Eurobank Ergasias Services and Holdings S.A.

Quarterly Report • Nov 17, 2016

EUROBANK ERGASIAS S.A.

FOR THE NINE MONTHS ENDED

30 SEPTEMBER 2016

8 Othonos Street, Athens 105 57, Greece www.eurobank.gr, Tel.: (+30) 210 333 7000 General Commercial Registry Νο: 000223001000

Index to the Condensed Consolidated Interim Financial Statements Page
Consolidated Interim Balance Sheet1
Consolidated Interim Income Statement 2
Consolidated Interim Statement of Comprehensive Income 3
Consolidated Interim Statement of Changes in Equity4
Consolidated Interim Cash Flow Statement 5

1.	General information 6
2.	Principal accounting policies6
3.	Critical accounting estimates and judgments in applying accounting policies9
4.	Greek Economy Liquidity Support Program9
5.	Credit exposure to Greek sovereign debt9
6.	Capital management10
7.	Segment information11
8.	Earnings per share 14
9.	Operating expenses15
10.	Impairment allowance for loans and advances to customers15
11.	Other impairments and restructuring costs 16
12.	Income tax and tax adjustments17
13.	Discontinued operations20
14.	Loans and advances to customers22
15.	Investment securities23
16.	Investment property24
17.	Shares in subsidiary undertakings 25
18.	Other assets27
19.	Due to central banks28
20.	Due to credit institutions28
21.	Due to customers29
22.	Debt securities in issue 29
23.	Other liabilities 30
24.	Ordinary share capital, share premium and treasury shares30
25.	Preference shares31
26.	Preferred securities 32
27.	Fair value of financial assets and liabilities32
28.	Cash and cash equivalents and other information on Interim Cash Flow Statement36
29.	Contingent liabilities and commitments36
30.	Acquisition of Alpha Bank's Branch in Bulgaria by Eurobank Bulgaria A.D37
31.	Other significant and post balance sheet events37
32.	Related parties39
33.	Board of Directors40

Consolidated Interim Balance Sheet

		30 September	31 December
		2016	2015
	Note	€ million	€ million
ASSETS
Cash and balances with central banks		1,670	1,798
Due from credit institutions		2,852	2,808
Financial instruments at fair value through profit or loss		44	100
Derivative financial instruments		2,197	1,884
Loans and advances to customers	14	39,117	39,893
Investment securities	15	13,576	16,291
Property, plant and equipment		645	666
Investment property	16	913	925
Intangible assets		138	127
Deferred tax assets	12	4,876	4,859
Other assets	18	2,083	2,151
Assets of disposal groups classified as held for sale	13	89	2,051
Total assets		68,200	73,553
LIABILITIES
Due to central banks	19	16,829	25,267
Due to credit institutions	20	7,147	4,516
Derivative financial instruments		2,753	2,359
Due to customers	21	33,368	31,446
Debt securities in issue	22	103	150
Other liabilities	23	663	742
Liabilities of disposal groups classified as held for sale	13	101	1,941
Total liabilities		60,964	66,421
EQUITY
Ordinary share capital Share premium	24 24	656 8,056	656 8,055
Reserves and retained earnings		(3,133)	(3,241)
Preference shares	25	950	950
Total equity attributable to shareholders of the Bank		6,529	6,420
Preferred securities Non controlling interests	26	43 664	43 669
Total equity		7,236	7,132
Total equity and liabilities		68,200	73,553

Consolidated Interim Income Statement

		Nine months ended 30 September Three months ended 30 September
		2016	2015	2016	2015
	Note	€ million	€ million	€ million	€ million
Net interest income		1,159	1,088	388	360
Net banking fee and commission income		175	143	63	34
Income from non banking services		40	39	13	14
Dividend income		2	2	1	1
Net trading income		(4)	39	4	51
Gains less losses from investment securities	15	99	13	28	2
Net other operating income	14, 30	66	8	(1)	(0)
Operating income		1,537	1,332	496	462
Operating expenses	9	(750)	(725)	(247) -	(241)
Profit from operations before impairments and restructuring costs		787	607	249	221
Impairment losses on loans and advances	10	(588)	(2,394)	(190)	(256)
Other impairment losses	11	(24)	(49)	(10)	22
Restructuring costs	11	(48)	(46)	(1)	(43)
Share of results of associated undertakings and joint ventures		(2)	0	(2)	0
Profit/(loss) before tax		125	(1,882)	46	(56)
Income tax	12	(27)	514	(10)	64
Tax adjustments	12	31	432	-	432
Net profit/(loss) from continuing operations		129	(936)	36	440
Net profit/(loss) from discontinued operations	13	77	(51)	56	(26)
Net profit/(loss)		206	(987)	92	414
Net profit/(loss) attributable to non controlling interests		14	19	6	8
Net profit/(loss) attributable to shareholders		192	(1,006)	86	406
Earnings/(losses) per share		€	€	€	€
-Basic earnings/(losses) per share	8	0.09	(6.85)	0.04	2.76
Earnings/(losses) per share from continuing operations
-Basic earnings/(losses) per share	8	0.05	(6.50)	0.01	2.94

Consolidated Interim Statement of Comprehensive Income

			Nine months ended 30 September				Three months ended 30 September
	2016		2015		2016		2015
	€ million		€ million		€ million		€ million
Net profit/(loss)		206		(987)		92		414
Other comprehensive income:
Items that are or may be reclassified subsequently to profit or loss:
Cash flow hedges
- changes in fair value, net of tax	(0)		30		5		10
- transfer to net profit, net of tax	(0)	(0)	8	38	(0)	5	12	22
Available for sale securities
- changes in fair value, net of tax	50		48		18		257
- transfer to net profit, net of tax	(116)	(66)	(10)	38	(82)	(64)	(2)	255
Foreign currency translation
- changes in fair value, net of tax	(10)		(11)		(3)		(6)
- transfer to net profit, net of tax	1	(9)	-	(11)	1	(2)	-	(6)
Associated undertakings and joint ventures
- changes in the share of other comprehensive income, net of tax	(4)	(4)	-	-	(4)	(4)	-	-
		(79)		65		(65)		271
Items that will not be reclassified to profit or loss: - Actuarial gains/(losses) on post employment benefit obligations,
net of tax (note 23)	(3)	(3)	-	-	-	-	-	-
Other comprehensive income		(82)		65		(65)		271
Total comprehensive income attributable to: Shareholders
- from continuing operations	112		(889)		36		661
- from discontinued operations	(2)	110	(52)	(941)	(15)	21	16	677
Non controlling interests
- from continuing operations	14		19		6		8
- from discontinued operations	(0)	14	(0)	19	(0)	6	(0)	8
		124		(922)		27		685

Consolidated Interim Statement of Changes in Equity

			Total equity attributable to shareholders of the Bank
	Ordinary share capital € million	Share premium € million	Special reserves € million	Retained earnings € million	Preference shares € million	Preferred securities € million	Non controlling interests € million	Total € million
Balance at 1 January 2015	4,412	6,682	3,293	(9,778)	950	77	668	6,304
Net profit/(loss)	-	-	-	(1,006)	-	-	19	(987)
Other comprehensive income	-	-	65	-	-	-	0	65
Total comprehensive income for the
nine months ended 30 September 2015	-	-	65	(1,006)	-	-	19	(922)
Effect due to change of the income tax rate on share
capital increase expenses	-	-	-	5	-	-	-	5
Acquisition/changes in participating interests in
subsidiary undertakings	-	-	-	(0)	-	-	(2)	(2)
(Purchase)/sale of treasury shares	(1)	1	-	(0)	-	-	-	(0)
Dividends distributed by subsidiaries attributable to non
controlling interests	-	-	-	-	-	-	(24)	(24)
Share-based payment:
- Value of employee services	-	-	-	-	-	-	1	1
	(1)	1	-	5	-	-	(25)	(20)
Balance at 30 September 2015	4,411	6,683	3,358	(10,779)	950	77	662	5,362
Balance at 1 January 2016	656	8,055	7,786	(11,027)	950	43	669	7,132
Net profit/(loss)	-	-	-	192	-	-	14	206
Other comprehensive income	-	-	(82)	-	-	-	0	(82)
Total comprehensive income for the
nine months ended 30 September 2016	-	-	(82)	192	-	-	14	124
Acquisition/changes in participating interests in
subsidiary undertakings	-	-	-	0	-	-	4	4
(Purchase)/sale of treasury shares (note 24)	0	1	-	(2)	-	-	-	(1)
Dividends distributed by subsidiaries attributable to non
controlling interests	-	-	-	-	-	-	(24)	(24)
Share-based payment:
- Value of employee services	-	-	0	-	-	-	1	1
	0	1	0	(2)	-	-	(19)	(20)
Balance at 30 September 2016	656	8,056	7,704	(10,837)	950	43	664	7,236
	Note 24	Note 24			Note 25	Note 26

Consolidated Interim Cash Flow Statement

		Nine months ended 30 September
		2016	2015
	Note	€ million	€ million
Cash flows from continuing operating activities
Profit/(loss) before income tax from continuing operations		125	(1,882)
Adjustments for :
Impairment losses on loans and advances		588	2,394
Other impairment losses and provisions		65	89
Depreciation and amortisation		61	62
Other (income)/losses οn investment securities	28	(112)	(72)
(Income)/losses on debt securities in issue		(1)	(8)
Other adjustments	28	(50)	18
		676	601
Changes in operating assets and liabilities
Net (increase)/decrease in cash and balances with central banks		(150)	130
Net (increase)/decrease in financial instruments
at fair value through profit or loss		56	(42)
Net (increase)/decrease in due from credit institutions		(345)	(50)
Net (increase)/decrease in loans and advances to customers Net (increase)/decrease in derivative financial instruments		443 23	(213) 247
Net (increase)/decrease in other assets		153	10
Net increase/(decrease) in due to central banks and credit institutions		(5,886)	9,912
Net increase/(decrease) in due to customers		1,421	(10,192)
Net increase/(decrease) in other liabilities		(114)	(138)
		(4,399)	(336)
Income tax paid		(24)	(17)
Net cash from/(used in) continuing operating activities		(3,747)	248
Cash flows from continuing investing activities
Purchases of property, plant and equipment and intangible assets		(59)	(109)
Proceeds from sale of property, plant and equipment and intangible assets		28	15
(Purchases)/sales and redemptions of investment securities		2,886	211
Acquisition of Alpha Bank's Branch in Bulgaria, net of cash acquired Acquisition of holdings in associated undertakings and joint ventures	30	37 (10)	- -
Disposal of subsidiaries, net of cash disposed		314	5
Disposal/liquidation of holdings in associated undertakings and joint ventures		1	-
Dividends from investment securities, associated undertakings and joint ventures		3	2
Net cash from/(used in) continuing investing activities		3,200	124
Cash flows from continuing financing activities
(Repayments)/proceeds from debt securities in issue		(151)	(170)
Expenses paid for share capital increase		(6)	-
(Purchase)/sale of treasury shares		(1)	(0)
Net contribution by non-controlling interests (NCI)		(18)	(24)
Net cash from/(used in) continuing financing activities		(176)	(194)
Effect of exchange rate changes on cash and cash equivalents		3	4
Net increase/(decrease) in cash and cash equivalents from continuing
operations		(720)	182
Net cash flows from discontinued operating activities		(250)	(121)
Net cash flows from discontinued investing activities		219	104
Net cash flows from discontinued financing activities		(4)	-
Net increase/(decrease) in cash and cash equivalents from discontinued
operations		(35)	(17)
Cash and cash equivalents at beginning of period	28	2,205	1,978
Cash and cash equivalents at end of period	28	1,450	2,143

1. General information

Eurobank Ergasias S.A. (the 'Bank') and its subsidiaries (the 'Group') are active in retail, corporate and private banking, asset management, insurance until early August 2016, treasury, capital markets and other services. The Bank is incorporated in Greece and its shares are listed on the Athens Stock Exchange. The Group operates mainly in Greece and in Central, Eastern and Southeastern Europe.

These condensed consolidated interim financial statements were approved by the Board of Directors on 15 November 2016.

2. Principal accounting policies

These condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard (IAS) 34 'Interim Financial Reporting' and they should be read in conjunction with the Group's published consolidated annual financial statements for the year ended 31 December 2015. Where necessary, comparative figures have been adjusted to conform with changes in presentation in the current period. Except as indicated, financial information presented in euro has been rounded to the nearest million.

Going concern considerations

The interim financial statements have been prepared on a going concern basis, as the Board of the Directors considered as appropriate, taking into consideration the following:

Macroeconomic environment

Greece, after the completion of a number of key prior actions, has successfully concluded the 1st review of the Third Economic Adjustment Program (TEAP), which permitted the disbursement of the first sub-tranche of € 7.5 bn from the second instalment of the European Stability Mechanism (ESM) loan on 21 June 2016, allowing the country to cover its debt servicing needs and clear a part of the State's arrears to the private sector. Accordingly, the European Central Bank (ECB) decided the reinstatement of the waiver for the instruments issued by the Hellenic Republic and the improvement of the advance rates for providing Eurosystem financing with Pillar II guarantees as collateral. The second sub-tranche of € 2.8 bn from the 1st program review was approved by the ESM on 25 October 2016. The participation of the Greek Government Bonds in ECB's Quantitative Easing (QE) program, will be examined at a later stage, conditional on the implementation of the 2nd review and the results of the Debt Sustainability Analysis that the ECB is expected to conduct after the implementation of the short term debt relief measures for Greece. The latter are in accordance with the roadmap of debt relief agreed in the 25 May 2016 Eurogroup.

The completion of the 1 st review helped in reducing the short term uncertainty surrounding the economic outlook and contributed to further relaxation of capital controls, as of 22 July 2016. This, along with the mobilization of European Union (EU) funding to support domestic investment and job creation and the decisive implementation of the reforms agreed in the context of the ESM program, would facilitate the restoration of confidence in the prospects of the Greek economy and the further stabilization of the domestic environment, which are necessary conditions for the resumption of positive economic growth.

Currently, the main risks and uncertainties are associated with (a) the impact on the level of economic activity from additional fiscal measures agreed under the 1st review of the TEAP, (b) the possible delays in the implementation of the reforms' agenda in order to meet the next targets and milestones of the TEAP, including the timely completion of the 2nd review scheduled for early December 2016, (c) the timing of a full lift of restrictions in the free movement of capital and the respective impact on the level of economic activity, (d) a possible deterioration of the refugee crisis and the impact on the internal economy and (e) the geopolitical conditions in the broader region and the external shocks from a slowdown in the global economy.

Liquidity risk

In accordance with the agreement with the European partners, the authorities are committed to preserving sufficient liquidity in the banking system, as long as Greece meets its obligations under the ESM program. The decisive implementation of the measures agreed in the context of the new ESM program permitted ECB to reinstate the waiver for the instruments issued by the Hellenic Republic and decrease the haircuts applied for Pillar II guarantees. These developments have enabled Greek banks to reduce their dependence on the expensive Emergency Liquidity Assistance (ELA) mechanism and increase their liquidity buffers. The stabilization of the macroeconomic environment and a recovery of the domestic economic sentiment will facilitate a faster return of deposits in the banking system and the further re-access to the markets for liquidity.

In the first nine months of 2016, the Bank has managed to reduce its dependence on Eurosystem funding amounting to € 16.8 bn at the end of September 2016 (31 December 2015: € 25.3 bn), mainly through the increase in repo transactions in the interbank market, the selective assets deleveraging, the utilization of a part of foreign subsidiaries' surplus liquidity and to some extent by deposit inflows (note 19). On 31 October 2016 the Bank's Eurosystem funding further decreased to € 15.8 bn. In the same context, following the positive developments mentioned above, and the initiatives to further enhance its liquidity position, the Bank also managed to significantly reduce its participation in the second stream of the Hellenic Republic's liquidity support plan (bonds guaranteed by the Greek Government) from a face value of € 13 bn on 31 December 2015 to a face value of € 3.5 bn on 31 October 2016 (notes 4 and 22).

Solvency risk

Notwithstanding the direct and indirect exposure of the banking system to sovereign risk, the successful completion of the Bank's and other Greek systemic banks' recapitalization process constituted a key milestone for rebuilding trust in the banking system and in the economy in general.

The Group, following the successful completion of its recapitalization in November 2015, exclusively from private sources, is focused on the organic strengthening of its capital position by the further expansion of pre-provision income while maintaining its robust risk management practices, and by proceeding to additional initiatives associated with the restructuring, transformation or optimization of operations, in Greece and abroad, that will generate or release further capital and/or reduce risk weighted assets. One of the key areas of focus is the active management of non-performing loans at an accelerated pace, with the aim to substantially reduce their stock in accordance with the Bank's operating targets and taking advantage of the Group's internal infrastructure, the external partnerships and the important legislative changes that have taken or are expected to take place. The Group's Common Equity Tier 1 (CET1) ratio stood at 17.4% at the end of September 2016 (note 6) and the net profit attributable to shareholders amounted to € 192 million for the period ended 30 September 2016.

Going concern assessment

The Board of Directors, taking into consideration the above factors relating to the adequacy of the Group's capital position and its anticipated continued access to Eurosystem funding over the foreseeable future, and despite the existing uncertainties relating to the macroeconomic environment in Greece, has been satisfied that the financial statements of the Group can be prepared on a going concern basis.

The accounting policies and methods of computation in these condensed consolidated interim financial statements are consistent with those in the published consolidated annual financial statements for the year ended 31 December 2015, except as described below.

Amendments to standards adopted by the Group

The following amendments to standards, as issued by the International Accounting Standards Board (IASB) and endorsed by the European Union (EU), apply from 1 January 2016:

IAS 1, Amendment - Disclosure initiative

The amendment clarifies guidance in IAS 1 on materiality and aggregation, the presentation of subtotals, the structure of financial statements and the disclosure of accounting policies.

The adoption of the amendment had no impact on the Group's condensed consolidated interim financial statements.

IAS 16 and IAS 38, Amendments - Clarification of Acceptable Methods of Depreciation and Amortization

The amendments clarify that the use of revenue-based methods to calculate the depreciation of an asset is not appropriate and they also clarify that revenue is generally presumed to be an inappropriate basis for measuring the consumption of the economic benefits embodied in an intangible asset.

The adoption of the amendments had no impact on the Group's condensed consolidated interim financial statements.

IAS 19, Amendment - Defined Benefit Plans: Employee Contributions

The amendment clarifies the accounting for post-employment benefit plans where employees or third parties are required to make contributions which do not vary with the length of employee service, for example, employee contributions calculated according to a fixed percentage of salary. The amendment allows these contributions to be deducted from service cost in the year in which the related employee service is delivered, instead of attributing them to periods of employee service.

The adoption of the amendment had no impact on the Group's condensed consolidated interim financial statements.

IAS 27, Amendment - Equity Method in Separate Financial Statements

This amendment allows entities to use the equity method to account for investments in subsidiaries, joint ventures and associates in their separate financial statements and clarifies the definition of separate financial statements. In particular, separate financial statements are those presented in addition to consolidated financial statements or in addition to the financial statements of an investor that does not have investments in subsidiaries but has investments in associates or joint ventures which are required by IAS 28 Investments in Associates and Joint Ventures to be accounted for using the equity method.

The adoption of the amendment had no impact on the Group's condensed consolidated interim financial statements.

IFRS 11, Amendment – Accounting for Acquisitions of Interests in Joint Operations

This amendment requires an investor to apply the principles of business combination accounting when it acquires an interest in a joint operation that constitutes a 'business'.

The adoption of the amendment had no impact on the Group's condensed consolidated interim financial statements.

IFRS 10, IFRS 12 and IAS 28, Amendments - Investment Entities: Applying the Consolidation Exception

These amendments clarify the application of the consolidation exception for the subsidiaries of investment entities. The adoption of the amendments had no impact on the Group's condensed consolidated interim financial statements.

Annual Improvements to IFRSs 2010-2012 Cycle

The amendments introduce key changes to seven IFRSs following the publication of the results of the IASB's 2010-12 cycle of the annual improvements project. The topics addressed by these amendments are set out below:

• Definition of vesting condition in IFRS 2 'Share based Payment';
• Accounting for contingent consideration in a business combination in IFRS 3 'Business Combinations;
• Aggregation of operating segments and reconciliation of the total of the reportable segments' assets to the entity's assets in IFRS 8 'Operating Segment';
• Short-term receivables and payables in IFRS 13 'Fair Value Measurement';
• Revaluation method—proportionate restatement of accumulated depreciation in IAS 16 'Property, Plant and Equipment';
• Key management personnel in IAS 24 'Related Party Disclosures'; and
• Revaluation method—proportionate restatement of accumulated amortization in IAS 38 'Intangible Assets'

The adoption of the amendments had no impact on the Group's condensed consolidated interim financial statements.

Annual Improvements to IFRSs 2012-2014 Cycle

The amendments introduce key changes to four IFRSs following the publication of the results of the IASB's 2012-14 cycle of the annual improvements project. The topics addressed by these amendments are set out below:

• Clarifying in IFRS 5 'Non-current assets held for sale and discontinued operations' that, when an asset (or disposal group) is reclassified from 'held for sale' to 'held for distribution', or vice versa, this does not constitute a change to a plan of sale or distribution, and does not have to be accounted for as such.
• Adding in IFRS 7 'Financial instruments: Disclosures' specific guidance to help management determine whether the terms of an arrangement to service a financial asset which has been transferred constitute continuing involvement. It also clarifies that the additional disclosure required by the amendments to IFRS 7, 'Disclosure – Offsetting financial assets and financial liabilities' is not specifically required for all interim periods, unless required by IAS 34.
• Clarifying in IAS 19 'Employee benefits' that, when determining the discount rate for post-employment benefit obligations, it is the currency that the liabilities are denominated in that is important, and not the country where they arise.
• Clarifying in IAS 34 'Interim financial reporting' what is meant by the reference in the standard to 'information disclosed elsewhere in the interim financial report'.

The adoption of the amendments had no impact on the Group's condensed consolidated interim financial statements.

3. Critical accounting estimates and judgments in applying accounting policies

In preparing these condensed consolidated interim financial statements, the significant judgments made by Management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the published consolidated annual financial statements for the year ended 31 December 2015, which are those regarded by Management as the most important in applying the Group's accounting policies.

Further information about the key assumptions and sources of estimation uncertainty are set out in notes 5, 10, 12, 13, 23, 27 and 30.

4. Greek Economy Liquidity Support Program

The Bank participates in the Hellenic Republic's plan to support liquidity in the Greek economy under Law 3723/2008 as amended and supplemented, as follows:

• (a) First stream preference shares 345,500,000 non‐voting, preference shares, with nominal value of € 950 million, were subscribed to by the Hellenic Republic on 21 May 2009 (note 25).
• (b) Second stream bonds issued by the Bank and guaranteed by the Hellenic Republic

As at 30 September 2016, the government guaranteed bonds, of face value of € 3,000 million, were fully retained by the Bank. During the period ended 30 September 2016, the Bank proceeded with the redemption of government guaranteed bonds of face value of € 3,893 million, while bonds of face value of € 6,150 million matured, all of which were fully retained by the Bank. As at 31 October 2016, the government guaranteed bonds amounted to € 3,500 million, fully retained by the Bank (note 22).

Under Law 3723/2008, for the period the Bank participates in the program through the preference shares or the government guaranteed bonds (streams (a) and (b) above) the Hellenic Republic is entitled to appoint its representative to the Board of Directors. Information on the rights of the Hellenic Republic's representative is provided in the Annual Financial Report for the year ended 31 December 2015.

In addition, under Law 3756/2009, banks participating in the Greek Economy Liquidity Support Program are not allowed to acquire treasury shares under article 16 of the Company Law.

5. Credit exposure to Greek sovereign debt

As at 30 September 2016, the total carrying value of Greek sovereign major exposures is as follows:

	30 September	31 December
	2016	2015
	€ million	€ million
Treasury bills	1,538	2,157
Greek government bonds	1,664	1,677
Derivatives with the Greek state	1,230	992
Exposure relating with Greek sovereign risk financial guarantee	198	208
Loans guaranteed by the Greek state	145	176
Loans to Greek local authorities and public organizations	77	86
Other receivables	20	17
Total	4,872	5,313

The Group monitors the developments for the Greek debt crisis closely in order to adjust appropriately its estimates and judgments based on the latest available information (note 2).

Information on the fair values of the Group's financial instruments is provided in note 27.

6. Capital management

On 23 July 2015, the Directive 2014/59/EU for the recovery and resolution of credit institutions and investment firms (BRRD) was transposed into Greek Law by virtue of Law 4335/2015, with the exception of its provisions for the obligation of loss absorption in the case of implementation of measures of public financial stability and the restructuring of liabilities (bail-in) in certain eligible liabilities which are in full force from 1 January 2016. The transposition of the said Directive into the national legislation of the EU countries and Serbia, where the Group has activities, has been completed within the first quarter of 2016. Further information is provided in note 6 of the consolidated financial statements for the year ended 31 December 2015.

Additionally, Law 4340/2015 (as amended by Law 4346/2015) updated the recapitalization framework of Greek credit institutions and the relevant provisions of Law 3864/2010 regarding the Hellenic Financial Stability Fund (HFSF). More specifically, it regulates, among others, the conditions and the procedure through which HFSF provides capital support to Greek credit institutions, enriches HFSF's rights towards Greek credit institutions to which HFSF has provided capital support and also introduces additional provisions concerning the composition and evaluation of the boards of directors and committees of credit institutions having signed a Relationship Framework Agreement with HFSF (note 32).

Capital position

	30 September	31 December
	2016	2015
	€ million	€ million
Total equity attributable to shareholders of the Bank	6,529	6,420
Add: Regulatory non-controlling interests	265	401
Less: Other regulatory adjustments	(222)	(198)
Common Equity Tier I Capital	6,572	6,623
Add: Preferred securities	2 6	3 0
Less: Other regulatory adjustments	(26)	(30)
Total Tier I Capital	6,572	6,623
Tier II capital-subordinated debt	6	1 5
Add: Other regulatory adjustments	135	147
Total Regulatory Capital	6,713	6,785
Risk Weighted Assets	37,852	38,888
Ratios:	%	%
Common Equity Tier I	17.4	17.0
Tier I	17.4	17.0
Total Capital Adequacy Ratio	17.7	17.4

Note: The CET1 as at 30 September 2016, based on the full implementation of the Basel III rules in 2024, would have been 13.8% (31 December 2015: 13.1%).

The Group has sought to maintain an actively managed capital base to cover risks inherent in the business. The adequacy of the Group's capital is monitored using, among other measures, the rules and ratios established by the Basel Committee on Banking Supervision ('BIS rules/ratios') and adopted by the European Union and the Bank of Greece in supervising the Bank. The capital adequacy calculation is based on Basel III (CRDIV) rules. Supplementary to that, in the context of Internal Capital Adequacy Assessment Process ('ICAAP'), the Group considers a broader range of risk types and the Group's risk management capabilities. ICAAP aims ultimately to ensure that the Group has sufficient capital to cover all material risks that it is exposed to, over a 3-year horizon.

To this direction, the Group, following the successful completion of its recapitalization in November 2015, is focused on the organic strengthening of its capital position by the further expansion of pre-provision income while maintaining its robust risk management practices, the active management of non-performing loans supported by the fully operational internal bad bank as well as by proceeding to additional initiatives associated with the restructuring, transformation or optimization of operations, in Greece and abroad, that will generate or release further capital and/or reduce risk weighted assets.

Restructuring plan

On 29 April 2014, the European Commission (EC) approved the Bank's restructuring plan, as it was submitted through the Greek Ministry of Finance on 16 April 2014. In addition, on 26 November 2015, the EC approved the Bank's revised restructuring plan. The Hellenic Republic has committed that the Bank will implement specific measures and actions and will achieve objectives which are an integral part of the said restructuring plan.

The principal commitments of the revised restructuring plan relate to: (a) the reduction of the total costs and the maximum number of employees and branches for the Group's Greek activities, (b) the decrease of the cost of deposits collected in Greece, (c) the reduction of the net loans to deposits ratio for the Group's Greek banking activities, (d) the reduction of the portfolio of the Group's foreign assets (non–related to Greek clients), (e) the decrease in shareholding in specific non-banking subsidiaries, (f) the deleveraging of the portfolio of equity investments, subordinated and hybrid bonds, (g) restrictions on the capital injection to the Group's foreign subsidiaries unless the regulatory framework of each relevant jurisdiction requires otherwise, the purchase of noninvestment grade securities (subject to certain exceptions), the staff remuneration, the payment of dividends, the credit policy to be adopted and other strategic decisions.

The Group is well on track to meet its commitments within the prescribed deadlines; in respect of those commitments that should be implemented within 2016, the Group has already completed the disposal of the 80% of the shareholding in its insurance subsidiaries in August (item 'e' above – note 13), while the value of the portfolio of equity and other investments eligible for item 'f' above, amounted to € 34 million as at 30 September 2016, which is in line with the threshold set in the plan. In respect to the commitment referring to item 'a' above, the Group has already achieved to reduce the total costs and the number of branches for its Greek activities, while in relation to the reduction of the number of employees in Greece by 31 December 2017, significant progress has been made through the implementation of the Voluntary Exit Scheme (VES) that commenced in the second quarter of 2016 (note 23). Finally, the cost of deposits in Greece has been reduced in line with the Bank's own projections incorporated into the plan. Further information on the principal commitments to be implemented, the basic assumptions used and the potential effect on the Group's business is presented in note 6 of the consolidated financial statements for the year ended 31 December 2015.

Monitoring Trustee

The Memorandum of Economic and Financial Policies (MEFP) of the Second Adjustment Program for Greece between the Hellenic Republic, the European Commission, the International Monetary Fund and the European Central Bank provides for the appointment of a monitoring trustee in all banks under State Aid.

On 22 February 2013, the Bank appointed Grant Thornton as its Monitoring Trustee (MT). The MT monitors compliance with commitments on corporate governance and commercial operational practices, and the implementation of the restructuring plan and reports to the European Commission.

7. Segment information

Management has determined the operating segments based on the internal reports reviewed by the Strategic Planning Committee that are used to allocate resources and to assess their performance in order to make strategic decisions. The Strategic Planning Committee considers the business both from a business unit and geographic perspective. Geographically, management considers the performance of its business in Greece and other countries in Europe (International). Greece is further segregated into retail, wholesale, wealth management, global and capital markets. International is monitored and reviewed on a country basis. The Group aggregates segments when they exhibit similar economic characteristics and profile and are expected to have similar long-term economic development.

The Group is organized in the following reportable segments:

• Retail: incorporating customer current accounts, savings, deposits and investment savings products, credit and debit cards, consumer loans, small business banking and mortgages.
• Corporate: incorporating current accounts, deposits, overdrafts, loan and other credit facilities, foreign currency and derivative products to corporate entities, custody, equity brokerage, cash management and trade services.

• Wealth Management: incorporating private banking services, including total wealth management, to medium and high net worth individuals, insurance services until early August 2016, mutual fund and investment savings products, and institutional asset management.

• Global and Capital Markets: incorporating investment banking services including corporate finance, merger and acquisitions advice, financial instruments trading and institutional finance to corporate and institutional entities, as well as, specialized financial advice and intermediation to private and large retail individuals as well as small and large corporate entities.

• International: incorporating operations in Romania, Bulgaria, Serbia, Cyprus, Ukraine and Luxembourg.

From the fourth quarter of 2015, the equity brokerage and custody services of the Group's operations in Greece are incorporated in the Corporate segment, instead of Global and Capital Markets segment. Therefore, the comparative figures for the period ended 30 September 2015 have been adjusted accordingly.

Other operations of the Group comprise mainly investing activities, including property management and investment and the management of unallocated capital.

The Group's management reporting is based on International Financial Reporting Standards (IFRS). The accounting policies of the Group's operating segments are the same with those described in the principal accounting policies.

Revenues from transactions between business segments are allocated on a mutually agreed basis at rates that approximate market prices.

Operating segments

	For the nine months ended 30 September 2016
	Retail € million	€ million	Wealth Corporate Management € million	Global & Capital Markets € million	International € million	Other and Elimination center € million	Total € million
Net interest income	459	275	7	146	313	(41)	1,159
Net commission income	39	51	20	(15)	75	5	175
Other net revenue	39	(0)	0	(5)	39	130	203
Total external revenue	537	326	27	126	427	94	1,537
Inter-segment revenue	25	16	(21)	(19)	(1)	(0)	-
Total revenue	562	342	6	107	426	94	1,537
Operating expenses Impairment losses on loans and	(361)	(90)	(21)	(61)	(203)	(14)	(750)
advances	(317)	(154)	(1)	-	(116)	-	(588)
Other impairment losses (note 11) Share of results of associated	-	(5)	(2)	-	(3)	(14)	(24)
undertakings and joint ventures	(0)	0	(2)	-	(0)	(0)	(2)
Profit/(loss) before tax from continuing operations
before restructuring costs	(116)	93	(20)	46	104	66	173
Restructuring costs (note 11)	(52)	(6)	(2)	(1)	(9)	22	(48)
Profit/(loss) before tax from continuing
operations	(168)	87	(22)	45	95	88	125
Profit/(loss) before tax from discontinued
operations	-	-	31	-	(1)	59	89
Non controlling interests	-	-	-	-	(1)	(18)	(19)
Profit/(loss) before tax attributable to
shareholders	(168)	87	9	45	93	129	195
				30 September 2016
				Global &		Other and
			Wealth	Capital		Elimination

			Wealth	Capital		Elimination
	Retail		Corporate Management	Markets	International	center (2)	Total
	€ million	€ million	€ million	€ million	€ million	€ million	€ million
Segment assets	21,816	11,599	270	14,388	12,821	7,306	68,200
Segment liabilities	18,555	2,481	1,527	27,317	11,352	(268)	60,964

The International segment is further analyzed as follows:

	For the nine months ended 30 September 2016
	Romania	Bulgaria	Serbia	Cyprus	Ukraine	Luxembourg	Total
	€ million	€ million	€ million	€ million	€ million	€ million	€ million
Net interest income	82	117	43	55	-	16	313
Net commission income	15	26	10	18	-	6	75
Other net revenue	26	12	1	0	-	(0)	39
Total external revenue	123	155	54	73	-	22	427
Inter-segment revenue	0	0	(0)	0	-	(1)	(1)
Total revenue	123	155	54	73	-	21	426
Operating expenses	(75)	(62)	(33)	(21)	-	(12)	(203)
Impairment losses on loans and advances	(48)	(45)	(13)	(10)	-	(0)	(116)
Other impairment losses	(0)	(3)	(0)	-	-	-	(3)
Profit/(loss) before tax from continuing operations
before restructuring costs	(0)	45	8	42	-	9	104
Restructuring costs	(1)	(8)	(0)	-	-	(0)	(9)
Profit/(loss) before tax from continuing
operations(1)	(1)	37	8	42	-	9	95
Profit/(loss) before tax from discontinued
operations	(1)	-	-	-	(0)	-	(1)
Non controlling interests	(1)	(0)	(0)	-	0	-	(1)
Profit/(loss) before tax attributable to shareholders	(3)	37	8	42	(0)	9	93

	30 September 2016
	Romania	Bulgaria	Serbia	Cyprus	Ukraine	Luxembourg	International
	€ million	€ million	€ million	€ million	€ million	€ million	€ million
Segment assets(3)	2,849	3,237	1,244	4,152	89	1,483	12,821
Segment liabilities(3)	2,665	2,779 872 3,754 144 1,238
					For the nine months ended 30 September 2015
				Global &		Other and
			Wealth	Capital		Elimination
	Retail	Corporate	Management	Markets	International	center	Total
	€ million	€ million	€ million	€ million	€ million	€ million	€ million
Net interest income	442	280	(0)	86	310	(30)	1,088
Net commission income	25	57	32	(41)	70	0	143
Other net revenue	2	2	1	33	6	57	101
Total external revenue	469	339	33	78	386	27	1,332
Inter-segment revenue	50	13	(41)	(15)	(1)	(6)	-
Total revenue	519	352	(8)	63	385	21	1,332
Operating expenses	(360)	(81)	(27)	(48)	(198)	(11)	(725)
Impairment losses on loans and
advances	(1,488)	(774)	(13)	(0)	(119)	-	(2,394)
Other impairment losses (note 11)	-	(13)	(4)	9	(8)	(33)	(49)
Share of results of associated
undertakings and joint ventures	0	-	-	-	(0)	-	-
Profit/(loss) before tax from continuing operations
before restructuring costs	(1,329)	(516)	(52)	24	60	(23)	(1,836)
Restructuring costs (note 11)	-	(0)	-	(40)	-	(6)	(46)
Profit/(loss) before tax from continuing
operations	(1,329)	(516)	(52)	(16)	60	(29)	(1,882)
Profit/(loss) before tax from discontinued
operations	-	-	47	-	(117)	-	(70)
Non controlling interests	-	-	-	-	(1)	(20)	(21)
Profit/(loss) before tax attributable to shareholders	(1,329)	(516)	(5)	(16)	(58)	(49)	(1,973)
				31 December 2015
				Global &		Other and
			Wealth	Capital		Elimination
	Retail	Corporate	Management	Markets	International	center (2)	Total
	€ million	€ million	€ million	€ million	€ million	€ million	€ million
Segment assets	22,501	11,889	2,097	14,209	12,740	10,117	73,553
Segment liabilities	18,003	2,485	2,912	32,543	11,411	(933)	66,421

13 | Page 30 September 2016 Condensed Consolidated Interim Financial Statements

		For the nine months ended 30 September 2015
	Romania	Bulgaria	Serbia	Cyprus	Ukraine	Luxembourg	Total
	€ million	€ million	€ million	€ million	€ million	€ million	€ million
Net interest income	91	106	53	43	-	17	310
Net commission income	17	23	9	16	-	5	70
Other net revenue	3	1	1	0	-	1	6
Total external revenue	111	130	63	59	-	23	386
Inter-segment revenue	(0)	(0)	(0)	0	-	(1)	(1)
Total revenue	111	130	63	59	-	22	385
Operating expenses	(74)	(58)	(35)	(19)	-	(12)	(198)
Impairment losses on loans and advances	(32)	(46)	(31)	(10)	-	(0)	(119)
Other impairment losses	(3)	(5)	-	-	-	-	(8)
Profit/(loss) before tax from continuing operations(1)	2	21	(3)	30	-	10	60
Profit/(loss) before tax from discontinued
operations	0	-	-	-	(117)	-	(117)
Non controlling interests	(1)	-	(0)	-	0	-	(1)
Profit/(loss) before tax attributable to
shareholders	1	21	(3)	30	(117)	10	(58)
				31 December 2015
	Romania	Bulgaria	Serbia	Cyprus	Ukraine	Luxembourg	International
	€ million	€ million	€ million	€ million	€ million	€ million	€ million
Segment assets(3)	3,235	3,186	1,254	3,724	130	1,405	12,740
Segment liabilities(3)	3,042	2,834	881	3,360	197	1,166	11,411

(1) Income/(loss) from associated undertakings and joint ventures is included.

(2) Interbank eliminations between International and the other Group's segments are included.

(3) Intercompany balances among the Countries have been excluded from the reported assets and liabilities of International segment.

Note: In the second quarter of 2015, the Bank transferred its operations in United Kingdom (London branch) to its subsidiary Eurobank Private Bank Luxembourg S.A. In particular, at the date of transfer total assets of London branch amounted to € 198 million and total liabilities amounted to € 196 million.

8. Earnings per share

Basic earnings per share is calculated by dividing the net profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the period, excluding the average number of ordinary shares purchased by the Group and held as treasury shares.

The diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all potentially dilutive ordinary shares. The Group has issued convertible, subject to certain conditions and restrictions, preferred securities (Series D, note 26).

		Nine months ended 30 September		Three months ended 30 September
		2016	2015	2016	2015
Net profit/(loss) for the period attributable to shareholders Net profit/(loss) for the period from continuing operations attributable	€ million	192	(1,006)	86	406
to shareholders	€ million	115	(955)	30	432
Weighted average number of ordinary shares in issue for basic earnings/(losses) per share	Number of shares 2,185,429,434		146,985,307	2,185,508,175	147,027,012
Earnings/(losses) per share
- Basic earnings/(losses) per share	€	0.09	(6.85)	0.04	2.76
Earnings/(losses) per share from continuing operations
- Basic earnings/(losses) per share	€	0.05	(6.50)	0.01	2.94

Basic earnings per share from discontinued operations for the period ended 30 September 2016 amounted to € 0.04 (30 September 2015: € 0.35 losses).

Basic losses per share for 2015 have been adjusted taking into account the reverse split of the ordinary shares at a ratio of 100 existing to one new ordinary share in accordance with the decisions of the Extraordinary General Meeting held on 16 November 2015.

The Group has determined that the potential ordinary shares which could result from the conversion of the aforementioned preferred securities are not deemed to be issuable on the basis of the conditions and restrictions currently in force (note 6). Accordingly, the Series D of preferred securities was not included in the calculation of diluted earnings per share.

9. Operating expenses

	30 September	30 September
	2016	2015
	€ million	€ million
Staff costs	(408)	(397)
Administrative expenses	(186)	(181)
Contributions to resolution and deposit guarantee funds	(58)	(47)
Depreciation of property, plant and equipment	(42)	(43)
Amortisation of intangible assets	(19)	(19)
Operating lease rentals	(37)	(38)
Total from continuing operations	(750)	(725)

Contributions to resolution and deposit guarantee funds

For the period ended 30 September 2016, the expense for contributions to the resolution and deposit guarantee funds amounted to € 58 million. With Law 4370/2016, which came into force in March 2016, the Directive 2014/49/EU was transposed into the Greek legislation replacing Law 3746/2009, and defining, among others, the scope and certain aspects of the operation of the Hellenic Deposit and Investment Guarantee Fund (HDIGF), the terms of participation of credit institutions as well as the process for determining and paying contributions to its Schemes. The transposition of the Directive 2014/49/EU into the national legislation of the EU countries where the Group has activities has been completed within the first quarter of 2016.

Staff costs

The average number of employees of the Group during the period, excluding insurances, was 17,040 of which the employees of Ukraine was 649 (September 2015: 17,260, excluding insurances, of which the employees of Ukraine was 713). As at 30 September 2016, the number of branches of the Group amounted to 940 of which the branches of the Ukrainian subsidiary was 42.

10. Impairment allowance for loans and advances to customers

The movement of the impairment allowance for loans and advances to customers by product line is as follows:

		30 September 2016
	Wholesale € million	Mortgage € million	Consumer (1) € million	Small business € million	Total € million
Balance at 1 January	4,693	2,172	2,765	2,160	11,790
Impairment loss for the period	185	179	173	51	588
Recoveries of amounts previously written off	-	-	6	1	7
Amounts written off (2)	(319)	(26)	(174)	(25)	(544)
NPV unwinding	(71)	(50)	(43)	(72)	(236)
Foreign exchange differences and other
movements	(4)	(24)	(31)	(19)	(78)
Balance at 30 September	4,484	2,251	2,696	2,096	11,527

(1) Credit cards balances are included.

(2) An amount of € 170 million included relates with the non performing loans sale transactions (note 14).

In May 2016, Law 77/2016 on the discharge of debt obligations ('Datio in Solutum') came into force in Romania. In particular, the said law provides for the discharge in full and under certain preconditions of the loans contracted by individuals and secured by mortgage arrangements by 'payment in kind' through the transfer of the mortgaged property. In the second quarter of 2016, after considering all available information, the Group assessed the effect of the enforcement of the aforementioned law and recognized accordingly an additional impairment loss of € 20 million on loans and advances granted by its Romanian banking subsidiary Bancpost S.A.

According to the press releases issued by the Romanian Constitutional Court (RCC), on 25 October 2016 the RCC decided that certain provisions of the law are against the Constitution. The decisions of RCC (including the reasoning) are expected to be published in the Official Gazette of Romania within November 2016. The Group awaits the decisions and the reasoning of the RCC and reserves its right to assess the legal possibility to seek recourse to the supranational European Court of Justice.

In addition, the Group is closely monitoring any relevant developments to update the estimate of the effect on its financial statements in accordance with its accounting policies.

11. Other impairments and restructuring costs

	30 September	30 September
	2016	2015
	€ million	€ million
Impairment losses and valuation losses on investment and
repossessed properties	(15)	(51)
Impairment losses/(reversal) on bonds	(1)	9
Impairment losses on mutual funds and equities	(4)	(7)
Impairment losses on other receivables	(4)	-
Other impairment losses	(24)	(49)
Provision for Voluntary Exit Scheme (note 23)	(33)	-
Resolution Fund contribution	-	(40)
Restructuring costs	(14)	(5)
Other expenses	(1)	(1)
Restructuring costs	(48)	(46)
Total from continuing operations	(72)	(95)

In the period ended 30 September 2016, the Group recognized restructuring expenses amounting to € 14 million, of which € 8 million related with the acquisition of Alpha Bank's Branch in Bulgaria by Eurobank Bulgaria A.D. (note 30).

Additionally, during the period, the Group recognized € 4 million impairment losses on rental receivables.

For the nine months ended 30 September 2015, the Group recognized € 51 million impairment and valuation losses on investment and repossessed properties mainly in Greece, after considering the macroeconomic conditions and the persistent decline in real estate market prices.

In the period ended 30 September 2015, the Group reversed € 10 million impairment for the Ukrainian government bonds that were included in its held-to-maturity portfolio. Detailed information is presented in the consolidated financial statements for the year ended 31 December 2015.

In the third quarter of 2015, the Group recognized a provision of € 40 million in relation to the expected contributions relevant with the Directive 2014/59/EU for the recovery and resolution of credit institutions and investment firms (BRRD), which has been enacted in Greece with Law 4335/2015 in July 2015 and was also enacted in certain countries where the Group has activities. In the fourth quarter of 2015, the Group's entities were notified of the final contributions by the relevant national authorities and accordingly they were presented within operating expenses.

12. Income tax and tax adjustments

	30 September	30 September
	2016	2015
	€ million	€ million
Current tax	(41)	(37)
Deferred tax	14	551
Income tax	(27)	514
Tax adjustments	31	432
Total tax (charge)/income from continuing operations	4	946

According to Law 4334/2015, which was enacted on 16 July 2015 and amended tax Law 4172/2013, the nominal Greek corporate tax rate increased from 26% to 29% for income generated in accounting years 2015 and onwards. This tax rate change resulted in an increase of net deferred tax asset by € 508 million as at 30 September 2015, out of which € 489 million have been recorded in income statement, and € 19 million directly in equity (including Other Comprehensive Income - OCI). In particular, € 432 million of the € 489 million that have been recorded in the income statement refer to the effect due to change in tax rates applied on previous years' temporary differences, as well as on unused tax losses and the remaining € 57 million represent the effect due to change in tax rates applied on temporary differences and unused tax losses arisen in the first half of 2015.

In addition, dividends distributed, other than intragroup dividends which under certain preconditions are relieved from both income and withholding tax, are subject to 15% withholding tax, according to Law 4387/2016 and Law 4389/2016 which increased the respective tax rate from 10% to 15% for dividend distributions as of 1 January 2017 and onwards.

Furthermore, during the period ended 30 September 2016, following a favorable court decision, the Group has recognized a tax income of € 30.5 million for tax claims against the Greek State in relation to the one - off taxation of the Bank's non-taxed reserves which had been imposed by the Law 3513/2006.

Tax certificate and open tax years

For the year ended 31 December 2011 and onwards as the Law 4174/2013 (article 65A) currently stands (and as Law 2238/1994 previously provided in article 82), up to and including fiscal years starting before 1 January 2016, the Greek sociétés anonymes and limited liability companies whose annual financial statements are audited compulsorily, were required to obtain an 'Annual Tax Certificate', which is issued after a tax audit is performed by the same statutory auditor or audit firm that audits the annual financial statements. For fiscal years starting from 1 January 2016 and onwards, the 'Annual Tax Certificate' is not mandatory, however the Group's Greek companies will obtain such certificate.

The Bank has been audited by tax authorities up to 2009, while tax audit for 2010 performed by tax authorities is currently in progress. Furthermore, the Bank has obtained by external auditors unqualified tax certificates for years 2011 – 2015. In addition, New TT Hellenic Postbank and New Proton Bank, which were merged with the Bank in 2013, have obtained by external auditors unqualified tax certificates with a matter of emphasis for their unaudited by tax authorities periods/tax years 18/1-30/6/2013 and 9/10/2011- 31/12/2012, respectively, with regards to potential tax obligations resulting from their carve out. For both cases the Bank has formed adequate provisions.

The Group's subsidiaries, associates and joint ventures which operate in Greece (notes 17 and 18) have not been audited for a period of 2 to 8 tax years from the tax authorities. Where these entities are subject to statutory audit by external auditors, they have obtained unqualified tax certificates for years 2011 – 2015.

In accordance with the Greek tax legislation and the respective Ministerial Decisions issued, additional taxes and penalties may be imposed by the Greek tax authorities following a tax audit within the applicable statute of limitations (i.e. in principle five years as from the end of the fiscal year within which the relevant tax return should have been submitted), irrespective of whether an unqualified tax certificate has been obtained from the tax paying company.

The open tax years of foreign Group's bank subsidiaries are as follows: (a) Bancpost S.A. (Romania), 2011-2015, (b) Eurobank Cyprus Ltd, 2012-2015, (c) Eurobank Bulgaria A.D., 2013-2015, (d) Eurobank A.D. Beograd (Serbia), 2010 -2015, and (e) Eurobank Private Bank Luxembourg S.A., 2011-2015. The remaining of the Group's foreign entities (notes 17 and 18), which operate in countries

where a statutory tax audit is explicitly stipulated by law, have 1 to 6 open tax years in principle, subject to certain preconditions of the applicable tax legislation of each jurisdiction.

Deferred income taxes are calculated on all deductible temporary differences under the liability method as well as for unused tax losses at the rate in effect at the time the reversal is expected to take place.

The movement on deferred income tax is as follows:

	30 September
	2016
	€ million
Balance at 1 January	4,854
Income statement credit/(charge) from continued operations	14
Available for sale investment securities	1
Cash flow hedges	(0)
Discontinued operations	3
Balance at 30 September	4,872 Error-0.00100000000020373

The movement of € 3 million of discontinued operations refers to the partial reversal of deferred tax liability (DTL) on the taxable temporary differences associated with the Bank's investment in its insurance subsidiary, which has been recognized until the completion of its sale transaction, on 4 August 2016.

Deferred income tax assets/(liabilities) are attributable to the following items:

	30 September	31 December
	2016	2015
	€ million	€ million
PSI+ tax related losses	1,264	1,302
Loan impairment	2,878	2,810
Unused tax losses	256	319
Valuations through the income statement	321	302
Costs directly attributable to equity transactions	40	46
Cash flow hedges	29	29
Valuations directly to available-for-sale revaluation reserve	11	9
Fixed assets	(3)	(1)
Defined benefit obligations	12	11
Other	64	27
Net deferred income tax	4,872	4,854

The decrease of deferred tax asset for unused tax losses is mainly attributable to the Bank's taxable gains of € 219 million resulted from the sale of insurance operations.

The net deferred income tax is analyzed as follows:

	30 September	31 December
	2016	2015
	€ million	€ million
Deferred income tax assets	4,876	4,859
Deferred income tax liabilities (note 23)	(4)	(5)
Net deferred income tax	4,872	4,854

Deferred income tax (charge)/credit in the income statement is attributable to the following items:

	30 September	30 September
	2016	2015
	€ million	€ million
Loan impairment	68	500
Unused tax losses	(63)	1
Change in nominal tax rates (1)	-	489
Tax deductible PSI+ losses	(38)	(35)
Change in fair value and other temporary differences	47	28
Deferred income tax (charge)/credit from continued operations	14	983
Temporary differences relating to discontinued operations	3	32
Deferred income tax (charge)/credit	17	1,015

(1)The amount of change in nominal tax rates represents the total effect in the income statement for the period ended 30 September 2015 that is analyzed above.

As at 30 September 2016, the Group recognized net deferred tax assets amounting to € 4.9 bn as follows:

• (a) € 1,264 million refer to losses resulted from the Group's participation in PSI+ and the Greek's state debt buyback program which are subject to amortization (i.e. 1/30 of losses per year starting from year 2012 and onwards) for tax purposes;
• (b) € 2,878 million refer to deductible temporary differences arising from loan impairment that can be utilized in future periods with no specified time limit and according to current tax legislation of each jurisdiction;
• (c) € 256 million refer to unused tax losses. The ability to utilize tax losses carried forward mainly expires in 2018;
• (d) € 40 million mainly refer to deductible temporary differences related to the unamortized for tax purposes costs directly attributable to Bank's share capital increases, subject to 10 years' amortization according to tax legislation in force at the year they have been incurred;
• (e) € 434 million refer to other deductible temporary differences (i.e. valuation losses, provisions for pensions and other postretirement benefits, etc.) the majority of which can be utilized in future periods with no specified time limit and according to the applicable tax legislation of each jurisdiction.

Assessment of the recoverability of deferred tax assets

The recognition of the above presented deferred tax assets is based on management's assessment, as at 30 September 2016, that the Group's legal entities will have sufficient future taxable profits, against which the unused tax losses, the deductible temporary differences, as well as the losses from PSI+ and the Greek state's debt buyback program can be utilized. The deferred tax assets are determined on the basis of the tax treatment of each deferred tax asset category, as provided by the applicable tax legislation of each jurisdiction, the eligibility of carried forward losses for offsetting with future taxable profits, the actual tax results for the year ended 31 December 2015 and the extrapolated tax results for the year ended 31 December 2016 using the actual tax results for the period ended 30 September 2016.

Additionally, the Group's assessment on the recoverability of recognized deferred tax assets is based on (a) the future performance expectations (forecasting operating results) and growth opportunities relevant for determining the expected future taxable profits, (b) the expected timing of reversal of the deductible and taxable temporary differences, (c) the probability that the Group entities will have sufficient taxable profits in the future, in the same period as the reversal of the deductible and taxable temporary differences (i.e. profits/ losses on sale of investments or other assets, etc.) or in the years into which the tax losses can be carried forward, and (d) the historical levels of Group entities' performance in combination with the previous years' tax losses caused by one off or non-recurring events.

As at 30 September 2016 the Group, for its DTA recoverability assessment, used the restructuring plan that was approved by the European Commission (EC) in November 2015 (note 6) as the forecast of its operating results for the period up to the end of 2018. For the years beyond 2018, the forecast of operating results was based on the management projections considering the growth opportunities of the Greek economy, the banking sector and the Group itself.

The level of the abovementioned forecasting operating results mainly derives from the Group's estimates regarding (a) the further reduction of its funding cost driven by the gradual repatriation of customer deposits, the further decrease of the respective interest rates and the replacement of more expensive funding sources, (b) the lower loan impairment losses as a result of the

macroeconomic conditions in Greece that are expected to improve and the actions already implemented by the Group regarding the effective management of troubled assets, (c) the effectiveness of the continuous cost containment measures, and (d) the gradual restoration of traditional commission income such as asset management and network fees and commissions relating with capital markets and investment banking activities.

The implementation of the abovementioned restructuring plan largely depends on the risks and uncertainties that stem from the macroeconomic environment in Greece (note 2).

Legal framework for tax credit against the Greek State

According to article 27A of Law 4172/2013 as in force, which is applicable to Greek financial institutions, including leasing and factoring companies, deferred tax assets that have been recognized by the Bank due to (a) losses from the Private Sector Involvement ('PSI') and the Greek State Debt Buyback Program, and (b) accumulated provisions and other losses in general due to credit risk (provisions and credit losses) which were accounted as at 30 June 2015, will be converted into directly enforceable claims (tax credit) against the Greek State, provided that the Bank's after tax accounting result for the period, is a loss (starting from fiscal year 2016 onwards). As at 30 September 2016, deferred tax assets eligible for conversion to tax credits amounted to € 4,028 million. Further information is provided in the note 16 of the consolidated financial statements for the year ended 31 December 2015.

13. Discontinued operations

Insurance operations

On 22 December 2015, the Group announced that it has reached an agreement with Fairfax Financial Holdings Limited ('Fairfax') to sell 80% of Eurolife ERB Insurance Group Holdings S.A. ('Eurolife') (the 'Transaction') for a cash consideration of € 316 million, subject to further adjustments based on the performance of the entity up to the completion of the Transaction, while Eurobank would retain a 20% stake.

The Transaction included: (a) Eurolife's Greek life and non-life insurance activities and Eurolife's brokerage subsidiary in Greece, which were presented in Wealth management segment, (b) Eurolife's Romanian life and non-life insurance activities, which were presented in International segment and (c) the bancassurance agreements between Eurolife subsidiaries and Eurobank, for the exclusive distribution of insurance products in Greece and Romania through Eurobank's sales network.

The results of the Group's Insurance operations are set out below.

	For the period ended
	31 July	30 September
	2016	2015
	€ million	€ million
Net interest income	35	34
Net insurance income	(25)	20
Gains less losses from investment securities	53	15
Other income/(loss)	(17)	2
Operating expenses	(15)	(20)
Profit/(loss) before impairments from discontinued operations	31	51
Other impairment losses	-	(4)
Profit/(loss) before tax from discontinued operations	31	47
Income tax (1)	(12)	(13)
Profit/(loss) after tax from discontinued operations before gain on disposal	19	34
Gain on disposal	58	-
Net Profit/(loss) from discontinued operations attributable to shareholders	77	34

(1) During the period ended 30 September 2016, the Group partially reversed the deferred tax liability on the taxable temporary differences (capital gains) associated with the investment in Eurolife ERB Insurance Group Holding S.A by € 3 million (note 12).

Up to the date of disposal, cumulative gains (mainly related to the revaluation of available for sale securities) related to the insurance operations recognized in other comprehensive income amounted to € 81 million.

The major classes of assets and liabilities of Insurance operations are as follows:

	31 July	31 December
	2016	2015
	€ million	€ million
Financial instruments at FVTPL and investment securities	1,916	1,816
Other assets (1)	113	105
Total assets of disposal group classified as held for sale	2,029	1,921
Insurance reserves	1,456	1,324
Due to customers	247	421
Other liabilities	97	71
Total liabilities of disposal group classified as held for sale	1,800	1,816
Net intragroup assets of insurance operations	187	325
Net assets of disposal group classified as held for sale	416	430

(1) Includes cash and cash equivalents of € 3 million.

The Transaction was completed on 4 August 2016, after all required regulatory approvals were obtained. The cash consideration pursuant to the Transaction documentation, after the distribution of a € 34 million dividend to Eurobank by Eurolife, reached € 321 million, including the adjustments performed due to the finalization of the completion statement of Eurolife.

Upon the completion of the Transaction, the Group derecognized the assets and liabilities of Eurolife and recognized its retained 20% interest as an associate using the equity method of accounting at its fair value of € 83 million. This is a non-recurring fair value measurement, categorized as Level 3 in the fair value hierarchy due to the significance of the unobservable inputs. The fair value was determined by reference to the consideration received for the disposal of Eurolife and is within the range of the values provided in the independent valuation reports used in determining the fair value of the insurance operations disposed. No gain or loss was recognised in relation to the re-measurement of the Group's retained interest in Eurolife to fair value.

The gain on the disposal of the Group's Insurance operations, including the recyclement to the income statement of the cumulative gains arising from the revaluation of available for sale securities previously recognized in other comprehensive income, amounts to € 58 million, after tax.

Operations in Ukraine classified as held for sale

In March 2014, management committed to a plan to sell the Group's operations in Ukraine (including Public J.S.C. Universal Bank). The sale was considered probable, therefore, the Group's operations in Ukraine were classified as a disposal group held for sale. The Group's operations in Ukraine are presented in the International segment.

Following the classification of the disposal group as held for sale, in accordance with IFRS 5, the Group has measured it at the lower of its carrying amount and fair value less costs to sell. This is a non-recurring fair value measurement, categorized as Level 3 in the fair value hierarchy due to the significance of the unobservable inputs. The determination of fair value less costs to sell was based on recent bid offers received from third parties for the sale of the Group's operations in Ukraine, further adjusted by management in order to reflect the continuing stressed market environment.

The continuing adverse conditions in the country led to an extension of the period to complete the sale beyond one year. The Group's operations in Ukraine continue to be classified as a disposal group held for sale, as the Group remains committed to its plan to sell that disposal group. As at 30 September 2016, cumulative losses (currency translation differences) related to the Ukrainian held for sale operations recognized in other comprehensive income amounted to € 69 million (30 September 2015: € 68 million).

The results of the Group's operations in Ukraine classified as held for sale are set out below.

		Nine months ended 30 September
	2016	2015
	€ million	€ million
Net interest income	7	2
Net banking fee and commission income	2	2
Other income/(loss) (1)	(0)	(5)
Operating expenses	(10)	(12)
Impairment and remeasurement losses on loans and advances	1	(104)
Profit/(loss) before tax from discontinued operations	(0)	(117)
Income tax	0	32
Profit/(loss) after tax from discontinued operations	(0)	(85)
Net profit/(loss) from discontinued operations attributable to non controlling interests	(0)	(0)
Net profit/(loss) from discontinued operations attributable to shareholders	(0)	(85)
(1) Mainly referring to FX losses for the nine months ended 30 September 2015.

The major classes of assets and liabilities of the Group's operations in Ukraine classified as held for sale are as follows:

	30 September	31 December
	2016	2015
	€ million	€ million
Cash and balances with central banks	26	46
Due from credit institutions	5	19
Trading and investment securities	8	2
Loans and advances to customers	49	62
Other assets	1	1
Total assets of disposal group classified as held for sale	89	130
Due to customers	100	123
Other liabilities	1	2
Total liabilities of disposal group classified as held for sale	101	125
Net Group funding associated with Ukrainian assets held for sale	43	72
Net assets of disposal group classified as held for sale	(55)	(67)

14. Loans and advances to customers

	30 September	31 December
	2016	2015
	€ million	€ million
Wholesale lending	19,276	19,606
Mortgage lending	17,914	18,261
Consumer lending (1)	6,329	6,570
Small business lending	7,125	7,246
	50,644	51,683
Less: Impairment allowance (note 10)	(11,527)	(11,790)
	39,117	39,893
Included in gross loans and advances are: Past due more than 90 days	17,605	18,190

(1) Credit cards balances are included.

As of 30 September 2014, in accordance with IAS 39, the Group has elected to reclassify certain impaired corporate bond loans from the 'Available-for-sale' portfolio to 'Loans and advances to customers' portfolio that met the definition of loans and receivables and the Group has the intention and ability to hold them for the foreseeable future or until maturity. The reclassifications were made with effect from 30 September 2014 at the loans' fair value of € 150 million (gross amount of € 592 million less fair value adjustment of € 442 million), which became their amortized cost at the reclassification date.

As at 30 September 2016, the carrying amount of these loans is € 92 million which approximates their fair value. No amounts would have been recognized in the OCI had these financial assets not been reclassified.

Non-performing loans sale transactions

In the first quarter of 2016, Eurobank's Bulgarian subsidiary Eurobank Bulgaria A.D. completed the profitable assignment of a portfolio of non-performing (NPLs) consumer unsecured gross loans of € 72 million (€ 9 million, net of provision for impairment), which resulted in a gain of € 5 million, that has been recognized in 'Other operating income'.

In the second quarter of 2016, Eurobank's Romanian subsidiaries Bancpost S.A. and ERB Retail Services IFN S.A., and its Dutch subsidiary ERB New Europe Funding II B.V. completed the assignment of a portfolio of non-performing gross loans of € 162 million (€ 55 million, net of provision for impairment), which represented significant part of consumer unsecured loans past due more than 90 days as at 31 December 2015. Overall, the transactions resulted in a gain of € 6 million, that has been recognized in 'Other operating income'.

The aforementioned transactions are in line with the Group's strategy for the reduction of the NPLs, the risk weighted assets and the operating costs associated with the activities of servicing the said portfolios.

15. Investment securities

	30 September	31 December
	2016	2015
	€ million	€ million
Available-for-sale investment securities	3,557	4,282
Debt securities lending portfolio	9,452	11,391
Held-to-maturity investment securities	567	618
	13,576	16,291

The investment securities per category are analyzed as follows:

	30 September 2016
Available-	Debt securities	Held-to-
-for-sale	lending	-maturity
securities	portfolio	securities	Total
€ million	€ million	€ million	€ million
-	8,070	-	8,070
729	932	-	1,661
1,538	-	-	1,538
878	307	385	1,570
265	143	182	590
3,410	9,452	567	13,429
147	-	-	147
3,557	9,452	567	13,576

	31 December 2015
	Available-	Debt securities	Held-to-
	-for-sale	lending	-maturity
	securities	portfolio	securities	Total
	€ million	€ million	€ million	€ million
Debt securities
- EFSF bonds	-	10,042	-	10,042
- Greek government bonds	784	881	-	1,665
- Greek government treasury bills	2,157	-	-	2,157
- Other government bonds	981	311	394	1,686
- Other issuers	225	157	224	606
	4,147	11,391	618	16,156
Equity securities	135	-	-	135
Total	4,282	11,391	618	16,291

In 2008 and 2010, in accordance with the amendments to IAS 39, the Group reclassified eligible debt securities from the 'Availablefor-sale' portfolio to 'Debt securities lending' portfolio carried at amortized cost. Interest on the reclassified securities continued to be recognized in interest income using the effective interest rate method. As at 30 September 2016, the carrying amount of the reclassified securities was € 1,057 million. Had the financial assets not been reclassified, changes in the fair value for the period from the reclassification date until 30 September 2016 would have resulted in € 384 million losses net of tax, which would have been recognized in the available-for-sale revaluation reserve.

Visa Europe sale transaction

On 21 June 2016, Visa Inc announced the completion of the acquisition of Visa Europe Ltd. In accordance with the terms of the final transaction agreement, upon the closing of the transaction Visa Inc. paid an up-front cash consideration of € 12.2 bn and issued preferred shares equivalent to a value of € 5.3 bn to the shareholders of Visa Europe. In addition, a deferred cash payment of € 1.12 bn, including interest, will be paid on the third anniversary of the closing date.

The Group recognized its share of the sale proceeds, including € 38 million in cash, € 12 million in preferred shares and € 3 million as the present value of the deferred consideration in 'Gains less losses from investment securities'.

Sale of European Financial Stability Facility (EFSF) notes

In April 2016 the European Financial Stability Facility (EFSF) allowed Greek banks, that have been recapitalized with EFSF notes, to sell the respective notes to the members of the Eurosystem, in accordance with the conditions applicable to the Public Sector Asset Purchase Program (PSPP), established by the European Central Bank (ECB). Accordingly, the Bank as at 30 September 2016 had proceeded with the sale of EFSF notes of face value of € 1,945 million, recognizing a gain of € 40 million in 'Gains less losses from investment securities'.

Post balance sheet event

By 31 October 2016 the Bank had proceeded with an additional sale of EFSF notes of face value of € 489 million, which resulted in € 11 million gain.

16. Investment property

The movement of investment property (net book value) is as follows:

	30 September
	2016
	€ million
Cost:
Balance at 1 January	997
Arising from acquisition (note 30)	1
Transfers from/to repossessed assets	20
Other transfers	2
Additions	15
Disposals and write-offs	(39)
Impairments	(4)
Exchange adjustments	(1)
Balance at 30 September	991
Accumulated depreciation:
Balance at 1 January	(72)
Transfers	(0)
Disposals and write-offs	3
Charge for the period	(9)
Exchange adjustments	0
Balance at 30 September	(78)
Net book value at 30 September	913

17. Shares in subsidiary undertakings

The following is a listing of the Bank's subsidiaries at 30 September 2016, included in the condensed consolidated interim financial statements for the period ended 30 September 2016:

Name	Note	Percentage holding	Country of incorporation	Line of business
Be Business Exchanges S.A. of Business Exchanges Networks and Accounting and Tax Services		98.01	Greece	Business-to-business e-commerce, accounting and tax services
Cloud Hellas S.A.	a	20.00	Greece	Real estate
Eurobank Asset Management Mutual Fund Mngt Company S.A.		100.00	Greece	Mutual fund and asset management
Eurobank Business Services S.A.		100.00	Greece	Payroll and advisory services
Eurobank Equities S.A.		100.00	Greece	Capital markets and advisory services
Eurobank Ergasias Leasing S.A.		100.00	Greece	Leasing
Eurobank Factors S.A.		100.00	Greece	Factoring
Eurobank Financial Planning Services S.A.		100.00	Greece	Management of overdue loans
Eurobank Household Lending Services S.A.		100.00	Greece	Promotion/management of household products
GRIVALIA PROPERTIES R.E.I.C.	a	20.00	Greece	Real estate
Eurobank Property Services S.A.		100.00	Greece	Real estate services
Eurobank Remedial Services S.A.		100.00	Greece	Notification to overdue debtors
Hellenic Post Credit S.A.		50.00	Greece	Credit card management and other services
Eurobank ERB Mutual Funds Mngt Company S.A.		100.00	Greece	Mutual fund management
Herald Greece Real Estate development and services company 1		100.00	Greece	Real estate
Herald Greece Real Estate development and services company 2		100.00	Greece	Real estate
Eurobank Bulgaria A.D.		99.99	Bulgaria	Banking
Bulgarian Retail Services A.D.		100.00	Bulgaria	Rendering of financial services and credit card management
ERB Property Services Sofia A.D.		100.00	Bulgaria	Real estate services
ERB Leasing E.A.D.		100.00	Bulgaria	Leasing
IMO 03 E.A.D.		100.00	Bulgaria	Real estate services
IMO Central Office E.A.D.		100.00	Bulgaria	Real estate services
IMO Property Investments Sofia E.A.D.		100.00	Bulgaria	Real estate services
ERB Hellas (Cayman Islands) Ltd		100.00	Cayman Islands	Special purpose financing vehicle
Berberis Investments Ltd		100.00	Channel Islands	Holding company
ERB Hellas Funding Ltd		100.00	Channel Islands	Special purpose financing vehicle
Eurobank Cyprus Ltd		100.00	Cyprus	Banking
CEH Balkan Holdings Ltd		100.00	Cyprus	Holding company
Chamia Enterprises Company Ltd		100.00	Cyprus	Special purpose investment vehicle
ERB New Europe Funding III Ltd		100.00	Cyprus	Finance company
Foramonio Ltd		100.00	Cyprus	Real estate
NEU 03 Property Holdings Ltd		100.00	Cyprus	Holding company
NEU II Property Holdings Ltd		100.00	Cyprus	Holding company
NEU BG Central Office Ltd		100.00	Cyprus	Holding company
NEU Property Holdings Ltd		100.00	Cyprus	Holding company
Eurobank Private Bank Luxembourg S.A.		100.00	Luxembourg	Banking
Eurobank Fund Management Company (Luxembourg) S.A.		100.00	Luxembourg	Fund management
Eurobank Holding (Luxembourg) S.A.		100.00	Luxembourg	Holding company
Grivalia Hospitality S.A.	a	20.00	Luxembourg	Real estate
Grivalia New Europe S.A.	a	20.00	Luxembourg	Real estate
ERB New Europe Funding B.V.		100.00	Netherlands	Finance company
ERB New Europe Funding II B.V.		100.00	Netherlands	Finance company
ERB New Europe Holding B.V.		100.00	Netherlands	Holding company
Bancpost S.A.		99.15	Romania	Banking
Eliade Tower S.A.	a	20.00	Romania	Real estate
ERB IT Shared Services S.A.		100.00	Romania	Informatics data processing
ERB Leasing IFN S.A.		100.00	Romania	Leasing
ERB Retail Services IFN S.A.		100.00	Romania	Credit card management
Eurobank Finance S.A.		100.00	Romania	Investment banking
Eurobank Property Services S.A.		100.00	Romania	Real estate services

Name	Note	Percentage holding	Country of incorporation	Line of business
IMO Property Investments Bucuresti S.A.		100.00	Romania	Real estate services
IMO-II Property Investments S.A.		100.00	Romania	Real estate services
Retail Development S.A.	a	20.00	Romania	Real estate
Seferco Development S.A.	a	20.00	Romania	Real estate
Eurobank A.D. Beograd		99.98	Serbia	Banking
ERB Asset Fin d.o.o. Beograd		100.00	Serbia	Asset management
ERB Leasing A.D. Beograd		99.99	Serbia	Leasing
ERB Property Services d.o.o. Beograd		100.00	Serbia	Real estate services
IMO Property Investments A.D. Beograd		100.00	Serbia	Real estate services
Reco Real Property A.D.	a	20.00	Serbia	Real estate
ERB Istanbul Holding A.S.		100.00	Turkey	Holding company
Public J.S.C. Universal Bank	b	99.99	Ukraine	Banking
ERB Hellas Plc		100.00	United Kingdom	Special purpose financing vehicle
Anaptyxi II Plc (1)		-	United Kingdom	Special purpose financing vehicle
Anaptyxi SME I Plc		-	United Kingdom	Special purpose financing vehicle
Daneion 2007-1 Plc (1)		-	United Kingdom	Special purpose financing vehicle
Daneion APC Ltd (1)		-	United Kingdom	Special purpose financing vehicle
Karta II Plc		-	United Kingdom	Special purpose financing vehicle
Themeleion II Mortgage Finance Plc (1)		-	United Kingdom	Special purpose financing vehicle
Themeleion III Mortgage Finance Plc (1)		-	United Kingdom	Special purpose financing vehicle
Themeleion IV Mortgage Finance Plc (1)		-	United Kingdom	Special purpose financing vehicle
Themeleion Mortgage Finance Plc (1)		-	United Kingdom	Special purpose financing vehicle
Tegea Plc	d	-	United Kingdom	Special purpose financing vehicle

(1) SPVs under liquidation.

The following entities are not included in the condensed consolidated interim financial statements mainly due to immateriality:

(i) Holding entities of Group's special purpose financing vehicles: (a) Anaptyxi II Holdings Ltd, Themeleion III Holdings Ltd, Themeleion IV Holdings Ltd and Daneion Holdings Ltd, which are under liquidation and (b) Anaptyxi SME I Holdings Ltd, Karta II Holdings Ltd and Tegea Holdings Ltd, which was established in July 2016.

(ii) Dormant/under liquidation entities: Enalios Real Estate Development S.A., Hotels of Greece S.A.

(iii) Entities controlled by the Group pursuant to the terms of the relevant share pledge agreements: Finas S.A., Rovinvest S.A., Provet S.A. and Promivet S.A.

(a) GRIVALIA subgroup (GRIVALIA PROPERTIES R.E.I.C. and its subsidiaries)

During the first half of 2016 the Group acquired, through Eurolife ERB Life Insurance S.A. and Eurolife ERB General Insurance S.A. 0.45% of GRIVALIA PROPERTIES R.E.I.C. In August 2016, following the disposal of the Group's Insurance operations (note 13), the total Group participation to GRIVALIA subgroup decreased from 20.93% to 20.00%.

(b) Public J.S.C. Universal Bank, Ukraine

In 2016, following a share capital increase, which was fully covered by ERB New Europe Holding B.V., the Group's participation to the company increased from 99.97% to 99.99%.

(c) Proton Mutual Funds Management Company S.A., Greece

In June 2016, the liquidation of the company was completed.

(d) Tegea Plc, United Kingdom

In July 2016, Tegea Plc was established as the Group's special purpose financing vehicle (note 22).

(e) ERB ROM Consult S.A, Romania

In July 2016, the liquidation of the company was completed.

(f) Eurolife ERB Insurance Group Holdings S.A., Greece

On 4 August 2016, the Group announced the completion of the sale of 80% of Eurolife ERB Insurance Group Holdings S.A. Hence, as of that date, the company and its subsidiaries (ERB Insurance Services S.A., Eurolife ERB General Insurance S.A., Eurolife ERB Life Insurance S.A., Diethnis Ktimatiki S.A., Eurolife ERB Asigurari De Viata S.A. and Eurolife ERB Asigurari Generale S.A.) are not consolidated (notes 13 and 18).

(g) IMO Rila E.A.D., Bulgaria

In September 2016, the Group announced the completion of the sale of 100% of IMO Rila E.A.D.

(h) ERB Property Services Ukraine LLC, Ukraine

In September 2016, the Group disposed of ERB Property Services Ukraine LLC; the appropriate registration of the transaction by the local authorities was completed in early October 2016.

Post balance sheet event

Eurobank Business Services S.A., Greece

In October 2016, the Group entered into an agreement for the disposal of the company.

18. Other assets

	30 September	31 December
	2016	2015
	€ million	€ million
Receivable from Deposit Guarantee and Investment Fund	689	677
Repossessed properties and relative prepayments	430	463
Pledged amount for a Greek sovereign risk financial guarantee	246	258
Income tax receivable	293	271
Other guarantees	66	182
Prepaid expenses and accrued income	60	39
Investments in associated undertakings and joint ventures (see below)	95	10
Other assets	204	251
	2,083	2,151

As at 30 September 2016, the receivable from Deposit Guarantee and Investment Fund includes a cash collateral amounting to € 3.7 million arising from the irrevocable payment commitment and collateral arrangement agreement signed between the Bank and the Single Resolution Board ('the SRB'), in May 2016 (note 29) .

As at 30 September 2016, other assets amounting to € 204 million (31 December 2015: € 251 million) mainly consist of receivables from (a) settlement balances with customers, (b) public entities, (c) legal cases, net of provisions and (d) brokerage activity.

The following is a listing of the Group's associated undertakings and joint ventures as at 30 September 2016:

		Country of		Percentage
Name	Note	incorporation	Line of business	Holding
Femion Ltd		Cyprus	Special purpose investment vehicle	66.45
Tefin S.A. (1)		Greece	Motor vehicle sales financing	50.00
Sinda Enterprises Company Ltd		Cyprus	Special purpose investment vehicle	48.00
Singidunum - Buildings d.o.o. Beograd	b	Serbia	Development of building projects	44.81
Global Finance S.A.		Greece	Investment Financing	33.82
Rosequeens Properties Ltd		Cyprus	Special purpose investment vehicle	33.33
Rosequeens Properties SRL		Romania	Real estate	33.33
Odyssey GP S.a.r.l.		Luxembourg	Special purpose investment vehicle	20.00
Eurolife ERB Insurance Group Holdings S.A.	c	Greece	Holding company	20.00

(1) In December 2013, the Extraordinary General Meeting of shareholders of the company decided its liquidation.

The Group's associated undertakings are Eurolife ERB Insurance Group Holdings S.A., Global Finance S.A. and Odyssey GP S.a.r.l.

(a) Unitfinance S.A., Greece

In the first quarter of 2016, the liquidation of the company was completed.

(b) Singidunum - Buildings d.o.o. Beograd, Serbia

In February 2016, IMO Property Investments A.D. Beograd acquired 50% of the shares and voting rights of Singidunum - Buildings d.o.o. Beograd ('Singidunum'), a real estate company incorporated in Serbia, for a cash consideration of € 10 million. At the date of acquisition, the Group's share of the net fair value of Singidunum's identifiable assets and liabilities amounted to € 10.16 million. Therefore, an excess amount of € 0.16 million over the cost of the investment arose, which was included as income in the Group's share of the entity's results in the first quarter of 2016.

In the second quarter of 2016, the Group's participation in Singidunum decreased from 50% to 44.81%, following a debt to equity conversion and the completion of an additional share capital increase of the company in favor of the other shareholder, Lamda Development B.V.

(c) Eurolife ERB Insurance Group Holdings S.A., Greece

As of 4 August 2016, following the completion of the sale of 80% of Eurolife ERB Insurance Group Holdings S.A., the Group holds 20% ownership in the company. Hence, thereafter, Eurolife insurance group (Eurolife ERB Insurance Group Holdings S.A. and its subsidiaries) is considered as a Group's associated undertaking (note 13).

Post balance sheet event

In October 2016, the Group acquired 50% of Piraeus Port Plaza 1 Development S.A., a real estate company, through its subsidiary GRIVALIA PROPERTIES R.E.I.C for a consideration of € 1.6 million. Based on the contractual terms of the shareholders' agreement, the company is considered as a joint venture of the Group and accordingly, the Group's indirect participation of 10% in the company will be accounted under the equity method.

19. Due to central banks

	30 September	31 December
	2016	2015
	€ million	€ million
Secured borrowing from ECB and BoG	16,829	25,267

As at 30 September 2016, the Bank has lowered its dependency on Eurosystem financing facilities to € 16.8 bn (of which € 13.1 bn funding from ELA), mainly as a result of the increase of wholesale secured funding and the selective assets deleveraging, and to some extent due to the deposit inflows. As at 31 October 2016, the Eurosystem funding stood at € 15.8 bn, of which € 13.1 bn funding from ELA.

20. Due to credit institutions

	30 September	31 December
	2016	2015
	€ million	€ million
Secured borrowing from credit institutions	6,816	3,969
Borrowings from international financial and other institutions	245	478
Interbank takings	57	39
Current accounts and settlement balances with banks	29	30
	7,147	4,516

As at 30 September 2016, borrowings from international financial and other institutions include funds received by the Bank from IFG – Greek SME Finance S.A. of € 99 million, in order to provide financing to Small & Medium-Sized Enterprises (SMEs). The funds originated from the German and Greek State and are under the management of KFW (German government-owned development bank) and ETEAN S.A. (Hellenic fund for entrepreneurship and development) respectively.

21. Due to customers

	30 September	31 December
	2016	2015
	€ million	€ million
Term deposits	14,755	13,653
Savings and current accounts	18,510	17,679
Repurchase agreements	53	53
Other term products (note 22)	50	61
Total	33,368	31,446

The other term products comprise of (a) senior medium-term notes held by Group's customers, amounting to € 18 million (31 December 2015: € 28 million) and (b) subordinated notes held by Group's customers, amounting to € 32 million (31 December 2015: € 33 million).

22. Debt securities in issue

	30 September	31 December
	2016	2015
	€ million	€ million
Medium-term notes (EMTN) (note 21)	60	108
Subordinated - Lower Tier II (note 21)	43	42
	103	150

Medium-term notes (EMTN)

During the period, the Group proceeded with the repurchase of medium term notes of face value of € 17 million, recognizing a gain of € 2 million in 'Net trading income', while notes of face value of € 39 million matured.

Securitized

In July 2016, the Bank proceeded with the issue of mortgage backed securities of face value of € 1.9 bn effected through a special purpose entity, Tegea Plc. The total issue was fully retained by the Bank.

Government guaranteed and covered bonds

As at 30 September 2016, the government guaranteed bonds under the second stream of the Greek Economy Liquidity Support Program (note 4), as well as the covered bonds, of face value of € 3,000 million and € 2,275 million, respectively, were retained by the Bank and its subsidiaries.

During the period, the Bank proceeded with the issue of covered bonds of face value of € 2,175 million, fully retained by the Bank.

During the period, the Bank proceeded with the redemption of government guaranteed bonds of face value of € 3,893 million, while bonds of face value of € 6,150 million matured, all of which were fully retained by the Bank.

Post balance sheet event

During October 2016, the Bank issued government guaranteed bonds of face value of € 500 million, fully retained by the Bank (note 4).

Financial disclosures required by the Act 2620/28.08.2009 of the Bank of Greece in relation to the covered bonds issued, are available at the Bank's website (Investor Report for Covered Bonds Programs).

23. Other liabilities

	30 September	31 December
	2016	2015
	€ million	€ million
Other provisions	108	143
Deferred income and accrued expenses	114	70
Settlement balances with customers (1)	61	81
Sovereign risk financial guarantee	48	50
Standard legal staff retirement indemnity obligations	45	42
Deferred tax liabilities (note 12)	4	5
Income taxes payable	22	15
Other liabilities	261	336
	663	742

(1) Including balances from brokerage activities.

As at 30 September 2016, other liabilities amounting to € 261 million mainly consist of payables relating with (a) suppliers and creditors, (b) bank checks and remittances, (c) contributions to insurance organizations, (d) duties and other taxes and (e) credit card transactions under settlement.

As at 30 September 2016, other provisions amounting to € 108 million mainly include outstanding litigations and claims in dispute of € 65 million (note 29), restructuring costs of € 28 million (of which € 24 million relate to the Voluntary Exit Scheme (VES), net of actual payments and € 4 million relate to the acquisition of Alpha Bank's Branch in Bulgaria by Eurobank Bulgaria A.D., note 30) and other provisions for operational risk events of € 10 million.

The implementation of the VES, which was designed for the Group's employees in Greece in the context of the implementation of the Group's restructuring plan and in line with the related principal commitments described therein (note 6), commenced in the second quarter of 2016 and is expected to be completed within the following months.

In this respect and prior to determining the estimated cost for the VES, the Group proceeded with the remeasurement of the retirement benefit obligations in the second quarter of 2016, by updating the last annual actuarial valuations and in particular the key actuarial assumptions prevailing prior to the VES implementation, as follows: discount rate of 2.0% (31 December 2015: 2.6%) and rate of future salary increases of 2.1% (31 December 2015: 2.2%), expressed as weighted averages. The remeasurement resulted in the increase of the retirement benefit obligations by € 4 million in total.

Following the aforementioned remeasurement, the cost for the VES, as re-estimated in the second quarter of 2016 in line with the Group's strategy, amounts to approximately € 95 million, net of provision for retirement benefits, out of which € 62 million was recognized as a provision in the fourth quarter of 2015. The VES aims to increase the Group's operating efficiency and is expected to result in an estimated annual saving of € 38 million.

24. Ordinary share capital, share premium and treasury shares

The par value of the Bank's shares is € 0.30 per share (31 December 2015: € 0.30). All shares are fully paid. The movement of ordinary share capital, share premium and treasury shares is as follows:

	Ordinary share capital € million	Treasury shares € million	Net € million	Share premium € million	Treasury shares € million	Net € million
Balance at 1 January 2016	656	(0)	656	8,056	(1)	8,055
Purchase of treasury shares	-	(1)	(1)	-	(1)	(1)
Sale of treasury shares	-	1	1	-	2	2
Balance at 30 September 2016	656	(0)	656	8,056	(0)	8,056

The following is an analysis of the movement in the number of shares issued by the Bank:

	Number of shares
Issued
ordinary	Treasury
shares	shares	Net
2,185,998,765	(780,893)	2,185,217,872
-	(2,237,346)	(2,237,346)
-	2,241,896	2,241,896
Balance at 30 September 2016 2,185,998,765	(776,343)	2,185,222,422

Treasury shares

Under Law 3756/2009, banks participating in the Government's Greek Economy Liquidity Support Program are not allowed to acquire treasury shares under article 16 of the Company Law.

In the ordinary course of business, subsidiaries of the Group may acquire and dispose of treasury shares.

25. Preference shares

Preference Shares
	30 September	31 December
Number of	2016	2015
shares	€ million	€ million
345,500,000	950	950

On 12 January 2009, the Extraordinary General Meeting of the Bank approved the issue of 345,500,000 non-voting, non-listed, nontransferable, tax deductible, non-cumulative 10% preference shares, with nominal value € 2.75 each, under Law 3723/2008 'Greek Economy Liquidity Support Program', to be fully subscribed to and paid by the Greek State with bonds of equivalent value. The proceeds of the issue amounted to € 940 million, net of expenses, and the transaction was completed on 21 May 2009. In accordance with the current legal and regulatory framework, the issued shares have been classified as Common Equity Tier I capital.

The preference shares pay a non-cumulative coupon of 10% of the issue price of each of the preference shares, subject to meeting minimum capital adequacy requirements, set by Bank of Greece (BoG), availability of distributable reserves in accordance with article 44Α of Company Law 2190/1920 and the approval of the Annual General Meeting. Five years after the issue of the preference shares, the Bank may redeem the preference shares at their nominal value. If such redemption is not possible, because the Bank's capital adequacy ratio would fall below the minimum requirements set by the BoG, the preference shares will be converted into ordinary shares or shares of any other class existing at the time of the conversion following a decision of the Minister of Finance and after a recommendation by the Governor of the BoG and on condition that at the expiry of the five year period, the Bank will have submitted, and the Minister of Finance will have approved, further to a recommendation by the Governor of the BoG, a restructuring plan of the Bank pursuant to the legislation as in force. The conversion ratio will take into account the average market price of the Bank's ordinary shares during the calendar year preceding such conversion. In case of non-redemption of the preference shares by the Bank at the expiration of the five year period, the abovementioned coupon is increased by 2% each year, following relevant decision by the Minister of Finance, upon recommendation of the BoG.

Based on the 2015 results and Law 3723/2008 in combination with article 44Α of Company Law 2190/1920, the distribution of dividends to either ordinary or preference shareholders is not permitted.

26. Preferred securities

The outstanding amount of preferred securities issued by the Group through its Special Purpose Entity, ERB Hellas Funding Limited, as at 30 September 2016 is analyzed as follows:

	Series A	Series B	Series C	Series D	Total
	€ million	€ million	€ million	€ million	€ million
At 30 September 2016	2	4	18	19	43

All obligations of the issuer, in respect of the aforementioned issues of preferred securities, are guaranteed on a subordinated basis by the Bank. The analytical terms of each issue along with the rates and/or the basis of calculation of preferred dividends are available at the Bank's website. The preferred dividends must be declared and paid if the Bank declares a dividend. For the period ended 30 September 2016 and in 2015, the Bank did not distribute any dividend. Accordingly, ERB Hellas Funding Ltd announced the non payment of the non cumulative preferred dividend of the above series of preferred securities.

27. Fair value of financial assets and liabilities

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal (or most advantageous) market at the measurement date under current market conditions (i.e. an exit price). When a quoted price for an identical asset or liability is not observable, fair value is measured using another valuation technique that is appropriate in the circumstances, and maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs. Observable inputs are developed using market data, such as publicly available information about actual events or transactions, and reflect assumptions that market participants would use when pricing financial instruments, such as quoted prices in active markets for similar instruments, interest rates and yield curves, implied volatilities and credit spreads.

The Group's financial instruments carried at fair value or at amortized cost for which fair value is disclosed are categorized into the three levels of the fair value hierarchy based on whether the inputs to the fair values are observable or unobservable, as follows:

• (a) Level 1 Financial instruments measured based on quoted prices (unadjusted) in active markets for identical financial instruments that the Group can access at the measurement date. A market is considered active when quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency and represent actually and regularly occurring transactions. Level 1 financial instruments include actively quoted debt instruments, equity and derivative instruments traded on exchanges, as well as mutual funds that have regularly and frequently published quotes.
• (b) Level 2 Financial instruments measured using valuation techniques with inputs, other than level 1 quoted prices, that are observable either directly or indirectly, such as: i) quoted prices for similar financial instruments in active markets, ii) quoted prices for identical or similar financial instruments in markets that are not active, iii) inputs other than quoted prices that are directly or indirectly observable, mainly interest rates and yield curves observable at commonly quoted intervals, forward exchange rates, equity prices, credit spreads and implied volatilities obtained from internationally recognized market data providers and iv) other unobservable inputs which are insignificant to the entire fair value measurement. Level 2 financial instruments include over-the-counter (OTC) derivatives and less liquid debt instruments held or issued by the Group.
• (c) Level 3 Financial instruments measured using valuation techniques with significant unobservable inputs. When developing unobservable inputs, best information available is used, including own data, while at the same time market participants' assumptions are reflected (e.g. assumptions about risk). Level 3 financial instruments include unquoted equities or equities traded in markets that are not considered active, certain OTC derivatives and loans and advances to customers.

Financial instruments carried at fair value

The fair value hierarchy categorization of the Group's financial assets and liabilities carried at fair value is presented in the following tables:

	30 September 2016
	Level 1	Level 2	Level 3	Total
	€ million	€ million	€ million	€ million
Financial assets measured at fair value:
Financial instruments held for trading	43	0	1	44
Derivative financial instruments	0	2,196	1	2,197
Available-for-sale investment securities	3,469	25	63	3,557
Total financial assets	3,512	2,221	65	5,798
Financial liabilities measured at fair value:
Derivative financial instruments	0	2,753	-	2,753
Due to customers:
- Structured deposits	-	3	-	3
Debt securities in issue:
- Structured notes	-	2	-	2
Trading liabilities	2	-	-	2
Total financial liabilities	2	2,758	-	2,760
	31 December 2015
	Level 1	Level 2	Level 3	Total
	€ million	€ million	€ million	€ million
Financial assets measured at fair value:
Financial instruments held for trading	99	0	1	100
Derivative financial instruments	0	1,865	19	1,884
Available-for-sale investment securities	4,191	49	42	4,282
Total financial assets	4,290	1,914	62	6,266
Financial liabilities measured at fair value:
Derivative financial instruments	1	2,358	-	2,359
Due to customers: - Structured deposits	-	4	-	4
Debt securities in issue:
- Structured notes	-	38	-	38
Trading liabilities	10	-	-	10

The Group recognizes transfers into and out of the fair value hierarchy levels at the beginning of the quarter in which a financial instrument's transfer was effected.

In the period ended 30 September 2016, equity instruments of € 13 million were transferred from Level 1 to Level 3, as their market was not considered active and their measurement was based on valuation techniques with significant unobservable inputs. In the same period, derivative financial instruments of € 19 million were transferred from Level 3 to Level 2, as the CVA adjustment calculated based on internal rating models, was not considered significant to their entire fair value measurement.

Reconciliation of Level 3 fair value measurements

	30 September
	2016
	€ million
Balance at 1 January	62
Transfers into Level 3	13
Transfers out of Level 3	(19)
Additions, net of disposals and redemptions	21
Total gain/(loss) for the period included in profit or loss	(2)
Total gain/(loss) for the period included in other comprehensive income	(11)
Foreign exchange differences and other	1
Balance at 30 September	65

Group's valuation processes and techniques

The Group's processes and procedures governing the fair valuations are established by the Group Market Counterparty Risk Sector in line with the Group's accounting policies. The Group uses widely recognized valuation models for determining the fair value of common financial instruments that are not quoted in an active market, such as interest and cross currency swaps, that use only observable market data and require little management estimation and judgment. Observable prices or model inputs are usually available in the market for listed debt and equity securities, exchange-traded and simple over-the-counter derivatives. Availability of observable market prices and model inputs reduces the need for management judgment and estimation and also reduces the uncertainty associated with determining fair values.

Where valuation techniques are used to determine the fair values of financial instruments that are not quoted in an active market, they are validated against historical data and, where possible, against current or recent observed transactions in different instruments, and periodically reviewed by qualified personnel independent of the personnel that created them. All models are certified before they are used and models are calibrated to ensure that outputs reflect actual data and comparative market prices. Fair values estimates obtained from models are adjusted for any other factors, such as liquidity risk or model uncertainties, to the extent that market participants would take them into account in pricing the instrument. Fair values also reflect the credit risk of the instrument and include adjustments to take account of the credit risk of the Group entity and the counterparty, where appropriate.

Valuation controls applied by the Group may include verification of observable pricing, re-performance of model valuations, review and approval process for new models and/or changes to models, calibration and back-testing against observable market transactions, where available, analysis of significant valuation movements, etc. Where third parties' valuations are used for fair value measurement, these are reviewed in order to ensure compliance with the requirements of IFRS 13.

OTC derivative financial instruments are fair valued by discounting expected cash flows using market interest rates at the measurement date. Counterparty credit risk adjustments and own credit risk adjustments are applied to OTC derivatives, where appropriate. Bilateral credit risk adjustments consider the expected cash flows between the Group and its counterparties under the relevant terms of the derivative instruments and the effect of the credit risk on the valuation of these cash flows. As appropriate in circumstances, the Group considers also the effect of any credit risk mitigating arrangements, including collateral agreements and master netting agreements on the calculation of credit risk valuation adjustments (CVAs). CVA calculation uses probabilities of default (PDs) based on observable market data as credit default swaps (CDS) spreads, where appropriate, or based on internal rating models. The Group applies similar methodology for the calculation of debit-value-adjustments (DVAs), when applicable. Where valuation techniques are based on internal rating models and the relevant CVA is significant to the entire fair value measurement, such derivative instruments are categorized as Level 3 in the fair value hierarchy. A reasonably possible change in the main unobservable input (i.e. the recovery rate), used in their valuation, would not have a significant effect on their fair value measurement.

The Group determines fair values for debt securities held using quoted market prices in active markets for securities with similar credit risk, maturity and yield, quoted market prices in non active markets for identical or similar financial instruments, or using discounted cash flows method.

For debt securities issued by the Group and designated at FVTPL, fair values are determined by discounting the expected cash flows at a risk-adjusted rate, where the Group's own credit risk is determined using inputs indirectly observable, i.e. quoted prices of similar securities issued by the Group or other Greek issuers.

Unquoted available-for-sale equity instruments are estimated mainly (i) using third parties' valuation reports based on investees' net assets, where management does not perform any further significant adjustments, and (ii) net assets' valuations, adjusted where considered necessary.

Financial instruments not carried at fair value

The following table presents the carrying amounts and fair values of financial assets and liabilities which are not carried at fair value on the balance sheet:

		30 September 2016
	Carrying	Fair
	amount	value
	€ million	€ million
Loans and advances to customers	39,117	38,889
Investment securities
- Debt securities lending portfolio	9,452	9,078
- Held-to-maturity securities	567	565
Total financial assets	49,136	48,532
Debt securities in issue	101	85
Total financial liabilities	101	85
		31 December 2015
	Carrying	Fair
	amount	value
	€ million	€ million
Loans and advances to customers	39,893	39,748
Investment securities
- Debt securities lending portfolio	11,391	11,104
- Held-to-maturity securities	618	610
Total financial assets	51,902	51,462
Debt securities in issue	112	95
Total financial liabilities	112	95

The assumptions and methodologies underlying the calculation of fair values of financial instruments not carried at fair value are in line with those used to calculate the fair values for financial instruments carried at fair value. Particularly:

• (a) Loans and advances to customers: for loans and advances to customers quoted market prices are not available as there are no active markets where these instruments are traded. The fair values are estimated by discounting future expected cash flows over the time period they are expected to be recovered, using appropriate risk-adjusted rates. Loans are grouped into homogenous assets with similar characteristics, as monitored by Management, such as product, borrower type and delinquency status, in order to improve the accuracy of the estimated valuation outputs. In estimating future cash flows, the Group makes assumptions on expected prepayments, product spreads and timing of collateral realization. The discount rates incorporate inputs for expected credit losses and interest rates, as appropriate.
• (b) Investment securities carried at amortized cost: the fair values of financial investments are determined using prices quoted in an active market when these are available. In other cases, fair values are determined using quoted market prices for securities with similar credit risk, maturity and yield, quoted market prices in non active markets for identical or similar financial instruments, or by using the discounted cash flows method.
• (c) Debt securities in issue: the fair values of the debt securities in issue are determined using quoted market prices, if available. If quoted prices are not available, fair values are determined based on quotes for similar debt securities or by discounting the expected cash flows at a risk-adjusted rate, where the Group's own credit risk is determined using inputs indirectly observable, i.e. quoted prices of similar securities issued by the Group or other Greek issuers.

For other financial instruments which are short term or re-price at frequent intervals (cash and balances with central banks, due from credit institutions, due to central banks, due to credit institutions and due to customers), the carrying amounts represent reasonable approximations of fair values.

28. Cash and cash equivalents and other information on Interim Cash Flow Statement

For the purpose of the cash flow statement, cash and cash equivalents comprise the following balances with original maturities of three months or less:

	30 September	31 December
	2016	2015
	€ million	€ million
Cash and balances with central banks (excluding mandatory and collateral deposits with
central banks)	822	1,239
Due from credit institutions	603	906
Cash and cash equivalents presented within assets of disposal groups classified as held for sale	25	60
Total	1,450	2,205

Other (income)/losses on investment securities presented in continuing operating activities are analyzed as follows:

	30 September	30 September
	2016	2015
	€ million	€ million
Amortisation of premiums/discounts and accrued interest	(11)	(57)
(Gains)/losses from sale	(99)	(13)
Dividends	(2)	(2)
Total	(112)	(72)

For the period ended 30 September 2016, other adjustments on profit before income tax from continuing operations include the gain on the acquisition of the Alpha Bank's Branch in Bulgaria, amounting to € 55 million (note 30).

29. Contingent liabilities and commitments

Credit related commitments are analyzed as follows:

	30 September	31 December
	2016	2015
	€ million	€ million
Guarantees (1) and standby letters of credit	624	575
Other guarantees (medium risk) and documentary credits	459	503
Commitments to extend credit	386	353
	1,469	1,431

(1) Guarantees that carry the same credit risk as loans.

Irrevocable payment commitments

Pursuant to a decision of the Single Resolution Board (the 'SRB') notified to financial institutions, the Bank signed an irrevocable payment commitment and collateral arrangement agreement with the SRB in May 2016 of an amount of € 3.7 million representing 15% of its resolution contribution for the year 2016.

According to the agreement, which is backed by cash collateral of an equal amount, the Bank undertook to pay to the SRB an amount up to the irrevocable payment commitment, in case of a call and demand for payment made by it, in relation to a resolution action. The said cash collateral is recognized as a financial asset as of 30 June 2016 (note 18).

Legal Proceedings

As at 30 September 2016 there were a number of legal proceedings outstanding against the Group for which a provision of € 65 million was recorded (31 December 2015: € 66 million). The said amount includes € 40 million for the outstanding litigations with DEMCO S.A., which is related to the acquisition of New TT Hellenic Postbank S.A. in 2013.

Against the Bank various remedies have been filed in the form of lawsuits, applications for injunction measures and motions to vacate payment orders in relation to the contractual clauses of mortgage loans granted by the Bank in Swiss Francs (CHF) and the conditions under which the loans were granted. A class action has also been filed. To date there exist only first instance court judgments. In this sense it may be contended that the legal issue of the validity of the loans in CHF has not been finally resolved since this requires a judgment at a supreme court level. On the class action a judgment was issued which accepted it, the Bank,

though, intends to challenge it before the Court of Appeals as erroneous. In relation to the individual lawsuits the majority of the judgments issued are in favor of the Bank.

The Management of the Bank is closely monitoring any developments to the relevant cases to determine potential accounting implications in accordance with the Group's accounting policies.

30. Acquisition of Alpha Bank's Branch in Bulgaria by Eurobank Bulgaria A.D.

On 1 March 2016, the acquisition of the entirety of the operations of Alpha Bank's Bulgarian Branch ('Branch') by Eurobank's subsidiary in Bulgaria, Eurobank Bulgaria A.D. ('Postbank'), was completed after obtaining the relevant regulatory approvals. The consideration for the acquisition of the Branch was € 1.

The acquisition of the Branch was accounted for as a business combination using the purchase method of accounting. The initial accounting for the business combination, including the fair value measurement of the assets and liabilities acquired, has not been finalized.

The provisional fair values of the assets and liabilities acquired are presented in the table below:

	Fair Value
	(Provisional
	values)
Assets	€ million
Cash and balances with central banks	148
Due from credit institutions	30
Net loans and advances to customers	266
Gross contractual amount: € 394 million
Other assets (1)	6
Total Assets (2)	450
Liabilities
Due to credit institutions	162
Due to customers	283
Other liabilities	2
Total Liabilities	447

(1) Includes property, plant and equipment, intangibles assets and other assets.

(2) Includes cash and cash equivalents of € 40 million.

In addition, in the context of the business combination, on 2 March 2016 the Bank acquired € 55 million of Postbank's liabilities to Alpha Bank Group for a consideration of € 1.

The resulting total gain on the acquisition of the Branch, amounting to € 55 million net of acquisition-related costs of € 3 million, is attributed to the particular circumstances of the acquisition in line with the restructuring plans for Alpha Bank and Eurobank and has been recognized in 'Other operating income'.

The results of the Branch were incorporated in the Group's financial statements prospectively, as of 1 March 2016. If the acquisition had occurred on 1 January 2016, the Branch would have contributed revenue of € 2.71 million and net loss of € 0.26 million to the Group for the period from 1 January 2016 up to the date of acquisition.

The acquisition of the Branch constitutes a step forward for Postbank to further strengthen its position in the Bulgarian banking sector and expand its customer base in both the retail and corporate business segments. Postbank is expected to benefit from significant synergies, while maintaining its strong capital ratios and substantial liquidity buffers.

31. Other significant and post balance sheet events

Framework for the sale and servicing of loans - Law 4354/2015

The Greek Law 4354/2015 as amended in 2016 and in force established an integrated and flexible framework for the outsourcing of management and transfer of claims from loans and credits granted by credit and financial institutions. Following the amendments of the above Law, which were enacted in the second quarter of 2016, it is provided among others that (a) two new types of companies are introduced in the Greek legal system: (i) Loans Management Companies (L.M.C.), which should be licensed by the Bank of Greece and are exclusively entrusted for the management of claims from loans and credits and (ii) Loans Transfer

Companies (L.T.C.), which must have entered into a servicing agreement with a L.M.C., (b) in addition to non - performing loans, performing loans can also independently be managed or transferred to the above companies, (c) the terms and conditions for the management and transfer of claims from loans and credits are further specified, (d) the refinancing of loans from L.M.C. is introduced, subject to the appropriate preconditions and (e) a specific tax regime is introduced for the above companies.

Agreement with KKR and EBRD on management of Large Corporate Non-Performing exposures

On 17 May 2016 Alpha Bank, Eurobank and KKR Credit reached a binding agreement to assign the management of credit and equity exposures to a selected number of Greek companies into a platform managed by Pillarstone. Subject to final Board approval, the European Bank for Reconstruction and Development (EBRD) is considering co-investing in partnership with KKR and the banks.

The platform will provide new long-term capital and operational expertise to large Greek corporate borrowers helping them stabilize, recover and grow for the benefit of all stakeholders. The Greek banks will participate in the upside potential of the businesses as performance recovers.

Bulgarian National Bank's (BNB) assessment of Bulgarian banking system

On 13 August 2016, the BNB published the results from the Asset Quality Review (AQR) and Stress Test (ST) of the Bulgarian banks. In particular, the BNB carried out:

(a) an AQR completed in June 2016, for the asset classes with a high risk of potential misstatement in the balance sheet, using as reference the data as at 31 December 2015 and

(b) a forward looking ST in July 2016, to assess the resilience of the banks to absorb shocks from hypothetical negative financial and macro economical developments.

The ST was based on the AQR-adjusted capital and risk-weighted assets. It applied two macroeconomic scenarios over a three-year horizon until 2018: (i) a baseline scenario which corresponded to the BNB macroeconomic forecast as of March 2016, and (ii) an adverse scenario which represented a simulation of plausible but low-probable hypothetical developments. In line with the latest European Banking Authority (EBA) practices, the ST did not contain a pass/fail threshold.

Eurobank Bulgaria A.D. ('Postbank') AQR results

The post AQR Common Equity Tier 1 (CET1) ratio of Postbank stands at 21.2% against a pre AQR CET1 ratio of 22.2%, well above the 4.5% regulatory minimum, which is indicative of the strong capital position of the bank. The AQR of Postbank was a prudential exercise that did not have a significant impact on the Group's financial statements.

Postbank Stress test results

The CET1 ratio of Postbank under the baseline scenario stands at 27.1%, while under the adverse scenario stands at 19.7%, well above the minimum regulatory requirements.

Legislation on the conversion of CHF denominated loans to Romanian Leu

On 18 October 2016, the Romanian parliament unanimously passed a bill that allows borrowers to convert Swiss francdenominated loans into local currency 'Leu' using the exchange rate prevailing on the date they were originated. The above law provision has not come into force yet. The Romanian Constitutional Court (RCC) is currently reviewing its constitutionality, following the relevant request by the government and the date for issuing the decision has been established for 23 November 2016. The Group awaits the decisions and the reasoning of the RCC and reserves its right to assess the legal possibility to seek recourse to the supranational European Court of Justice.

In addition, the Group is closely monitoring any developments to determine the effect on its financial statements in accordance with its accounting policies.

Details of significant post balance sheet events are provided in the following notes:

Note 2-Principal accounting policies Note 4-Greek Economy Liquidity Support Program Note 10-Impairment allowance for loans and advances to customers Note 15-Investment securities

Note 17-Shares in subsidiary undertakings Note 18-Other assets Note 19-Due to central banks Note 22-Debt securities in issue Note 33-Board of Directors

32. Related parties

In November 2015, following the completion of the Bank's share capital increase, fully covered by investors, institutional and others the percentage of the Bank's ordinary shares with voting rights held by the HFSF decreased from 35.41% to 2.38%.

Despite the aforementioned significant decrease of its percentage, the HFSF is still considered to have significant influence over the Bank. In particular, in the context of the Law 3864/2010, as in force, HFSF exercises its voting rights in the Bank's General Assembly only for decisions concerning the amendment of the Bank's Articles of Association, including the increase or decrease of the Bank's capital or the granting of a corresponding authorization to the Bank's Board, decisions concerning the mergers, divisions, conversions, revivals, extension of duration or dissolution of the Bank, the transfer of assets (including the sale of subsidiaries), or any other issue requiring approval by an increased majority as provided for in Company Law 2190/1920. In addition, the Bank has entered into a new Relationship Framework Agreement (RFA) with the HFSF on 4 December 2015 replacing the previous one, signed on 26 August 2014, which regulates, among others, (a) the Bank's corporate governance, (b) the restructuring plan and its monitoring, (c) the monitoring of the implementation of the Bank's Non-Performing Loans (NPL) management framework and of the Bank's performance on NPL resolution, (d) the Material Obligations and the switch to full voting rights, (e) the monitoring of the Bank's actual risk profile against the approved Risk and Capital Strategy, (f) the HFSF's prior written consent for the Bank's Group Risk and Capital Strategy and for the Bank's Group Strategy, Policy and Governance regarding the management of its arrears and non-performing loans and (g) the duties, rights and obligations of HFSF's Representative in the Bank's Board.

A number of banking transactions are entered into with related parties in the normal course of business and are conducted on an arm's length basis. These include loans, deposits and guarantees. In addition, as part of its normal course of business in investment banking activities, the Group at times may hold positions in debt and equity instruments of related parties.

The outstanding balances of the transactions with (a) the key management personnel (KMP) and the entities controlled or jointly controlled by KMP as well as (b) the associates and joint ventures, and the relating income and expenses are as follows:

	30 September 2016 31 December 2015
	KMP(1) & Entities		KMP(1) & Entities
	controlled or jointly	Associates (3) &	controlled or jointly	Associates &
	controlled by KMP	joint ventures	controlled by KMP	joint ventures
	€ million	€ million	€ million	€ million
Loans and advances to customers net of provision(2)	7.22	23.33	6.81	5.91
Other assets	-	4.14	-	-
Due to customers	5.79	120.71	5.28	8.57
Debt securities in issue	-	11.95	-	-
Other liabilities	0.02	3.79	0.14	-
Guarantees issued	-	32.17	-	-
Guarantees received	0.09	-	0.10	-
	Nine months ended 30 September 2016		Nine months ended 30 September 2015
Net interest income	0.02	-	0.03	0.09
Net banking fee and commission income	-	0.02	0.01	-
Net trading income	-	(0.38)	-	-
Gains less losses from investment securities(4)	-	0.18	-	-
Impairment losses on loans and advances	-	(0.01)	-	-
Other operating income/(expenses)	-	(0.16)	(0.21)	-

(1)Includes the key management personnel of the Group and their close family members.

(2) Includes an impairment allowance of € 16.86 million against loans balances with a Group's associated undertaking and a joint venture.

(3) As of 4 August 2016, Eurolife insurance Group has been accounted for as an associate (note 13).

(4) From August to September 2016, the Bank proceeded with the sale of GTBs of € 219 million face value to the Eurolife insurance Group.

For the period ended 30 September 2016, there were no material transactions with the HFSF. As at 31 December 2015, the Group had recorded a receivable of € 2 million from HFSF, which has been collected in the first quarter of 2016.

In addition, as at 30 September 2016 the loans, net of provisions, granted to non consolidated entities controlled by the Bank pursuant to the terms of the relevant share pledge agreements (note 17) amounted to € 5.2 million (31 December 2015: € 4.3 million).

Key management compensation (directors and other key management personnel of the Group)

Key management personnel are entitled to compensation in the form of short-term employee benefits of € 3.88 million (30 September 2015: € 5.05 million) and long-term employee benefits (excluding share-based payments) of € 0.55 million (30 September 2015: € 0.70 million). Additionally, the Group has recognized € 0.57 million expense relating with GRIVALIA PROPERTIES's equity settled share based payments (30 September 2015: 0.6 million expense).

33. Board of Directors

The Board of Directors was elected by the Annual General Meeting held on 27 June 2013 for a three years term of office. The Annual General Meeting held on 26 June 2015 approved the extension of the term of office of the current Board until 2018 and more specifically by 27 June 2018, prolonged until the end of the period the Annual General Meeting for the year 2018 will take place.

On 15 June 2016, the Annual General Meeting elected two new Board members, Mrs. Lucrezia Reichlin and Mr. Jawaid Mirza, whose term of office will expire concurrently with the term of office of the other members of the Board of Directors, and designated those new members as independent non-executive Directors.

On 26 October 2016, the Board of Directors appointed Mr. George Myhal as new Board member in replacement of the resigned Board member Mr. Jon Steven Haick, for an equal term to the remaining term of the resigned member.

On 3 November 2016, Mr. Spyros Lorentziadis submitted his resignation from the Board of Directors.

Following the above, the Board of Directors is as follows:

N. Karamouzis	Chairman, Non-Executive
F. Karavias	Chief Executive Officer
S. Ioannou	Deputy Chief Executive Officer
T. Kalantonis	Deputy Chief Executive Officer
W. S. Burton	Non-Executive
G. Chryssikos	Non-Executive
G. Myhal	Non-Executive Independent
B. P. Martin	Non-Executive Independent
S. L. Johnson	Non-Executive Independent
J. Mirza	Non-Executive Independent
L. Reichlin	Non-Executive Independent
C. Andreou	Non-Executive (Greek State representative under Law 3723/2008)
K. H. Prince – Wright	Non-Executive (HFSF representative under Law 3864/2010)

Athens, 15 November 2016

CHAIRMAN OF THE BOARD OF DIRECTORS

CHIEF EXECUTIVE OFFICER

Nikolaos V. Karamouzis Fokion C. Karavias Harris V. Kokologiannis I.D. No ΑΒ – 336562 I.D. No ΑΙ ‐ 677962 I.D. No AK-021124 GENERAL MANAGER OF GROUP FINANCE GROUP CHIEF FINANCIAL OFFICER