OTP Banka Slovensko, a.s.

Transcription

1 OTP Banka Slovensko, a.s. Separate Financial Statements prepared in accordance with International Accounting Standard IAS 34 Interim financial reporting

2 Contents Page Separate Financial Statements: Separate Statement of Financial Position 1 Separate Statement of Comprehensive Income 2 Separate Statement of Changes in Equity 4 Separate Statement of Cash Flows 5 Notes to the Separate Financial Statements 6 48

3 The accompanying notes on pages 6 to 48 are an integral part of these separate financial statements. 1

4 Separate Statement of Comprehensive Income for the Period ended Note Period Ended Period Ended 30 June 2015 Interest income Interest expense (4 764) (7 616) Net interest income Provisions for impairment losses on loans and off-balance sheet, net 24 (8 928) (7 047) Net interest income after provisions for impairment losses on loans and off-balance sheet Fee and commission income Fee and commission expense (1 867) (1 630) Net fee and commission income Gains/(losses) on financial transactions, net 26 (258) (836) Gains/(losses) on financial assets, net General administrative expenses 28 (19 327) (19 221) Other operating revenues/(expenses), net 29 (21) 54 Profit/(loss) before income tax Income tax 19 (840) (414) Net profit/(loss) after tax Items of other comprehensive income that will be reclassified subsequently to profit or loss, net of tax Revaluation of available-for-sale financial assets 30 (2 688) 424 Total comprehensive income for the reporting period Profit/(loss) per share in face value of EUR 3.98 (in EUR) Profit/(loss) per share in face value of EUR (in EUR) Profit/(loss) per share in face value of EUR 1.00 (in EUR) The accompanying notes on pages 6 to 48 are an integral part of these separate financial statements. 2

5 Separate Statement of Comprehensive Income for the period ended Note 2Q Q 2015 Interest income Interest expense (2 180) (3 582) Net interest income Provisions for impairment losses on loans and off-balance sheet, net 24 (5 303) (3 875) Net interest income after provisions for impairment losses on loans and off-balance sheet Fee and commission income Fee and commission expense (957) (851) Net fee and commission income Gains/(losses) on financial transactions, net 26 (119) (441) Gains/(losses) on financial assets, net General administrative expenses 28 (9 712) (9 624) Other operating revenues/(expenses), net 29 (41) 25 Profit/(loss) before income tax Income tax 19 (651) (95) Net profit/(loss) after tax Items of other comprehensive income that will be reclassified subsequently to profit or loss, net of tax Revaluation of available-for-sale financial assets 30 (2 500) (193) Total comprehensive income for the reporting period (423) 266 Profit/(loss) per share in face value of EUR 3.98 (in EUR) Profit/(loss) per share in face value of EUR (in EUR) Profit/(loss) per share in face value of EUR 1.00 (in EUR) The accompanying notes on pages 6 to 48 are an integral part of these separate financial statements. 3

6 Separate Statement of Changes in Equity as at Share Capital Reserve Funds Retained Earnings Revaluation of Availablefor-Sale Financial Assets Profit/ (Loss) for the year Total Equity as at 1 Jan Share-based payments Total comprehensive income Equity as at 31 Dec Share Capital Reserve Funds Retained Earnings Revaluation of Availablefor-Sale Financial Assets Profit/ (Loss) for the reporting period Total Equity as at 1 Jan Share-based payments Total comprehensive income Equity as at 30 June Share Capital Reserve Funds Retained Earnings Revaluation of Availablefor-Sale Financial Assets Profit/ (Loss) for the reporting period Total Equity as at 1 Jan Transfers (295) Share-based payments Total comprehensive income (2 688) Equity as at The accompanying notes on pages 6 to 48 are an integral part of these separate financial statements. 4

7 Separate Statement of Cash Flows for the Period ended Note Period Ended Period Ended 30 June 2015 CASH FLOW FROM OPERATING ACTIVITIES Net profit/(loss) after tax Adjustments to reconcile net income/(loss) to net cash provided by operating activities: Provisions for loans and off-balance sheet Provisions for other assets 1 (7) Provisions for contingent liabilities 61 (612) Provisions for investments in subsidiaries (1 109) - Depreciation and amortisation Net effect of assets sold 27 - Net effect of income tax Share-based payments Changes in operating assets and liabilities: Net decrease/(increase) in statutory minimum reserves stipulated by the National Bank of Slovakia (40 868) (20 551) Net decrease/(increase) in placements with other banks - - Net decrease/(increase) in financial assets at fair value through profit or loss 216 (661) Net decrease/(increase) in available-for-sale financial assets (742) (662) Net decrease/(increase) in loans and receivables before provisions for possible losses (8 134) (14 368) Net (decrease)/increase in amounts due to banks and deposits from the National Bank of Slovakia and other banks - (13) Net (decrease)/increase in amounts due to customers (67 388) Net decrease/(increase) in other assets before provisions for possible losses (935) 182 Net (decrease)/increase in other liabilities Net cash flows from/(used in) operating activities (95 381) CASH FLOW FROM INVESTMENT ACTIVITIES Net decrease/(increase) in held-to-maturity investments Net decrease/(increase) in investments in subsidiaries Net decrease/(increase) in non-current tangible and intangible assets (993) (256) Net cash flows from/(used in) investment activities CASH FLOW FROM FINANCING ACTIVITIES Net (decrease)/increase in issued debt securities (16 094) Net (decrease)/increase in subordinated debt 4 (29 044) Net cash flows from/(used in) financial activities (45 138) Net increase/(decrease) in cash and cash equivalents (4 720) (1 819) Cash and cash equivalents at the beginning of the reporting period Cash and cash equivalents at the end of the reporting period The accompanying notes on pages 6 to 48 are an integral part of these separate financial statements. 5

8 1. Introduction OTP Banka Slovensko, a.s. (hereinafter the Bank or OTP Slovensko ) was established on 24 February 1992 and incorporated on 27 February The Bank s seat is at Štúrova 5, Bratislava. The Bank s identification number (IČO) is and its tax identification number (DIČ) is Members of Statutory and Supervisory Boards as at Board of Directors: Ing. Zita Zemková (Chairman) Ing. Rastislav Matejsko Dr. Sándor Patyi Supervisory Board: József Németh (Chairman) Ágnes Rudas Atanáz Popov Péter Forrai Ing. Jozef Brhel Ing. Angelika Mikócziová Changes in the Bank in 2016: Board of Directors: Supervisory Board: Mgr. Peter Leško, office terminated with effect from 30 May 2016 Átanáz Popov, office terminated with effect from 12 April 2016 and re-elected to the office with effect from 13 April 2016 Shareholders Structure The majority shareholder of the Bank is OTP Bank Nyrt. Hungary ( OTP Bank Nyrt. ) with 99.26% share of the Bank s share capital. OTP Bank Nyrt. is the direct parent company of the Bank. The shareholders structure (with respective shares exceeding 1%) and their share on the share capital are as follows: Name/Business Name Share in Subscribed Share Capital as at Share in Subscribed Share Capital as at 31 Dec 2015 OTP Bank Nyrt. Hungary 99.26% 99.26% Other minority owners 0.74% 0.74% The shareholders shares of voting rights are equal to their shares of the share capital. These notes are an integral part of these separate financial statements. 6

9 2. Principal Accounting Policies The separate financial statements of the Bank for the period ended have been prepared in accordance with the International Accounting Standard IAS 34 Interim Financial Reporting as adopted by the European Union ( EU ). Accounting principles and accounting methods applied in these financial statements do not differ from those, that have been applied in separate financial statements for the year ended 31 December 2015, unless stipulated otherwise. The separate financial statements of the Bank for the period ended should be considered together with the separate financial statements of the Bank for the year ended 31 December 2015, as not all information and disclosures required in the annual financial statements are included. Purpose of Preparation These separate financial statements were prepared in Slovakia so as to comply with the article 17a) of Act on Accounting No. 431/2002 Coll. as amended, under special regulations - Regulation (EC) 1606/2002 of the European Parliament and of the Council on the Application of International Accounting Standards (IFRS). Basis for the Financial Statements Preparation Separate financial statements were prepared under the historical cost basis, except for certain financial instruments, which have been recognised at fair value. The financial statements were prepared under the accrual principle of accounting: transactions and recognised events are recorded in the period to which they are related in time. Separate financial statements were prepared under the assumption that the Bank will continue as a going concern in the foreseeable future. The reporting currency used for disclosure in these separate financial statements is the Euro, which is rounded to thousands of euros, unless stipulated otherwise. The amounts in brackets refer to negative values. These notes are an integral part of these separate financial statements. 7

10 3. Fair Value of the Bank s Financial Assets and Liabilities The following tables present an analysis of financial instruments that are measured after their initial recognition at fair value. Financial instruments are classified into three levels/categories based on the level of the fair value determination: (EUR 000) Level 1 Level 2 Level 3 TOTAL Assets Financial assets at fair value through profit or loss Derivative financial instruments for trading Available-for-sale financial assets Available-for-sale securities bonds issued by foreign banks Available-for-sale securities shares Liabilities Liabilities from derivative transactions December 2015 (EUR 000) Level 1 Level 2 Level 3 TOTAL Assets Financial assets at fair value through profit or loss Derivative financial instruments for trading Available-for-sale financial assets Available-for-sale securities bonds issued by foreign banks Available-for-sale securities shares Liabilities Liabilities from derivative transactions The following table presents a comparison of the estimated fair value and carrying amount of the selected financial assets and liabilities where the difference between such values is material: Fair Value Net Book Value Difference Assets Loans and receivables Held-to-maturity financial investments Liabilities Amounts due to customers Liabilities from issued debt securities (34) Fair Value 31 Dec 2015 Net Book Value 31 Dec 2015 Difference 31 Dec 2015 Assets Loans and receivables Held-to-maturity financial investments Liabilities Amounts due to customers Liabilities from issued debt securities These notes are an integral part of these separate financial statements. 8

11 Supplementary Data to the Financial Statements 4. Cash, Due from Banks and Balances with the National Bank of Slovakia 31 Dec 2015 Cash on hand: In EUR In foreign currency Due from banks and balances with NBS: Residual maturity within one year: In EUR In foreign currency Total Placements with Other Banks, Net of Provisions for Possible Placement Losses 31 Dec 2015 Residual maturity within one year: In EUR - 1 In foreign currency Total Financial Assets at Fair Value through Profit or Loss 31 Dec 2015 Derivative financial instruments held for trading (Note 22) Total financial instruments held for trading Available-for-sale financial assets 31 Dec 2015 Available-for-sale securities bonds issued by foreign banks Available-for-sale securities shares of foreign entities* Investments in corporate entities Total financial instruments available-for-sale * In connection with a transaction announced on 2 November 2015 VISA Inc. has acquired 100% of the shares of VISA Europe Ltd. in the first half of Consequently the Bank derecognized the shares of VISA Europe Ltd. from the available-for-sale portfolio and recognized shares of VISA Inc. in the available-for-sale portfolio. The fair value of the VISA Inc. shares was determined as 0 EUR due to their restricted tradeability on the market. These notes are an integral part of these separate financial statements. 9

12 The structure as per interest rates and residual maturities (except for investments in corporations) is provided below: 31 Dec 2015 Less than five years, fixed interest rates Within one year, interest-free Total As at, the Bank recognised no pledged securities as part of available-for-sale financial assets (31 December 2015: EUR 0). An analysis of investments in corporate entities as at and 31 December 2015 (unless otherwise indicated, the companies are incorporated in Slovakia) is as follows: Share Company Name Business Activity Cost Provision Net OTP Buildings, s.r.o. Real estate 19.00% 19.00% S.W.I.F.T (Belgium) International clearing 0.005% 0.005% 6-6 RVS, a.s. Wellness 12.65% 12.09% Total Loans and Receivables, Net of Provisions for Possible Losses Loans and Receivables by Type of Product Carrying Amount Before Provisions Specific Provision Portfolio Provision Carrying Amount After Provisions Corporate loans Corporate clients Overdrafts Mass loans Mortgage loans Factoring loans Other Retail loans Mortgage loans Consumer loans Other Total Dec 2015 Carrying Amount Before Provisions Specific Provision Portfolio Provision Carrying Amount After Provisions Corporate loans Corporate clients Overdrafts Mass loans Mortgage loans Factoring loans Other Retail loans Mortgage loans Consumer loans Other Total These notes are an integral part of these separate financial statements. 10

13 The Summary of Provisions for Possible Loan Losses 31 Dec 2015 Balance at the beginning of reporting period Provisions for impairment losses on loans, net Loan write-offs and assignments (Note 24) - (16 559) Foreign exchange differences (1) 2 Balance at the end of reporting period Held-to-Maturity Financial Investments As at and 31 December 2015, the Bank recognised the following held-to-maturity investments: 31 Dec 2015 Government bonds Total held-to-maturity securities Investments in Subsidiaries As at and 31 December 2015, the Bank recognised the following investments in subsidiaries and associates: 31 Dec 2015 Subsidiaries Total gross value Provision for investments in subsidiaries - (1 109) Total net value - 93 An analysis of investments in subsidiaries, as at 31 December 2015 (all companies incorporated in Slovakia), is as follows: Company Company Seat Business Activity Ownership Interest/ Voting Power Held Faktoring SK, a.s. v likvidácii Tallerova 10, Bratislava Factoring % In 2010, as part of the strategic decisions made at the OTP Group level, a decision was made to terminate the activities of OTP Faktoring Slovensko, a.s. On 1 April 2011, OTP Faktoring Slovensko, a.s. entered into liquidation and its business name was changed to Faktoring SK, a.s. v likvidácii. As at 15 December 2015, the company s liquidation was completed. In 2015 the Bank created additional provisions in the amount of EUR 58 thousand to cover an expected loss from the liquidation. In the second quarter of 2016 the General Meeting of the company was held, on which the conclusions regarding the liquidation were confirmed and the decision on distribution of the liquidation balance in the amount of EUR 93 thousand was made. In connection with the settlement of the liquidation balance the Bank derecognized the investment in the subsidiary and reversed the relevant provisions. A summary of changes in provisions for investments in subsidiaries: 31 Dec 2015 Balance at the beginning of the reporting period Creation/(cancellation) of provisions net (1 109) 58 Balance at the end of the reporting period These notes are an integral part of these separate financial statements. 11

14 for Period Ended 11. Non-Current Tangible and Intangible Assets Movements of Assets Buildings and Land Fittings and Fixtures Motor Vehicles Tangible Assets in Acquisition Intangible Assets Intangible Assets in Acquisition Total Cost at 1 Jan Additions (+) Disposals (-) (315) (2 554) - (2 144) (1 235) (1 795) (8 043) Cost at 31 Dec Accumulated depreciation and provisions at 1 Jan Depreciation (+) Disposal (-) (201) (2 542) - - (1 235) - (3 978) Accumulated depreciation and provisions at 31 Dec Net book value at 31 Dec Cost at 1 Jan Additions (+) Disposals (-) (84) (7) (131) (1 176) - (701) (2 099) Cost at Accumulated depreciation and provisions at 1 Jan Depreciation (+) Disposal (-) (57) (7) (131) (195) Accumulated depreciation and provisions at Net book value at These notes are an integral part of these separate financial statements. 12

15 A summary of insurance of non-current tangible and intangible assets as at : Anticipated Annual Premium Actual Insurance Costs MTPL insurance 4 3 Motor hull insurance Insurance of assets Total Other Assets 31 Dec 2015 Loss receivables from various debtors Loss receivables from securities Operating advances made Inventories Deferred expenses Receivables from various debtors Receivables from shortages and damage Other receivables from clients Other receivables Other assets before provisions Provisions for possible losses from other assets (8 895) (8 893) Total other assets An analysis of movements in provisions for possible losses from other assets is as follows: 31 Dec 2015 Balance at the beginning of reporting period Provisions for impairment losses on other assets, net (Note 29) 1 (1) Other assets written-off and assigned (Note 29) 1 (2) Balance at the end of reporting period Due to Banks and Deposits from the National Bank of Slovakia and Other Banks 31 Dec 2015 Residual maturity within one year: In EUR In foreign currency Total Amounts due to banks by type of product: 31 Dec 2015 Deposits Term accounts of other banks Loans received from other financial institutions Other liabilities to financial institutions Total These notes are an integral part of these separate financial statements. 13

16 An analysis of received loans by individual types of banks (all loans are denominated in EUR, unless stated otherwise): Type of Loan According to Maturity Contractual Maturity as at 30 June Dec 2015 Loans received from banks: Reconstruction and development banks Long-term Individual Total Amounts due to Customers Amounts due to customers by type: 31 Dec 2015 Current accounts and other short-term amounts due to customers Term deposits Pass books Received loans Municipality accounts Other liabilities Total Amounts due to customers by sector: 31 Dec 2015 Non-financial organisations Individuals Financial institutions Trade licence holders Insurance companies Non-profit organisations Non-residents Government sector Not categorised in sectors - - Total Amounts due to customers by residual maturity: 31 Dec 2015 Residual maturity within one year: In EUR In foreign currency Residual maturity over one year: In EUR In foreign currency 11 9 Total These notes are an integral part of these separate financial statements. 14

17 15. Liabilities from Issued Debt Securities 31 Dec 2015 Residual maturity within one year: Liabilities from financial bills of exchange Liabilities from mortgage bonds Liabilities from issued bonds Residual maturity over one year: Liabilities from issued bonds Total In 1H of 2016 the Bank issued short-term bonds with a total face value of EUR thousand and long-term bonds with a total face value of EUR thousand. These notes are an integral part of these separate financial statements. 15

18 Summary of mortgage bonds as at and 31 December 2015: Mortgage Bonds Issued Currency Quantity Separate Financial Statements for Period Ended Face Value per Share in EUR Face Value of Issue Net Book Value Net Book Value 31 Dec 2015 Interest Income (coupon) Frequency of Coupon Payout Issue Date Due Date Mortgage bonds Issue XXV EUR % Annual 28 Sep Sep 2016 Mortgage bonds Issue XXVI* EUR M EURIBOR % p.a. Quarterly 30 Mar Mar 2016 Mortgage bonds Issue XXVII EUR M EURIBOR % p.a. Quarterly 17 Dec Dec 2016 Mortgage bonds Issue XXVIII** EUR M EURIBOR % p.a. Quarterly 30 Mar Mar 2017 Total * In 1Q of 2016 Mortgage Bonds, Issue XXVI matured with a total face value of EUR thousand. ** In 1Q of 2016 Mortgage Bonds, Issue XXVIII was sold with a total face value of EUR thousand. These notes are an integral part of these separate financial statements. 16

19 16. Other Liabilities 31 Dec 2015 Various creditors Tax liabilities (except for income tax liabilities) Provisions for unbilled and other liabilities Social fund Settlement with employees Settlement with social institutions Negative fair value of financial derivatives (Note 22) Liabilities from payment transactions Other liabilities Total Summary of changes in the social fund: 31 Dec 2015 Balance at the beginning of reporting period Additions during the reporting period Drawings during the reporting period (23) (209) Balance at the end of reporting period Subordinated Debt Type of Loan Curr. Type of Loan by Maturity Start of Contractual Loan Maturity Drawdown Interest Rate 30 June Dec 2015 Subordinated debt: OTP Financing Netherlands B.V. EUR Long-term Sep 2014 Sep M EURIBOR % p. a OTP Financing Malta Company Ltd. EUR Long-term Dec 2015 Dec M EURIBOR % p. a Total (EUR 000) Subordinated debt totalling EUR 20 million represents Tier 2 capital for the Bank in the amount of EUR 20 million pursuant to Regulation of the European Parliament and of the Council No. 575/2013 (Note 33). These notes are an integral part of these separate financial statements. 17

20 18. Equity The Bank s equity comprises: 31 Dec 2015 Share capital Reserve funds Retained earnings Revaluation of available-for-sale financial assets Gain/(loss) for the reporting period Total equity Share Capital The Bank s share capital as at and 31 December 2015 comprises: Face Amount ISIN Number of Shares Face Value of Shares Repaid and registered in the Commercial Register EUR 3.98 per share SK EUR 3.98 per share SK EUR per share SK EUR 1.00 per share SK EUR 1.00 per share SK Total share capital The type, form, nature and tradability of shares as at and 31 December 2015 was as follows: Face Amount ISIN Type Form Nature Tradability EUR 3.98 per share SK ordinary registered uncertified publicly tradable EUR 3.98 per share SK ordinary registered uncertified publicly tradable EUR per share SK ordinary registered uncertified publicly nontradable EUR 1.00 per share SK ordinary registered uncertified publicly tradable EUR 1.00 per share SK ordinary registered uncertified publicly tradable Reserve Funds As at, reserve funds in the amount of EUR thousand (31 December 2015: EUR thousand) comprise the legal reserve fund in the amount of EUR thousand (31 December 2015: EUR thousand) and other capital reserves in the amount of EUR thousand (31 December 2015: EUR 956 thousand). These notes are an integral part of these separate financial statements. 18

21 19. Income Taxes 30 June 2015 Current tax expense Deferred tax (income)/expense (631) (859) Total Current and Deferred Income Tax 31 Dec 2015 Current tax liability Total current tax liability Dec 2015 Deferred tax liability Difference between net book value and net tax value of tangible assets (642) (660) Revaluation reserves on available-for-sale securities (recognised through equity) (27) (785) Total deferred tax liability (669) (1 445) Deferred tax asset Loans (provisions for loan impairment losses) Provisions for liabilities Tax losses that can be carried forward Total deferred tax asset Adjustment for uncertain utilisation of deferred tax asset (3 182) (3 177) Net deferred tax asset/(liability) These notes are an integral part of these separate financial statements. 19

22 21. Provisions for Liabilities, Contingent Liabilities and Other Off-Balance Sheet Items Nominal values of the off-balance sheet liabilities are as follows: 31 Dec 2015 Unused loan commitments Other guarantees provided to banks Other guarantees provided to clients Unused overdrafts and authorised overdraft facilities Total The Bank recognised the following provisions: 31 Dec 2015 Provisions for: Unused loan commitments Guarantees Litigations and other disputes Retirement payments Total An analysis of changes in provisions for guarantees and unused loan commitments: 31 Dec 2015 Balance at the beginning of reporting period Creation of provision Release of provision (213) (470) Balance at the end of reporting period An analysis of changes in the provision for litigations and other disputes: 31 Dec 2015 Balance at the beginning of reporting period Creation of provision Use of provision (13) (606) Release of provision - (74) Balance at the end of reporting period An analysis of changes in the provision for retirement payments: 31 Dec 2015 Balance at the beginning of reporting period Creation of provision 7 32 Release of provision (15) (30) Balance at the end of reporting period These notes are an integral part of these separate financial statements. 20

23 22. Derivative Financial Instruments The Bank uses derivative financial instruments for trading purposes. The tables below represent the financial derivative instruments at face and fair values as at and 31 December 2015: Face Value of Assets Face Value of Liabilities 31 Dec Dec 2015 Currency instruments Currency swaps Total Positive Fair Value Negative Fair Value 31 Dec Dec 2015 Currency instruments Currency swaps Total Net Interest Income Period Ended Period Ended 30 June 2015 Interest income: Loans and other receivables Placements with other banks Financial assets for sale Held-to-maturity financial investments Total interest income Interest expense: Due to banks and deposits from the National Bank of Slovakia and other banks and other payables (2) (11) Amounts due to customers (4 193) (6 788) Liabilities from issued debt securities (254) (405) Subordinated debt (315) (412) Total interest expense (4 764) (7 616) Net interest income Q Q 2015 Interest income: Loans and other receivables Placements with other banks Financial assets for sale Held-to-maturity financial investments Total interest income Interest expense: Due to banks and deposits from the National Bank of Slovakia and other banks and other payables - (6) Amounts due to customers (1 900) (3 291) Liabilities from issued debt securities (125) (123) Subordinated debt (155) (162) Total interest expense (2 180) (3 582) Net interest income These notes are an integral part of these separate financial statements. 21

24 24. Provisions for impairment losses on loans and off-balance sheet, net Period Ended Period Ended 30 June 2015 Creation of provisions for loan receivables (17 671) (16 122) Release of provisions for loan receivables Loans written off and assigned (Note 8) - (3 118) (Creation)/reversal of provisions for guarantees and unused loan commitments, net (Note 21) (13) 65 Provisions for impairment losses on loans and off-balance sheet, net (8 928) (7 047) 2Q Q 2015 Creation of provisions for loan receivables (9 163) (8 830) Release of provisions for loan receivables Loans written off and assigned (Note 8) (Creation)/reversal of provisions for guarantees and unused loan commitments, net (Note 21) (22) 23 Provisions for impairment losses on loans and off-balance sheet, net (5 303) (3 875) 25. Net Fee and Commission Income Period Ended Period Ended 30 June 2015 Fee and commission income: Banks Public administration Individuals Other sectors Total fee and commission income Fee and commission expense: Banks (499) (462) Individuals (66) (48) Other sectors (1 302) (1 120) Total fee and commission expense (1 867) (1 630) Net fee and commission income Q Q 2015 Fee and commission income: Banks Public administration Individuals Other sectors Total fee and commission income Fee and commission expense: Banks (272) (244) Individuals (43) (19) Other sectors (642) (588) Total fee and commission expense (957) (851) Net fee and commission income These notes are an integral part of these separate financial statements. 22

25 26. Gains/(Losses) on Financial Transactions, Net Period Ended Period Ended 30 June 2015 Gain/(loss) from foreign exchange transactions Gain/(loss) from futures and forwards (663) (1 275) Net gains/(losses) on financial operations (258) (836) 2Q Q 2015 Gain/(loss) from foreign exchange transactions Gain/(loss) from futures and forwards (335) (636) Net gains/(losses) on financial operations (119) (441) The Bank carried out interrelated transactions within the Group, which are assessed as a whole. Such transactions include currency swaps concluded with the parent company and subsequent investing of available funds into treasury bills of a foreign central bank (Note 7) or through reverse repurchase transactions with the parent company (Note 5). The total profit/(loss) from such transactions is presented in the following table: Period Ended Period Ended 30 June 2015 Loss on fixed futures and forwards (672) (1 281) Interest income on reverse repurchase transactions Total (46) 603 2Q Q 2015 Loss on fixed futures and forwards (338) (641) Interest income on reverse repurchase transactions Total (59) Gains/(Losses) on Financial Assets, Net In 1H 2016, the Bank recognized following gains/(losses) on financial assets: Period Ended Period Ended 30 June 2015 Net gain/(loss) from transactions with financial assets Equity securities Investments in subsidiaries (1 109) - Net gain/(loss) from provisions for: Investments in subsidiaries Net gain/(losses) on financial assets Q Q 2015 Net gain/(loss) from transactions with financial assets Equity securities Investments in subsidiaries (1 109) - Net gain/(loss) from provisions for: Investments in subsidiaries Net gain/(losses) on financial assets These notes are an integral part of these separate financial statements. 23

26 28. General Administrative Expenses Period Ended Period Ended 30 June 2015 Personnel expenses Wages and salaries (6 674) (6 367) Social security expenses (2 257) (2 189) Supplementary pension scheme contributions (100) (88) Other social expenses (99) (87) Expenses for provisions (Creation)/release of provisions for retirement payments, net 8 12 Other administrative expenses Purchased services (2 897) (3 086) Expenses for IT administration and maintenance (1 243) (1 238) Entertainment expenses (918) (728) Other purchased supplies (668) (745) Local and other taxes other than income tax (482) (647) Special levy on selected financial institutions (1 320) (1 358) Contributions to other funds* (198) (158) Other expenses (114) (150) Depreciation, amortisation and write-downs of non-current tangible and intangible assets Non-current tangible assets (1 304) (1 303) Non-current intangible assets (1 061) (1 089) General administrative expenses - total (19 327) (19 221) *This item includes the estimation of a contribution to the Deposit Protection Fund and for a resolution fund for 1H/ Q Q 2015 Personnel expenses Wages and salaries (3 388) (3 195) Social security expenses (1 102) (1 074) Supplementary pension scheme contributions (59) (49) Other social expenses (56) (46) Expenses for provisions (Creation)/release of provisions for retirement payments, net - 3 Other administrative expenses Purchased services (1 464) (1 469) Expenses for IT administration and maintenance (635) (621) Entertainment expenses (534) (503) Other purchased supplies (318) (391) Local and other taxes other than income tax (243) (272) Special levy on selected financial institutions (655) (688) Contributions to other funds* (33) (80) Other expenses (50) (75) Depreciation, amortisation and write-downs of non-current tangible and intangible assets Non-current tangible assets (647) (650) Non-current intangible assets (528) (514) General administrative expenses - total (9 712) (9 624) These notes are an integral part of these separate financial statements. 24

27 29. Other Operating Revenues/(Expenses), Net Period Ended Period Ended 30 June 2015 Provisions for impairment losses on other assets Creation of provisions for other assets (10) (29) Release of provisions for other assets 8 36 Other assets written-off and assigned (Note 12) 1 - Costs for the creation of provisions (Creation)/release of provisions for litigations and other disputes and other risks, net (Note 21) (82) - Other revenues Revenues from sale of real estate and other assets (1) - Lease revenues 2 5 Revenues from sale of commemorative coins 14 1 Other operating revenues Other operating revenues/(expense), net (21) 54 2Q Q 2015 Provisions for impairment losses on other assets Creation of provisions for other assets (5) (24) Release of provisions for other assets 2 33 Other assets written-off and assigned (Note 12) 1 - Costs for the creation of provisions (Creation)/release of provisions for litigations and other disputes and other risks, net (Note 21) (82) - Other revenues Revenues from sale of real estate and other assets (1) - Lease revenues 1 3 Revenues from sale of commemorative coins 13 1 Other operating revenues Other operating revenues/(expense), net (41) Items of Other Comprehensive Income The items of other comprehensive income will be reclassified to profit or loss as at the derecognition of available-for-sale financial assets. Period Ended Period Ended 30 June 2015 Net gain/(loss) on revaluation of available-for-sale financial assets (3 446) 543 Deferred tax liability/(deferred tax asset) on revaluation reserves on available-for-sale financial assets 758 (119) Items of other comprehensive income that will be reclassified subsequently to profit or loss, net of tax (2 688) 424 2Q Q 2015 Net gain/(loss) on revaluation of available-for-sale financial assets (3 205) (248) Deferred tax liability/(deferred tax asset) on revaluation reserves on available-for-sale financial assets Items of other comprehensive income that will be reclassified subsequently to profit or loss, net of tax (2 500) (193) These notes are an integral part of these separate financial statements. 25

28 for Period Ended 31. Segment Reporting The separate statement of comprehensive income and other indicators by segment as at : Retail Corporate Treasury Not specified Total Interest income Interest expense (3 661) (532) (571) - (4 764) Net interest income Provisions for impairment losses on loans and offbalance sheet, net (7 945) (983) - - (8 928) Net interest income net of provisions for impairment losses on loans and off-balance sheet Fee and commission income Fee and commission expense (1 549) (10) (32) (276) (1 867) Net fee and commission income (28) (4) Gains/(losses) on financial transactions, net - - (258) - (258) Gains/(losses) on financial assets, net General administrative expenses (19 327) (19 327) Other operating revenues/(expenses), net 3 (1) - (23) (21) Profit/(loss) before income tax (19 354) Income tax (840) (840) Net profit/(loss) after tax (20 194) Items of other comprehensive income that will subsequently be reclassified to profit or loss, net of tax Revaluation of available-for-sale financial assets - - (2 688) - (2 688) Total comprehensive income for the reporting period (20 194) 90 Assets by segment Liabilities by segment These notes are an integral part of these separate financial statements. 26

29 for Period Ended The separate statement of comprehensive income and other indicators by segment as at 30 June 2015: 30 June 2015 Retail Corporate Treasury Not specified Total Interest income Interest expense (5 839) (949) (828) - (7 616) Net interest income Provisions for impairment losses on loans and offbalance sheet, net (3 084) (3 963) - - (7 047) Net interest income net of provisions for impairment losses on loans and off-balance sheet Fee and commission income Fee and commission expense (1 370) (12) (29) (219) (1 630) Net fee and commission income (24) Gains/(losses) on financial transactions, net - - (836) - (836) Gains/(losses) on financial assets, net General administrative expenses (19 221) (19 221) Other operating revenues/(expenses), net (7) Profit/(loss) before income tax (18 898) Income tax (414) (414) Net profit/(loss) after tax (19 312) Items of other comprehensive income that will subsequently be reclassified to profit or loss, net of tax Revaluation of available-for-sale financial assets Total comprehensive income for the reporting period (19 312) Assets by segment Liabilities by segment These notes are an integral part of these separate financial statements. 27

30 Foreign Assets and Liabilities The Bank provides banking services primarily in the territory of the Slovak Republic. Some assets and liabilities were placed outside of the Slovak Republic. The structure of assets and liabilities related to counterparties outside the Slovak Republic: 31 Dec 2015 Assets Of which: Hungary Of which: Other EU countries Liabilities Of which: Hungary Of which: Other EU countries As at and 31 December 2015, the Bank s non-current tangible and intangible assets were localised only in the territory of the Slovak Republic. Revenues from Foreign Entities Period Ended Period Ended 30 June 2015 Interest income on: Term deposits provided to OTP Bank Nyrt, (Hungary) Subordinated bonds issued by OTP Bank Nyrt, (Hungary) Reverse REPO transactions with OTP Bank Nyrt (Hungary) Q Q 2015 Interest income on: Term deposits provided to OTP Bank Nyrt, (Hungary) Subordinated bonds issued by OTP Bank Nyrt, (Hungary) Reverse REPO transactions with OTP Bank Nyrt (Hungary) The amount of income from other foreign entities is not significant for the Bank. These notes are an integral part of these separate financial statements. 28

31 for Period Ended 32. Related Party Transactions In ordinary business, the Bank enters into transactions with related parties made on an arm s length basis. The following tables present an overview of assets and liabilities, and expenses and revenues in relation to the Bank s related parties. Overview of balances in the statement of financial position as at : OTP Bank Nyrt. Subsidiaries Other Companies OTP Group Transactions with Key Management Personnel of the Bank Transactions with Key Management Personnel of OTP Bank Nyrt. Other Related Parties Total Assets Cash, due from banks and balances with the National Bank of Slovakia Placements with other banks, net of provisions for possible placement losses Financial assets at fair value through profit or loss Available-for-sale financial assets Loans and receivables, net of provisions for possible losses Held-to-maturity financial investments Investments in subsidiaries and associates Non-current tangible assets* Non-current intangible assets* Other assets Total Liabilities Due to banks and deposits from the National Bank of Slovakia and other banks Amounts due to customers Liabilities from issued debt securities Other liabilities Subordinated debt Total *Non-current tangible and non-current intangible assets are presented at net value. These notes are an integral part of these separate financial statements. 29

32 for Period Ended Overview of balances in the statement of financial position as at 31 December 2015: 31 Dec 2015 OTP Bank Nyrt. Subsidiaries Other Companies OTP Group Transactions with Key Management Personnel of the Bank Transactions with Key Management Personnel of OTP Bank Nyrt. Other Related Parties Total Assets Cash, due from banks and balances with the National Bank of Slovakia Placements with other banks, net of provisions for possible placement losses Financial assets at fair value through profit or loss Available-for-sale financial assets Loans and receivables, net of provisions for possible losses Held-to-maturity financial investments Investments in subsidiaries and associates Non-current tangible assets* Non-current intangible assets* Other assets Total Liabilities Due to banks and deposits from the National Bank of Slovakia and other banks Amounts due to customers Liabilities from issued debt securities Other liabilities Subordinated debt Total *Non-current tangible and non-current intangible assets are presented at net value. These notes are an integral part of these separate financial statements. 30

33 for Period Ended Overview of transactions in the statement of comprehensive income: OTP Bank Nyrt. Subsidiaries Other Companies OTP Group Transactions with Key Management Personnel of the Bank Transactions with Key Management Personnel of OTP Bank Nyrt. Other Related Parties Total Interest income Interest expense (88) - (319) (15) - (5) (427) Provisions for impairment losses on loans and offbalance sheet, net Fee and commission income Fee and commission expense (154) - (183) (337) Gains/(losses) on financial transactions (FX), net (665) (665) Gains/(losses) on financial assets, net Other operating revenues/(expenses), net General administrative expenses (177) - (615) * - - (792) Total (13) - (5) June 2015 OTP Bank Nyrt. Subsidiaries Other Companies OTP Group Transactions with Key Management Personnel of the Bank Transactions with Key Management Personnel of OTP Bank Nyrt. Other Related Parties Total Interest income Interest expense (193) - (413) (16) - - (622) Provisions for impairment losses on loans and offbalance sheet, net Fee and commission income Fee and commission expense (145) - (167) (312) Gains/(losses) on financial transactions (FX), net (1 292) (1 292) Gains/(losses) on financial assets, net Other operating revenues/(expenses), net General administrative expenses (195) - (667) * - - (862) Total (1 109) (15) - - (158) *see Key Management Personnel Compensation These notes are an integral part of these separate financial statements. 31

34 Key Management Personnel Compensation Compensation includes all short-term employee benefits, including all forms of countervalues paid, payable or provided by or on behalf of the reporting entity in exchange for services provided to the reporting entity. In 1H of 2016, compensation in the amount of EUR 422 thousand (1H of 2015: EUR 368 thousand) was paid to the members of the Board of Directors and the Supervisory Board; they are shortterm employee benefits. 33. Regulatory Capital In the period under review, the ratio of the Bank s total own funds exceeded the minimum level required by the EU and Slovak legislation. The Bank achieved the following shares: the share of Tier 1 own capital at 11.30%, the share of Tier 1 capital at 11.30% and the total share of capital at 13.47%. The structure of the Bank s regulatory capital is as follows: 31 Dec 2015 Tier 1 capital Tier 1 own capital Capital instruments allowable as Tier 1 own capital Repaid capital instruments Retained earnings Retained earnings from previous years Allowable gain or (-) loss - - Other provisions (-) Intangible assets (6 038) (6 788) (-) Other items decreasing the amount of Tier 1 own capital - - Tier 1 supplementary capital - - Tier 2 capital Repaid capital instruments and subordinated debt Positive revaluation reserves - - (-) Other items decreasing the amount of Tier 2 capital - - Regulatory capital Proportion of own capital (CET1) to risk-weighted assets 11.30% 11.20% Proportion of Tier 1 capital to risk-weighted assets 11.30% 11.20% Total proportion of capital to risk-weighted assets 13.47% 13.44% 34. Supplementary Data to Statements of Cash Flows 30 June 2015 Cash, due from banks and balances with NBS except for mandatory minimum reserve Deposits with other banks, falling due within three months Due to banks, falling due within three months (1 115) (36 504) Total cash and cash equivalents Significant non-cash movements excluded from cash flows are as follows: 30 June 2015 Write-off and assignments of loans (Note 8) - (3 118) These notes are an integral part of these separate financial statements. 32