Standardized Approach.
The capital adequacy ratio is determined by comparing the Bank's regulatory own funds with the risks that the Bank undertakes (risk weighted assets). Own funds include Tier I capital (share capital, reserves), additional Tier I capital (hybrid securities) and Tier II capital (subordinated debt and fixed asset revaluation reserves). The risk-weighted assets arise from the credit risk of the investment portfolio, the market risk of the trading portfolio and the operational risk.
The current capital ratios (Tier I ratio and capital adequacy ratio) are much higher than the regulatory limits set by the Bank of Greece directive (4% and 8%, respectively) and the capital base is capable to support the business growth of the Bank in all areas for the next years.
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Basel ΙΙ | Basel Ι | |
| Tier I ratio | 7.8% | 6.5% |
| Capital adequacy ratio (Tier I + Tier II) | 9.6% | 12.0% |
The Bank enters into a number of transactions with related parties in the normal course of business. These transactions are performed at arms length and are approved by relevant Bank committees.
a. The outstanding balances of the transactions with members of the Board of Directors, their close family members and the controlled by these entities are as follows:
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Assets | ||
| Loans and advances to customers | 166,137 | 38,649 |
| Liabilities | ||
| Due to customers | 71,915 | 43,123 |
| Letters of guarantee | 21,392 | 83 |
| From 1 January to | ||
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Interest and similar income | 10,142 | 432 |
| Interest expense and similar charges | 2,760 | 1,131 |
b. The outstanding balances with subsidiaries and associates and the related results of these transactions are as follows:
| 31.12.2008 | 31.12.2007 | |
|---|---|---|
| Assets | ||
| Due from banks | 5,803,055 | 4,114,320 |
| Financial assets at fair value through profit or loss | 12,486 | 8,075 |
| Derivative financial assets | 10,330 | 2,003 |
| Loans and advances to customers (1) | 1,933,878 | 1,527,856 |
| Available-for-sale securities | 5,555,443 | 3,368,618 |
| Other assets | 511 | |
| Total | 13,315,703 | 9,020,872 |
| Liabilities | ||
| Due to banks | 2,183,803 | 1,574,301 |
| Due to customers | 132,323 | 101,128 |
| Derivative financial liabilities | 778 | 87 |
| Debt securities in issue and other borrowed funds | 17,395,646 | 20,521,976 |
| Other liabilities | 2,260 | 1,196 |
| Total | 19,714,810 | 22,198,688 |
| Letters of guarantee and other guarantees | 1,010,387 | 1,001,394 |
| From 1 January to | ||
|---|---|---|
| 31.12.2008 | 31.12.2007 | |
| Income | ||
| Interest and similar income | 515,650 | 247,092 |
| Dividend income | 72,897 | 43,915 |
| Fee and commission income | 36,712 | 51,356 |
| Gains less losses on financial transactions | 84,297 | |
| Other income | 2,558 | 3,006 |
| Total | 712,114 | 345,369 |
| Expenses | ||
| Interest expenses and similar charges | 1,098,889 | 923,556 |
| Commission expense | 821 | 1,374 |
| General administrative expenses | 12,664 | 13,169 |
| Total | 1,112,374 | 938,099 |
(1) In "loans and advances to customers" are included € 131,382 from the off-setting of debt securities of "Alpha Covered Bond Plc" .and "Katanalotika Plc" held by the Bank, assets and liabilities from the securitization of mortgage and consumer loans, as well as the outstanding loans granted by the Bank to the above companies.
| 31.12.2008 | 31.12.2007 | |||||
|---|---|---|---|---|---|---|
| Assets | ||||||
| Loans and advances to customers | 277 | |||||
| Liabilities | ||||||
| Due to customers | 406 | 26 | ||||
| From 1 January to | ||||||
| 31.12.2008 | 31.12.2007 | |||||
| Income | ||||||
| Interest and similar income | 16 | 33 | ||||
| Dividend income | 11 | 9 | ||||
| Total | 27 | 42 | ||||
| Expenses | ||||||
| Interest and similar expenses | 2 | |||||
| Total | 2 |
c. The Board of Directors and Executive General Managers' fees recorded in the income statement of 2008 amounted to € 4,962 (31.12.2007: € 19,590).
a. On 4 April 2008 the Bank acquired 90% of the newly established ukrainian bank Astra Bank OJSC at a cost of € 10.9 million. The Bank agreed with the founders of Astra Bank that they will hold a stake up to 10% of the share capital and will remain as executive members of management.
b. On 8 May 2008 the Bank participated in the share capital increase of Alpha Bank Srbija A.D. by € 49.8 million.
c. On 21 May 2008 the Bank acquired 847 shares of APE Commercial Property. After the acquisition the Bank's interest in APE Commercial Property was 72.20%.
d. On 2 June 2008 the Mutual Fund ALPHA-TANEO A.K.E.S., was established. The Bank holds a 51% ownership interest.
e. On 30 June 2008 the Bank participated in Astra Bank OJSC share capital increase at the total amount of € 126.4 million plus expenses. After this share capital increase, the interest is 93.33%.
f. On 2 July 2008 Alpha Covered Bonds Plc was established in United Kingdom by the Bank (which has 100% ownership interest) with primary activity the issuance of covered bonds.
g. On 15 August 2008 the Bank sold its participation in "Anadolu Alpha Gayrimenkul Ticaret A.S." or 50% of the share capital, to the other shareholder of Anadolu Group. No profit or loss resulted from the sale.
h. On 8 December 2008 the Bank participated in the share capital increase of Alpha Bank Romania by € 20 million.
i. On 18 December 2008 the Bank participated in the share capital increase of Evremethea A.E. by € 990 thousands.
j. On 19 December 2008 the Bank sold its participation in Alpha Astika Akinita A.E. and Ionian Hotel Enterprises A.E. to the subsidiary Alpha Group Investments Ltd.
k. On 29 December 2008 the Bank participated in the share capital increase of APE Commercial Property A.E. by € 3,8million.
l. On 31 December 2008 the Bank participated in the share capital increase of APE Fixed Assets A.E. by € 3 million.
1. Based on the approved by the general meeting of shareholders held on 3.4.2008 share buy back program, the Bank acquired during 1.1.2009 up to 16.2.2009 457,601 treasury shares at a cost of € 2,666 (or € 5.83 per share).
As at 16.2.2009 the Bank holds 6,140,959 tresury shares at a total cost of € 71,650 or 1.49% of its issued share capital.
2. On 16 December 2008, the Board of Director has decided the Bank's participation, proportionally, to the regulations of law 3723/2008 enhancing economy's liquidity to address the impact of credit crunch.
In this context, on 12 January 2009 in the Bank's extraordinary General Meeting of Shareholders approved:
3. On 17.2.2009 was completed successfully the securitization of part of Bank's bonds portfolio amounting to € 1.25 billion, through a special purpose entity Talanto PLC. A part of the bonds which have received a A1 rating from the Moody's credit rating agency amounts to € 811 million and is accepted by the European Central Bank as collateral for refinancing operations.
4. The Board of Directors' intention was to propose a cash dividend for the year 2008, as per the provisions of Law 3723/2008. However, in light of the forthcoming legislative amendments regarding the distribution of dividend, the Board of Directors will suspend any decision on the distribution of dividend until the Annual General Meeting of Shareholders, by which time it expects to be in a position to formulate its final proposal.
| Athens, 24 February 2009 | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| The Managing Director | The Executive Director | Group Financial Reporting Officer |
|||||||||
| Demetrios P. Mantzounis I.D. No. Ι 166670 |
Marinos S. Yannopoulos I.D. No. Ν 308546 |
George N. Kontos I.D. No. AB 522299 |
|||||||||
| INDEPENDENT MEMBERS George E. Agouridis Pavlos A. Apostolides Evangelos J. Calousis Thanos M. Veremis NON-EXECUTIVE Ioannis K. Lyras |
NON-EXECUTIVE MEMBERS Sophia G. Eleftheroudaki Ioanna E. Papadopoulou Nicholaos I. Manessis Paul G. Karakostas |
From 1 January to Alpha Bank From 1 January to Consolidated |
(1,320,595) 31.12.2007 5,772,620 31.12.2008 (5, 104, 982) 31.12.2007 |
(1,320,595) 1,081,217 (4,629,371) 5,772,620 (5, 104, 982) 4,270,234 |
(12,601) 1,081,217 (4,629,371) (962, 292) (109, 819) 160,700 4,430,934 |
(12,601) (251, 979) (962, 292) 180,957 (109, 819) (783, 867) |
(251,479) 500 1,239 182,196 (783, 800) 67 |
4,608,407 4,356,928 4,356,928 4,539,124 4,575,831 3,792,031 |
Alpha Bank Consolidated |
31,12,2007 From 1 January to 31.12.2008 31.12.2007 From 1 January to |
2,435,836 126,825 2,740,217 33,739 123,054 3,613,667 33,655 |
(48, 196) 200 (247, 883) (130) (38,613) 68 |
78,829 457,006 (214, 274) 334,238 84,509 851,086 |
61,605 61,605 |
(2,204) (15,008) (2,204) (6,410) |
(304, 421) (362, 199) (305, 498) (52,996) |
11,466 (123,276) 54,508 |
ξ 2,740,217 (3,153) 2,369,349 (609) 4,291,264 (1,998) |
||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Marinos S. Yannopoulos (CFO) EXECUTIVE DIRECTORS AND Artemis Ch. Theodoridis GENERAL MANAGERS (Executive Members) Spyros N. Filaretos |
2,888,383 31.12.2008 |
(2.728.334) 2,888,383 |
(855, 188) (2,728,334) |
(855, 188) (695, 139) |
(83,256) (778, 395) |
3,013,636 3,792,031 |
31.12.2008 | 4,291,264 | (205, 653) (132, 924) |
(304, 922) 513,447 |
(362,731) (58,575) |
(127, 174) | 3,940,697 | |||||||
| The financial reformation set out bed a presentation of the financial position and read the fact that Comparison the recommend to the reader, before any investment decision or transaction is performed with the Bank, where (In accordance with Codified Law 2190/20 article 135, concerning businesses that prepare annual financial statements, consolidated or not, in accordance with International Accounting Standards, I.A.S.) FINANCIAL STATEMENTS AND INFORMATION OF ALPHA BANK A.E. AND THE GROUP MEMBERS OF THE BOARD OF DIRECTORS: (Non-Executive Independent Member) CHAIRMAN (Executive Member) Demetrios P. Mantzounis MANAGING DIRECTOR Yannis S. Costopoulos Executive Member) VICE CHAIRMAN Minas G. Tanes for the period from January 1, 2008 to December 31, 2008 (Amounts in thousands of $\epsilon$ ) |
CASH FLOW STATEMENT | Net cash flows from continuing operating activities | Net cash flows from discontinued operating activities Net cash flows from continuing investing activities Net cash flows from operating activities (a) |
Net cash flows from discontinued investing activities Net cash flows from continuing financing activities Net cash flows from investing activities (b) |
Net increase / (decrease) in cash and cash equivalents of the period $(a) + (b) + (c)$ Net cash flows from discontinued financing activities Net cash flows from financing activities (c) |
Effect of exchange rate fluctuations on cash and cash equivalents Total cash flows for the period |
Cash and cash equivalents at the beginning of the fiscal year Cash and cash equivalents at the end of the fiscal year |
STATEMENT OF CHANGES IN EQUITY | Net change in fair value of available for sale securities transferred to income statement (a) Equity at the beginning of the fiscal year (1.1.2008 and 1.1.2007 respectively) |
Exchange differences on translating foreign operations (c) Net change in fair value of available for sale securities (b) |
Net income recognized directly in equity $(a) + (b) + (c)$ Net income for the fiscal year after income tax |
Share capital increase | Change of ownership interests in subsidiaries Expenses for share capital increase |
Dividends paid to hybrid securities holders Dividends distributed |
Purchases / sales of treasury shares and hybrid securities | Equity at the end of the fiscal year (31.12.2008 and 31.12.2007 respectively) Other |
||||
| 31.12.2007 Alpha Bank |
7,349,675 1,650,327 |
264,788 384,466 35,267,874 |
1,626,100 6,300,377 |
42,370 603,831 |
158,160 55,836 280,626 53,984,430 |
54,706 54,039,136 |
5,637,562 383,129 23,334,888 |
20,521,976 | 82,960 127,863 |
3,733 1,159,012 47,796 |
51,298,919 | 51,298,919 | 1,602,809 184,033 |
333,892 619,483 |
2,740,217 | 54,039,136 2,740,217 |
||||
| 31.12.2008 | 8,420,793 1,724,081 |
86,880 494,386 42,189,278 |
4,488,709 6,033,897 |
42,195 1,750,902 649,452 |
316,069 68,723 419,526 66,684,891 |
66,738,174 53,283 |
10,883,969 804,172 33,816,094 |
17,395,646 | 97,855 158,212 |
8,415 1,204,462 |
64,368,825 | 64,368,825 | 1,931,590 | 165,848 340,896 |
(68,985) 2,369,349 |
66,738,174 2,369,349 |
||||
| 18701) | 31.12.2007 | 3,263,612 3,509,696 |
266,047 383,432 42,072,071 |
3,156,901 | 5,320 73,560 173,275 |
134,497 170,257 385,676 |
89,945 54,684,289 $\frac{4}{3}$ |
384,139 437,736 ,665,158 $\frac{34}{5}$ |
189,297 ø |
158,797 50°/6 |
42,019 95,935 323,554 |
391,442 1,583 $\frac{5}{2}$ |
50,393,025 | 602,809 184,033 |
445,662 1,138,195 |
(188) 1370,511 |
887,894 | 4,291,264 54,684,289 |
||
| Bank of Greece, Ministry of Development Marios T. Kyriacou (A.M. SOEL 11121) 40 Stadiou Street, 102 52 Athens Nick E. Vouniseas (A.M. SOEL KPMG Certified Auditors S.A. Unqualified opinion February 24, 2009 6066/06/B/86/05 www.alpha.gr |
Consolidated 31.12.2008 |
2,829,970 3,450,947 |
81,135 485.026 50,704,702 |
752,526 4,488,709 |
59,260 1,254,240 66,875 |
549,299 333,499 159,961 |
53,805 65,269,954 |
8,963,796 805,346 42,546,777 |
7,241,185 | 197,779 128,062 |
53,263 42,762 1,350,287 |
61,329,257 | 61,329,257 | 1,931,590 | 188,404 969,815 |
(68,985) 3,020,824 |
887,306 32,567 |
3,940,697 65,269,954 |
||
| by the Board of Directors: (from which the financial statements and Information were derived): Date of approval of the Financial Statements INFORMATION OF ALPHA BANK Type of Auditor's Report: Web site address: Supervising authority: Certified Auditors: Registered office: Audit company: R.N.S.A. |
BALANCE SHEET | Cash and balances with Central Banks Due from banks ASSETS |
Financial assets at fair value through profit or loss Loans and advances to customers Derivative financial assets - Held for trading |
Investments in subsidiaries, associates and joint ventures Investment securities - Available for sale - Held to maturity |
Property, plant and equipment Investments in associates Investment property |
Goodwill and other intangible assets Deferred tax assets Other assets |
Non-current assets held for sale Total Assets |
(including debt securities in issue) Derivative financial liabilities Due to customers LIABILITIES Due to banks |
Debt securities in issue held by institutional investors and other borrowed funds |
Liabilities for current income tax and other taxes Deferred tax liabilities |
Employee defined benefit obligations Other liabilities Provisions |
Liabilities related to non-current assets held for sale | Total Liabilities (a) EQUITY |
Share premium Share Capital |
Retained earnings Reserves |
Equity attributable to equity holders of the Bank Treasury shares |
Minority interest Hybrid securities |
Total Liabilities and Equity $(a) + (b)$ Total Equity (b) |
| * New company: The company Addit Substituted by the Bank and the substituted by the problem of the facture of the first time on 200.000. The company Alpha Coursed Bonde Fig. Tourised by the Bank and Link Substituted by Alp |
of 100% of Tourist Resorts A.E., owner of Hilton Rhodes Resort to the Greek Hotel Company Lampsa S.A. and to Plaka S.A. by 50% respectively | 3. In the consolided financial demonstrational commercial Bank of London Canal Canal Canal Action, as well as the companies Singular Hospital Scale (SHS AE), HSD Europe BV and Philas AE, which are fully impaired and are un | Financial Statements as at 3.1.12.2008 of the Boark and the Group respectively. attements of the Group and the Boark. The Group has rated a provision for them which and the Statement of the Boark amount to 6 49.1 million a |
. With members of the Board of Decket Alb (management personerie) and the Coupon constant of the Substant of the Board of the Board Substant, Responding E 71,955 thousand, and a guarantee E 21,992 thousand. 1. With other a |
REPORTING OFFICER GROUP FINANCIAL |
GEORGE N. KONTOS I.D. No. AB 522299 |
||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| 31.12.2007 | 3,106,845 (1,879,187) |
1,227,658 949,359 |
$\begin{array}{r} (27,480) \ \hline 321,919 \ \hline 45,462 \ (42,833) \end{array}$ | 37,507 34,878 |
1,587,084 (386,694) (338,490) |
$(51,186)$ $(2,486)$ |
$(778,856)$ (194,587) |
(194, 587) | (156, 635) 613,641 |
457.006 | 1.1270 1.1250 |
0.9000 | THE EXECUTIVE DIRECTOR | MARINOS S. YANNOPOULOS I.D. No. N 308546 |
||||||||||||||||||
| Alpha Bank | From 1 January to | 31.12.2008 | 4,118,961 (2,768,455) 1,350,506 346,494 |
(29, 418) | 317,076 74,937 (20, 584) |
21,138 75,491 |
743,073 | (362, 411) (57, 592) |
(3,072) | (495,382) (852, 288) |
(495, 382) | (61, 165) 395,403 |
334.238 | 0.8240 0.8240 |
||||||||||||||||||
| Total | 3,407,585 (1,801,472) |
606,113 508,060 |
(43,061) | 464,999 82,542 |
85,005 169,801 |
2,240,913 | (417,836) (78, 493) |
(3,903) | (1,029,505) (226,683) 1,220 |
(225, 463) | (214,986) 985,945 |
851,086 80.127 |
850,035 1,051 |
2.0925 2.0963 |
Athens, 24 February 2009 | |||||||||||||||||
| 31,12,2007 | Discontinued operations |
860 | 860 Ş |
409 | 3,573 | 4,842 (2,338) |
(1,583) (239) |
(4, 160) | (421) 682 |
80,127 80.388 |
80,388 | 0.1983 0.1979 |
||||||||||||||||||||
| Consolidated | From 1 January to | operations Continued |
3,406,725 (1,801,472) |
1,605,253 | (43,061) | 464,590 82,542 |
166,228 81,432 |
2,236,071 | (416,253) (78, 254) |
(3,903) | (226, 683) (1,025,345) 1,220 |
(225, 463) | (214, 565) 985,263 |
770,698 | 769,647 1.051 |
1,8980 1.8946 |
Bank: income € 712,141 thousand, expenses € 1,112,376 thousand | THE MANAGING DIRECTOR | DEMETRIOS P. MANTZOUNIS | |||||||||||||
| 31.12.2008 | 4,406,935 (2,608,333) 1,798,602 505,039 |
(40,625) | 464,414 (6,848) |
79,944 | 2,338,703 2,338,703 (S89,488) |
(495, 623) (88, 949) |
(4,256) | $(1,178,316)$ $(541,751)$ 6,997 |
(534,754) (534,754) 625,633 |
(112, 186) | 513.447 | 1,380 512,067 |
1.2624 1.2624 |
as described above. at 31.12.2008 |
follows: | |||||||||||||||||
| INCOME STATEMENT | Interest and similar income | Interest expense and similar charges Fee and commission income Net interest income |
Commission expense | Net fee and commission income Dividend income |
Gains less losses from financial transactions Other income |
Total income | Depreciation and amortization expenses General administrative expenses Staff costs |
Other expenses | Impairment losses and provisions for credit risk Share of profit / (loss) of associates Total expenses |
Profit before income tax | Income tax | Profit from the sale of Alpha Insurance A.E. Profit after income tax |
Equity holders of the Bank Profit attributable to: Minority interest |
Earnings per share: Basic (€ per share) |
Diluted (E per share) Proposed dividend for the year 2008 (E per share) Dividend for the year 2007 (E per share) |
ADDITIONAL DATA AND INFORMATION | 1. Companies in the consolidated financial statements, other than "Alpha Buys participation in the matrix" and the method of consolidation which was spylled, is presented in note 40 of the Group Financial Statements as at | • Sales/Liquidations: On 26.3.2008, the subsidiary Ionian Hotel Enterprises A.E. completed the transfer In Concerning companies consistance under the proposition of the subsidiary investments B.V. was liquidated. In Concer |
+ Seles: On 15.8.2008 the Bank sold its participation in "Anadolu Alpha Gasyrimenkul Travet A.S.", or 50% of the share capital, to the other shareholder of Anadolu Group The company Alpha - TANEO A.K.E.S., in which the Bank holds a 51% ownership interest was consolidated for the first time on 30.6.2008. · New companies: |
c. Concerning companies accounted for under the equity method: • New companies: On 21.5.2008, the Group recognized its participation to the associate ELP.ET. Balkaniki S.A. |
4. A description of the discontinued operations is presented in note 11 of the Group Financial Statements as 5. The net income recognized directly in equity is extensively referred at the "Statement of changes in equity |
8. The number of teasury shares held by the Bank as at 11.2.2008 is 683.833 at a cot of € 68,985 thousand. The other compares of the compares of the mean a province. 9. The total number of employees of the Group as a 31.12 6. The unaudited tax years of the Bank and the Group companies are mentioned in notes 37b and 39b of the 7. There are no pending legal cases or issues in progress, which may have a material impact on the financial |
+ Vith members of the Board of Directors and other key management personnel: a) of the Group: income of a group of the Sanch and the Sanch more of 10,142 thousand, expenses 6.7,722 thousand | . With other related parties: a) of the Group: income € 16 thousand, expenses € 3,175 thousand b) of the The balances as at 31.12.2008 of the receivables and liabilities arising from the above transactions are as f |
of Shareholders, by which time it expects to be in a position to formulate its final proposal. | OF THE BOARD OF DIRECTORS THE CHAIRMAN |
YANNIS S. COSTOPOULOS I.D. No. X 661480 |
The Corporate announcements of the year 2008 are available on the web site of the Bank www.alpha.gr/page/default.asp?id=5695&la=2
Purchase of treasury shares 01.07.2008
Purchases in the interim share buyback period 30.06.2008 Completion of the sale of treasury shares 30.06.2008
Sale of treasury shares 27.06.2008
183
| Termination of the interim share buyback period | 27.06.2008 |
|---|---|
| Q1 2008 Results. | 27.05.2008 |
| Notification about a significant change in the number of voting rights according to Law | |
| 3556/2007 [27.5.2008] | 27.05.2008 |
| Resolutions and Results of the Second General Meeting of Shareholders, held to decide upon postponed items from the Ordinary General Meeting, of Alpha Bank on 13.5.2008 (article 278 |
|
| of the ATHEX Regulations) | 13.05.2008 |
| Second General Meeting of the Shareholders of Alpha Bank on May 13, 2008 | 13.05.2008 |
| First Quarter 2008 Results announcement scheduled for 27 Μay 2008 | 13.05.2008 |
| Notification of important changes concerning the voting rights deriving from shares under | |
| L.3556/2007 | 12.05.2008 |
| Share Capital Increase through an adjustment of the Nominal Value of the Shares | 07.05.2008 |
| Invitation to the Second General Meeting of Shareholders to decide upon postponed items | |
| from the Ordinary General Meeting | 24.04.2008 |
| Resolutions and Results of the First General Meeting of Shareholders, held to decide upon | |
| postponed items from the Ordinary General Meeting, of Alpha Bank on 23.4.2008 (article 278 of the ATHEX Regulations) |
23.04.2008 |
| First General Meeting of the Shareholders of Alpha Bank | 23.04.2008 |
| Notification of important changes concerning the voting rights deriving from shares under | |
| L.3556/2007 | 21.04.2008 |
| Purchase of treasury shares | 04.04.2008 |
| Completion of the acquisition of 90% of the share capital of OJSC Astra Bank | 04.04.2008 |
| Appointment of two independent members of the Board of Directors, among the existing non | |
| executive members and election of a new member of the Board of Directors | 04.04.2008 |
| Resolutions and Results of the Ordinary General Meeting of Shareholders of Alpha Bank on | |
| 3.4.2008 (article 278 of the ATHEX Regulations) | 04.04.2008 |
| Invitation to the First General Meeting of Shareholders to decide upon postponed items from | |
| the Ordinary General Meeting | 04.04.2008 |
| Purchase of treasury shares | 03.04.2008 |
| Distribution of dividend | 03.04.2008 |
| Annual General Meeting of the Shareholders of Alpha Bank 2008. Euro 0.90 dividend per share, | |
| payable April 15, 2008 Notification of important changes concerning the voting rights deriving from shares under |
03.04.2008 |
| l.3556/2007 | 01.04.2008 |
| Alpha Bank enters the Ukrainian market | 27.03.2008 |
| Invitation to the Ordinary General Meeting of Shareholders | 11.03.2008 |
| Financial Calendar | 27.02.2008 |
| Full Year 2007 Results. | 26.02.2008 |
| New Interest Rates from Alpha Bank | 22.02.2008 |
| Full Year 2007 results announcement scheduled for 26 February 2008 | 13.02.2008 |
| Purchase of treasury shares | 04.01.2008 |
The Annual Financial Report which includes the Statement of the Board of Directors, the Annual Financial Statements of the Bank and the Group, Independent Auditors' Report, Board of Directors' Report and the financial information of the Bank and the Group, are available on the website address: http://www.alpha.gr/page/default.asp?la=2&id=6081
The Annual Financial Statements, Independent Auditors' report and the Board of Directors' Report of consolidated companies are available on the website address: http://www.alpha.gr/page/default.asp?la=1&id=6628
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