Annual Financial Report
31 December 2023
According to Law 3556/2007
The information contained in this Annual Financial Report has been translated from the original Annual Financial
Report that has been prepared in the Greek language. In the event that differences exist between this translation
and the original Greek language Annual Financial Report, the Greek language Annual Financial Report will prevail
over this document.
INDEX
Statement of article 4 par. 2 of Law 3556/2007 ............................................................................................................................ 8
Board of Directors' Report
Board of Directors’ Annual Report ................................................................................................................................................. 9
Corporate Governance Statement ............................................................................................................................................... 52
Explanatory report ..................................................................................................................................................................... 120
Alternative Performance Measures (“APMs”) at Group level ................................................................................................... 125
Appendix A - Reporting templates in accordance with Delegated Regulation (EU) 2021/2178, Annexes VI and XII ................ 132
Independent auditor’s report ..................................................................................................................................................... 162
Annual Financial Statements
Income Statement ..................................................................................................................................................................... 176
Statement of Comprehensive Income ....................................................................................................................................... 177
Statement of Financial Position ................................................................................................................................................. 178
Statement of Changes in Equity ................................................................................................................................................. 180
Cash Flow Statement ................................................................................................................................................................. 182
Notes to the Annual Financial Statements
1 General information ................................................................................................................................................................ 183
2 Basis of preparation and significant accounting policies ........................................................................................................ 184
2.1 Basis of preparation ............................................................................................................................................................................. 184
2.2 Going concern ...................................................................................................................................................................................... 185
2.3 Adoption of International Financial Reporting Standards .................................................................................................................... 189
2.4 Material accounting policies ................................................................................................................................................................ 190
3 Critical accounting judgements and key sources of estimation uncertainty .......................................................................... 212
3.1 Critical judgements in applying the Group’s accounting policies ......................................................................................................... 212
3.2 Key sources of estimation uncertainty ................................................................................................................................................. 213
4 Financial Risk Management .................................................................................................................................................... 218
4.1 Risk Management Framework ............................................................................................................................................................. 218
4.2 Credit Risk ............................................................................................................................................................................................ 224
4.3 Credit Risk Management ...................................................................................................................................................................... 241
4.4 Forbearance ......................................................................................................................................................................................... 275
4.5 Debt to equity transactions .................................................................................................................................................................. 280
4.6 Investment securities ........................................................................................................................................................................... 280
4.7 Concentration of risks of financial assets with credit risk exposure..................................................................................................... 281
4.8 Offsetting of financial assets and liabilities .......................................................................................................................................... 289
4.9 Market risk ........................................................................................................................................................................................... 291
4.10 Currency risk ...................................................................................................................................................................................... 292
4.11 Interest rate risk ................................................................................................................................................................................. 295
4.12 Liquidity risk ....................................................................................................................................................................................... 298
4.13 Transfers of financial assets ............................................................................................................................................................... 300
4.14 Financial instruments not measured at fair value .............................................................................................................................. 301
4.15 Financial assets and liabilities measured at fair value ........................................................................................................................ 302
4.16 Capital adequacy ................................................................................................................................................................................ 307
4.17 Risks related to the recognition of the main part of deferred tax assets as claims (Deferred Tax Credits) against the Greek State as
regulatory capital or as an asset ................................................................................................................................................................ 309
4.18 IBOR Reform ....................................................................................................................................................................................... 309
4.19 Climate Related Matters .................................................................................................................................................................... 310
5 Segment analysis ..................................................................................................................................................................... 312
6 Net interest income ................................................................................................................................................................ 317
7 Net fee and commission income ............................................................................................................................................. 318
8 Income from non-banking activities ....................................................................................................................................... 320
9 Net gains / (losses) from financial instruments measured at FVTPL....................................................................................... 321
10 Net gains / (losses) from financial instruments measured at FVTOCI................................................................................... 321
11 Net other income / (expenses) ............................................................................................................................................. 321
12 Staff costs .............................................................................................................................................................................. 322
13 Administrative expenses ....................................................................................................................................................... 323
14 Other credit risk related expenses on loans and advances to customers at amortised cost ............................................... 323
15 Other provision (charges) / releases ..................................................................................................................................... 323
16 Income tax benefit / (expense) ............................................................................................................................................. 324
17 Earnings per share................................................................................................................................................................. 325
18 Tax effects relating to other comprehensive income / (expense) for the period ................................................................. 326
19 Cash and balances with central banks .................................................................................................................................. 326
20 Due from banks ..................................................................................................................................................................... 327
21 Derivative financial instruments ........................................................................................................................................... 327
22 Financial assets at fair value through profit or loss .............................................................................................................. 330
23 Loans and advances to customers at amortised cost ........................................................................................................... 331
24 Investment Securities ............................................................................................................................................................ 333
25 Investments in consolidated companies ............................................................................................................................... 335
26 Intangible assets ................................................................................................................................................................... 348
27 Property and equipment ....................................................................................................................................................... 349
28 Investment property ............................................................................................................................................................. 350
29 Assets held for sale ............................................................................................................................................................... 350
30 Other assets .......................................................................................................................................................................... 352
31 Due to banks ......................................................................................................................................................................... 355
32 Due to customers .................................................................................................................................................................. 356
33 Debt securities in issue ......................................................................................................................................................... 356
34 Other borrowed funds .......................................................................................................................................................... 360
35 Other liabilities ...................................................................................................................................................................... 360
36 Provisions .............................................................................................................................................................................. 361
37 Tax receivables ...................................................................................................................................................................... 362
38 Deferred Taxes ...................................................................................................................................................................... 362
39 Retirement and termination benefit obligations .................................................................................................................. 365
40 Leases .................................................................................................................................................................................... 374
41 Contingent liabilities, assets pledged, transfers of financial assets and commitments ........................................................ 376
42 Share capital and share premium ......................................................................................................................................... 383
43 Other reserves and retained earnings .................................................................................................................................. 384
44 Dividend per share ................................................................................................................................................................ 384
45 Cash and cash equivalents .................................................................................................................................................... 385
46 Related party disclosures ...................................................................................................................................................... 385
46.1 Key Management Personnel and other related parties ..................................................................................................................... 385
46.2 Subsidiaries ........................................................................................................................................................................................ 386
46.3 Associates ........................................................................................................................................................................................... 387
46.4 Joint ventures ..................................................................................................................................................................................... 388
47 Changes in the portfolio of consolidated companies ........................................................................................................... 389
48 Independent Auditors’ fees .................................................................................................................................................. 391
49 Reclassification of comparatives ........................................................................................................................................... 391
50 Disclosures of Greek Law 4261/5.5.2014 .............................................................................................................................. 394
51 Disclosures of Greek Law 4151/2013 .................................................................................................................................... 395
52 Events Subsequent to the End of the Reporting Period ....................................................................................................... 396
Statement of the Board of Directors – 31 December 2023
8
STATEMENT OF ARTICLE 4 PAR. 2 OF LAW 3556/2007
To the best of our knowledge, the full year 2023 financial statements that have been prepared in accordance with the
applicable accounting standards give a fair and true view of the assets, liabilities, equity and income statement of Piraeus
Financial Holdings S.A. and the group of companies included in the consolidated financial statements, taken as a whole. In
addition, the Board of Director’s (“BoD”) Annual Report for 2023 gives a fair and true view of the evolution, performance and
position of Piraeus Financial Holdings S.A. and the group of companies included in the consolidated financial statements, taken
as a whole, including the description of the main risks and uncertainties they have to face.
Athens, 27 February 2024
Non-Executive
Chairman of BoD
Managing Director (CEO)
Executive BoD Member
Non-Executive BoD Member
George P. Handjinicolaou
Christos I. Megalou
Solomon A. Berahas
Board of Directors' Report – 31 December 2023
9
Board of Directors’ Annual Report
BOARD OF DIRECTORS’ ANNUAL REPORT
International Environment and Economic Developments in 2023
2023 was a year of multiple major challenges and heightened uncertainty from both a geopolitical and an economic standpoint.
The ongoing war in Ukraine, China's increased geostrategic and technological competition mainly with the United States (“US”)
and secondarily with the European Union (“EU”), and the disorderly situation in the Middle East, after Hamas's strike on Isra el
last October, were the major sources of uncertainty. Additionally, during the third quarter of 2023, the US Federal Reserve
System (“the Fed”) and European Central Bank (“ECB”) cycle of rate hikes ended, and the first cuts are expected this year. On
the other hand, in 2023 economic activity was positively impacted by the lifting of the remaining restrictions related to the
coronavirus, the milder than expected winter, the de-escalation of energy prices and overall inflation and the normalisation of
international supply chains.
The global growth slowdown was moderate as some of the unfavorable headwinds did not materialize. In particular, the
International Monetary Fund (“IMF”) forecasts global growth rate of 3.1% for 2023 (2022: 3.5%), 2.9% for 2024 and 3.2% for
2025. At the same time, inflation is moderating further and is reverting towards the 2% inflation target.
The US economy grew 2.5% in 2023. For 2024, the IMF expects the US Gross Domestic Product (GDP) growth rate to be 2.1%
and 1.7% in 2025, while inflation subsided to 4.1% in 2023 and is expected to fall to 2.8% this year. The Fed increased its key
monetary policy rate four (4) times in 2023, by a total of 100 basis points (“bps”), while at the same time continued the gra dual
reduction of the size of its balance sheet.
In the Eurozone, real GDP in 2023 rose 0.5% year-on-year (”YoY”). As in 2022, financial support for the most vulnerable
households, from the majority of states and energy sufficiency, had a positive contribution. However, challenges remain a s
despite the expected reduction in interest rates, they are expected to weigh on households and businesses, while at the same
time the geopolitical situation could take a turn for the worse. Based on IMF estimates, in 2024 the Eurozone growth rate is
estimated at 0.9% and 1.7% for 2025 and inflation at 3.3% for 2024 (2023: 5.5%).
At the same time, the ECB continued the tightening of its monetary policy in 2023 by proceeding with six (6) consecutive
increases in its key interest rates, a total of 200 bps. In addition, it accelerated the rate of reduction of its balance sheet, seizing
since July 2023 the reinvestment of the principal payments from maturing securities purchased under the Asset Purchase
Program (“APP”) program and announced a lower number of investments for the securities purchased under the Pandemic
Emergency Purchase Program (“PEPP”) program for the second half of 2024, while it intends to discontinue them at the end
of 2024.
In China, 2023 was the first year that the economy operated free from the restrictions of the pandemic. As a result, growth in
2023 accelerated to 5.2% YoY, driven by strong pent-up demand. According to IMF estimates, Chinese GDP growth is estimated
at 4.6% for 2024, positively affected by the measures taken to support the economy, but the restraint of global demand and
the ongoing problems in the domestic Real Estate (“RE”) market are expected to have a negative toll. Inflation, on the other
hand, which slowed down to 0.2% in 2023 is expected to rise to 1.7% in 2024, while monetary policy is not expected to change
substantially.
Board of Directors' Report – 31 December 2023
10
Real GDP
(% year average)
Inflation
(% year average)
2022
2023
2024*
2022
2023
2024**
World
3.5
3.1
3.1
8.7
6.8
5.8
US
1.9
2.5
2.1
8.0
4.1
2.8
Eurozone
3.4
0.5
0.9
8.4
5.5
3.3
China
3.0
5.2
4.6
1.9
0.2
1.7
Sources: Piraeus Bank Research, *Estimate: IMF (2024): “World Economic Outlook Update”, January, p. 6, **Estimate: IMF (2023): “World Economic
Outlook”, October, p.12, 40-2.
Developments in the Greek Economy in 2023
In 2023, the Greek economy remained on a growth trajectory despite the uncertainty that prevailed in the international
environment and the macroeconomic impact of monetary policy in the Eurozone. In the first nine months of 2023, real GDP
increased by 2.2%, on an annual seasonally adjusted basis, a rate that, although slower than the corresponding 2022 level,
remains higher than the Eurozone average (0.6%). Domestic demand and exports positively contributed to GDP growth. In
nominal terms, GDP increased by 7.5% YoY in the first nine months of 2023, following a 13.8% annual increase in 2022. In the
labor market, based on seasonally adjusted data, employment increased by 1.5% in 2023 on an annual basis and the
unemployment rate decreased to 10.6%, compared to 12.4% in 2022. The inflationary pressures, which were a key feature of
2022 at international and domestic levels, showed a clear trend of de-escalation. In 2023 national inflation was limited to 3.5%
YoY, from 9.6% in 2022, mainly due to the lower energy prices. Average Harmonized Index of Consumer Prices (“HICP”) for
2023 increased by 4.2% on an annual basis, from 9.3% in 2022.
With regard to the country's credit rating, its gradual upgrade resulted in the recovery of the investment grade for the firs t
time since 2010. More specifically, on 1 December 2023, the rating agency Fitch Ratings upgraded Greece's credit rating to
investment grade “BBB-“ from “BB+” with a stable outlook. On 20 October 2023, the rating agency S&P Global upgraded
Greece's credit rating to investment grade “BBB-“ from “BB+” with a stable outlook. Earlier, on 8 September 2023, the rating
agency DBRS Morningstar upgraded Greece to investment grade “BBB (low)” from “BB” with a stable outlook and on 4 August
2023 the rating agency Scope Ratings upgraded Greece's long-term credit ratings to investment grade “B BB-“ with a stable
outlook. Moody's upgraded Greece's credit rating by two (2) notches to “Ba1” from “Ba3” with a stable outlook on 15
September 2023, one notch below investment grade. According to the latest evaluations, Greece has secured the investment
grade from four (4) rating agencies out of five (5), recognized by the ECB (Moody's, S&P, Fitch Ratings, DBRS Morningstar and
Scope Ratings).
Board of Directors' Report – 31 December 2023
11
Date
Rating Agency
Rating Action
Outlook
1 December 2023
Fitch Ratings
BBB- from BB+
Stable
20 October 2023
S&P Global
BBB- from BB+
Stable
15 September 2023
Moody's
Ba1 from Ba3
Stable
8 September 2023
DBRS Morningstar
BBB (low) from BB
Stable
4 August 2023 Scope Ratings BBB- from BB+ Stable
According to European Commission’s (“EC”) forecasts, economic activity in Greece is expected to grow by 2.4% in 2023, and
2.3% in 2024, before gradually moderating to 2.2% in 2025. The expansion of the Greek economy will continue to be supported
by the execution of the Greece 2.0 National Recovery and Resilience Plan (“RRP”) and a resilient labor market. The
unemployment rate is anticipated to gradually decline, and inflationary pressures to be limited. Employment growth is set to
continue, albeit at a slower pace. The unemployment rate is forecasted to fall to 9.9% by 2025, its lowest level in over a decade.
Consumer prices based on HICP are expected to increase by 2.8% and 2.1% in 2024 and 2025, respectively. The general
government deficit is set to decrease further on the back of muted expenditure growth and higher revenues. The primary
balance is expected to record a surplus of 1.1% of GDP in 2023, up from 0.1% in 2022, reaching 2.5% of GDP in 2024. Along
with solid nominal GDP growth, this is set to support the decline of the high public debt-to-GDP ratio.
European Commission
2022
2023*
2024*
2025*
Real GDP growth rate (%)
5.6
2.4
2.3
2.2
Inflation (HICP %)
9.3
4.3
2.8
2.1
Unemployment rate (% of labor force)
12.5
11.4
10.7
9.9
General Government Balance (% of GDP)
-2.4
-2.3
-0.9
-0.8
General Government Primary Balance (% of GDP)
0.1
1.1
2.5
2.6
General Government Gross Debt (% of GDP)
173
161
152
148
*Estimate
Source: European Commission: European Economic Forecast, Autumn 2023
The development prospects of the Greek economy depend on the utilization of European funds for the implementation of
investment plans and the stimulation of entrepreneurship. The Recovery and Re silience Fund (“RRF”), both in terms of grants
and private sector investments through the loan facility, is a key factor from a sustainable development perspective. On 8
December 2023, the Economic and Financial Affairs Council (“ECOFIN”) approved the amen ded RRP of Greece, which includes
capital for REPowerEU amounting to € 795 million, as well as an additional € 5 billion that will be added to the existing loa n
program. The revised plan amounts to € 36 billion (from € 30.5 billion of European funding in the original plan), with € 18 billion
RRF grants and € 18 billion RRF loans. The EC, under RRF has already disbursed to Greece € 17.4 billion until January 2024.
Board of Directors' Report – 31 December 2023
12
Overall, it is estimated that by 2027 the country's funding from EU programs (RRF, NSRF, CAP
1
) will exceed € 76 billion. In the
medium term, the Greek economy is expected to enhance its resilience, despite the challenging and unstable global
environment, building on credible fiscal policy, reform orientation, productive investments and extroversion. Increasing
investments, implementing the RRP, and maintaining the momentum of reforms can ensure continued sustainable growth in
the long term.
However, there are risk factors that could negatively affect developments in the Greek economy and its prospects. Any
worsening of the geopolitical crisis in Ukraine and the Middle East increases the risk of disruptions in energy supply with a
possible impact on energy prices, and the overall price level. Slow growth in Europe also poses risks to the country's export
performance and the continued recovery of tourism services. Additional risks for the prospects of the Greek economy are the
maintenance of the tighter monetary policy, that can burden economic activity and weaken the stimulation of investments, as
well as delays in the implementation of public and private projects and in meeting the RRF schedule. Finally, environmental
challenges and extreme weather events are a growing risk to the economy. These risks could affect the Greek banking system
and Piraeus Bank (the “Bank”) in particular. Higher energy prices may cause inflation, which reduces consumer spending and
corporate earnings, making it harder for some people and businesses to repay their loans, resulting in lower asset quality an d
more Non-Performing Exposure (“NPE”) inflows. Weaker economic activity and possible hold-ups in the RRF funds distribution,
could affect credit growth and Piraeus Group's
2
revenue sources, reducing profitability and capital creation. Lastly, extreme
weather events such as the fires and floods that occurred in 2023 in Greece, could damage the repayment capacity of the
affected borrowers and the value of collaterals in those areas.
Developments in the Greek Banking System in 2023
The Greek banking system, in 2023, continued to recover, supported by the favorable interest rate environment, due to the
ECB Governing Council’s decisions since July’s 2022 meeting to raise interest rates cumulatively by 450 bps in total.
Deposit growth decelerated in 2023 compared to 2022 but remained in positive territory YoY. In December 2023, private sector
deposits reached € 194.8 billion, up by 3.1% YoY.
Following the ECB’s decision at its 27 October 2022 meeting, to recalibrate the Targeted Longer Term Refinancing Operations
(“TLTRO”) III terms with effect from 23 November 2022 and until the maturity date or early repayment date of each respective
outstanding TLTRO III operation, Greek banks repaid a significant part of the TLTRO III funding, and as at 30 November 2023,
total ECB fund ing to the Greek banking system had been reduced to € 16.3 billion compared to € 35.4 billion at the end of
December 2022
3
.
Although loans to the domestic private sector were affected by seasonality and high prepayments in the first half of 2023, th e
deployment of RRF programs supported the last quarter of the year. In December 2023, loans to the domestic private sector
grew by 3.6% YoY to € 118.4 billion.
Going forward, credit expansion is expected to be positively affected by solid and stable economic growth, which is expected
to continue exceeding the EU average, a healthy Loan to Deposit (“LDR”) ratio of the Greek banking sy stem at below 70% in
November 2023, while further support will come from the funds of the Next Generation EU, the 2021-2026 EU sponsored
funding package which targets to alleviate the impact of the Covid-19 pandemic. The Greek banking system is expected to
1
NSRF: National Strategic Reference Framework (“NSRF”)
CAP: Common Agricultural Policy (“CAP”)
2
Piraeus Bank and Bank subsidiaries
3
Browse publications (bankofgreece.gr)
Board of Directors' Report – 31 December 2023
13
leverage the EU funds in order to support the Greek economy and lay the ground for sustainable growth rates in the next years.
Six (6) domestic banking institutions have signed agreements with the Ministry of Finance for the utilization of loans from the
RRF. Until late November 2023, more than 240 projects have been contracted, amounting to a total capital expenditure
(“CapEx”) of more than € 8.0 billion, of which approximately 120 projects related to small and medium enterprises (“SMEs”).
During 2023, the Bank and two (2) other systemic Greek banks proceeded with the issuance of Senior Preferred Bonds of a
total amount of € 2.5 billion, as part of their strategy to further increase their Minimum Requirements for own funds and
Eligible Liabilities (“MREL”).
As at 30 September 2023, the NPE balance of the Greek banking system stood at € 12 billion
4
with the NPE ratio standing at
7.9%, compared to 9.7% a year ago. The main driver of NPE ratio decline has been the Hellenic Asset Protection Scheme
(“HAPS”), also called “Hercules” plan, which has been instrumental in assisting banks to reduce their NPEs, through
securitizations, of which the senior tranches bear Government’s guarantee.
Significant developments that are expected to play key role in the Greek banks’ priorities during 2024 are:
• The deployment of the RRF funds for the financing of Greek businesses that is expected to mobilize a total of € 60 billion of
investments in the country over the next three (3) years;
• The potential ECB rates’ cut that is expected to start taking place within this year. At its two (2) last meetings, the ECB’s
Governing Council left interest rates unchanged, following several consecutive raises since July 2022. Consensus expects
the ECB to gradually start cutting rates from mid-2024 onwards and accelerate the pace of cuts in 2025;
• The TLTRO III funding expiration, as the outstanding amounts are maturing in 2024. Currently, Greek banks have sufficient
excess liquidity to repay TLTRO III balances, thus reducing total ECB funding significantly;
•
The establishment of the intermediate MREL targets by the Single Resolution Board (“SRB”), which came into force on 1
January 2022 and aim to ensure that banks are provided with sufficient own funds and eligible liabilities to guarantee their
capacity to absorb losses in adverse scenarios, thus ensuring the continuity of their activity. For Greek banks, MREL targets
have been set according to a transition period, i.e., setting the final binding target by 31 December 2025.
Piraeus Financial Holdings Group Developments
The most important corporate events for Piraeus Financial Holdings Group (hereinafter the “Group”) during 2023 and up to
the authorization date for issuance of the annual financial statements by the BoD, were the following:
Completion of Mandatory Tender Offer (“MTO”) addressed to MIG Holdings S.A. (“MIG”) Shareholders
In accordance with the provisions of article 24 paragraph 2(a) of the Law 3461/2006, Piraeus Financial Holdings S.A. (hereinafter
the “Company”) announced on 21 April 2023, that the Bank acquired, on the same date, through the Athens Stock Exchange,
5,646,780 shares of MIG, at the price of € 0.2170 per share. The said price equals to the MTO price, following the publication
of the MTO of the Bank to MIG shareholders, on 9 February 2023, for the acquisition of the total number of common registered
voting shares. The period of acceptance took place from 24 February 2023 to 21 April 2023. The Hellenic Competition
Commission (“HCC”) granted approval with regard to the acquisition of the additional shareholding in MIG in the context of
the MTO on 13 April 2023.
Effective from 13 April 2023 (Hellenic Competition Committee approval date), MIG (excluding Attica Holdings S.A.) is fully
4
https://www.bankofgreece.gr/en/statistics/evolution-of-loans-and-non-performing-loans
Board of Directors' Report – 31 December 2023
14
consolidated as a subsidiary of Piraeus Group. Following the completion of the MTO, the Bank holds an 87.8% shareholding in
MIG.
Rating Upgrades
On 14 December 2023, S&P Global Ratings raised the Bank’s long-term issuer credit rating to “BB-” from “B+” with a positive
outlook. As regards the Company, its long-term issuer credit rating was upgraded to “B“, with a positive outlook.
On 14 December 2023, Fitch Ratings upgraded the Bank’s long-term issuer credit rating to “BB-” from “B” with a positive
outlook. On 8 January 2024, Fitch Ratings rated the Company’s long-term issuer rating to “BB-“ with a positive outlook.
On 19 September 2023, Moody’s upgraded the Bank’s long-term issuer credit rating to “Ba1” from “Ba3” and Senior Preferred
debt rating to “Ba2” from “B1”, both with a positive outlook. As at the same date, Moody’s rated the Company “Ba3” with a
positive outlook.
On 6 December 2023, DBRS Morningstar upgraded the Bank’s long-term issuer rating to “BB” from “B”. Concurrently, DBRS
Morningstar upgraded the Bank’s Long-Term Deposit Rating to “BB” from “B”. The trend on all ratings is stable.
Constitution of the new BoD into Body
On 28 June 2023, the new BoD, which was elected at the annual General Meeting (”GM”) of shareholders held on 27 June
2023, was constituted as a Body and designated its Executive and non – Executive Members, in accordance with Law 4706/2020
as in force. Following the Company’s announcement on 1 December 2023 as regards the resignation of Ms. Fransesca Tondi
from the position of the Independent Non-Executive Member of the BoD, the Audit Committee, and the Committees of the
BoD, as well as the subsequent announcement on 23 February 2024 regarding the replacement of the resigned member, by
Ms. Maria Semedalas, the composition of the Company’s BoD is as follows:
1. Handjinicolaou George son of Petros Handjinicolaou, Chairman of the BoD, Non-Executive Member
2. De Boeck Karel, son of Gerard De Boeck, Vice-Chairman of the BoD, Independent Non-Executive Member, Senior
Independent Director
Executive Board Members:
3. Megalou Christos, son of Ioannis Megalou, Managing Director (Chief Executive Offic er, “CEO”)
4. Koutentakis Vasileios, son of Dimitrios Koutentakis
Independent Non-Executive Board Members:
5. Kontogouris Venetia, daughter of Gerasimos Kontogouris
6. Cucchiani Enrico, son of Clemente Cucchiani
7. Hexter David, son of Richard Hexter
8. Berahas Solomon, son of Alvertos Berahas
9. Panzures Andrew, son of Deones Panzures
10. Weatherston Anne, daughter of John Weatherstone
11. Semedalas Maria, daughter of Ilias Semedalas
Board of Directors' Report – 31 December 2023
15
Non-Executive Board Members:
12. Blades Alexander, son of Zisis Blades
13. Dontas Periklis, son of Nikolaos Dontas, Hellenic Financial Stability Fund (“HFSF”) Representative under Law
3864/2010
The new BoD has a term of three (3) years, namely until 27 June 2026, which may be extended until the annual GM convened
after such term has lapsed.
Sunrise III – HAPS NPE Securitization
After obtaining the HAPS guarantee, the Bank completed the transfer of, in aggregate, 95% of the mezzanine and junior notes
of the Sunrise III securitization to the nominees of Intrum AB (publ) and Waterwheel Capital Management LP. The Bank retained
5% of the mezzanine and junior notes of the Sunrise III securitization, as per the relevant securitization regulatory
requirements, as well as the Sunrise III senior notes in their entirety. The Bank has been granted with significant risk transfer
(“SRT”) approval and derecognized the portfolio.
Solar – HAPS NPE Securitization
In November 2023, the Bank together with the other three systemic banks (together “the Banks”) announced the execution of
a binding agreement between the four systemic banks and Waterwheel Capital Management L.P., acting as investment
manager on behalf of an affiliated entity managed by it (“Waterwheel Capital”) with respect to the sale to Waterwheel Capital
of 95% of the mezzanine notes and of 95% of the junior notes to be issued in the context of the concurrent securitization by
the Banks of Solar portfolio, with a total gross book value of approximately € 1.2 billion as of 30 September 2021, of which €
0.4 billion relates to Piraeus. The Solar Transaction is expected to be completed within the first half of 2024 and is subject to
customary conditions for such transactions.
Senna – NPE Portfolio sale
On 29 June 2023, the Bank completed the sale of an NPE portfolio, amounting to € 0.3 billion gross book value, to Intrum
Holding AB. The agreed total consideration reached approximately 21% of the gross book value. The NPE portfolio comprised
mainly of small sized mortgage, as well as consumer and small business loans.
Monza – NPE Portfolio sale
In December 2023, the Bank classified as Held-for-Sale (“HFS”) an NPE portfolio consisting of retail and business NPEs, namely
portfolio Monza with a total gross book value of € 0.3 billion. The transaction is expected to be concluded within 2024.
Other NPE Portfolios
In June 2023, the Bank classified as HFS two (2) NPE portfolios, namely portfolio Delta (Romanian NPEs) and Wheel II, with a
total gross book value of € 0.2 billion. The first transaction is expected to be concluded within 2024 and the second
transaction was concluded in July 2023.
Board of Directors' Report – 31 December 2023
16
The Bank successfully priced Senior Preferred Bonds amounting to an aggregate € 1.0 billion
On 7 July 2023, the Bank successfully completed the issuance of a new € 500 million Senior Preferred Bond with a coupon of
7.25%, attracting the interest of a large number of institutional investors. The bond has a maturity of five (5) years, an
embedded issuer call option after four (4) years and is listed on the Luxembourg Stock Exchange’s Euro MTF market.
On 29 November 2023, the Bank successfully completed the pricing of a new € 500 million Senior Preferred Bond with a
coupon of 6.75%, attracting the interest of a large number of institutional investors. The bond has a maturity of six (6) years
and an embedded issuer call option after five (5) years. Settlement took place on 5 December 2023 and the notes have been
listed on the Luxembourg Stock Exchange’s Euro MTF market.
The issuances are part of the Bank’s strategy to increase its MREL, which is a requirement for all banks that are di rectly
supervised by the ECB.
2023 EBA Stress Test Results
On 28 July 2023, the results of the 2023 European Banking Authority (“EBA”) Stress Test were announced. The 2023 EU-wide
stress test was conducted by the EBA, on a much larger sample compared to previous years, covering 70 EU banks and 75% of
total banking assets in the EU. The exercise assessed the performance of banks under a baseline and adverse scenario during
the period 2023-2025. In terms of scenario severity, the 2023 EU-wide stress test, featured the most severe GDP decline
assumed, with the 3-year cumulative reduction in Greek GDP growth at -5.5%, compared to the previous 3 EU-wide stress test
exercises.
For Piraeus Group, the fully loaded Common Equity Tier 1 ratio (“CET1 ratio”) resulting from the stress test for 2025, the final
year considered in the exercise, is illustrated below:
CET-1 Ratio
2022
2025
Delta
(a) Stress test “baseline” scenario
11.5%
14.3%
+2.7%
(b) Stress test “adverse” scenario
11.5%
9.1%
-2.4%
The adverse scenario results led to a depletion of circa 241 bps for the 3-year period. The respective depletion in the 2021
Stress Test Exercise was circa 480 bps.
The adverse scenario results to circa 318 bps depletion at the year with the highest impact (2023). The Piraeus’ Group results
of the 2023 stress test exercise imply a material improvement compared to the 2021 and 2018 stress test exercises, as
displayed below:
Board of Directors' Report – 31 December 2023
17
Maximum Depletion
CET1 Ratio end-period (“adverse”)
Stress test 2018
-8.9%
5.9%
Stress test 2021
-6.1%
8.6%
Stress test 2023
-3.2%
9.1%
Conclusion of the Sale of a Leasing Subsidiary, including an NPE portfolio amounting to € 0.5 billion gross book value
On 5 September 2023, the Company announced that the Bank had concluded the sale of 100% of the Group’s leasing subsidiary
Sunshine Leases Single Member S.A., including a portfolio of leasing NPEs (“Sunshine Portfolio”), (the “Sunshine Transaction”),
to Hellas Capital Leasing Single Member S.A., a Greek leasing company wholly owned by funds managed or advised by Bain
Capital. The Sunshine Portfolio, already classified as HFS, amounted to € 0.5 billion gross book value as at 30 June 2023. Th e
transaction has been part of Piraeus Group’s focused and systematic actions, targeted to fulfil its NPE de-risking plan. The
financial impact of the Sunshine Transaction has been reflected in the 30 June 2023 Group’s financial position.
Acquisition of Own Shares and conclusion of Piraeus Financial Holdings Share Buyback program
On 29 September 2023, the Company announced, in accordance with the Regulation (EU) No. 596/2014, Commission
Delegated Regulation (EU) 2016/1052 and the Athens Exchange Regulation that, following the corporate announcement for
the commencement of the Share Buyback Program (the “Program”) dated 22 September 2023, the Program had been
concluded.
5,283,004 common shares of the Company traded on the Athens Stock Exchange were acquired in the period from 22
September 2023 up to and including 29 September 2023 at an average price of € 2.8393 per share and a total cost of €
14,999,974.
Free Distribution of Shares Plan of Piraeus Financial Holdings
On 1 December 2023, the Company announced the implementation of the decision of the annual GM of the shareholders of
the Company dated 27 June 2023 and of the respective delegated resolution of the BoD dated 16 June 2023 for the approval
of the Terms of a Free Distribution of Company’s Shares Plan to executives and employees of the Company and its affiliated
companies (the “Beneficiaries”). A total of 1,307,585 own, common registered voting shares of the Company were distributed
free of charge to 137 Beneficiaries, under the applicable variable remuneration schemes (“Top Management Retention
Scheme” and “Performance Incentive Scheme” for 2022), through over-the-counter transactions. The total value of the above
shares amounted to € 4,218,269 based on the closing price of € 3.2 26 of the Company’s share on 1 December2023 (distribution
date).
The above shares were acquired in the context of the Company's own share buyback program. Beneficiaries who fall under the
category of Material Risk Takers (“MRTs”) are subject to a retention obligation of such shares for a period of one year from the
date of their acquisition. After the aforementioned distribution, the Company owns a total of 3,975,419 own shares, which
correspond to a percentage of 0.32% of its total shares.
Board of Directors' Report – 31 December 2023
18
Sale of Piraeus Direct Solutions S.M.S.A. (“PDS”)
On 25 October 2023, the Company announced that the Bank had completed the sale of 100% of PDS to Mellon Technologies
S.A. (“Mellon”), part of a multinational group providing technology solutions, contact center and outsourcing services. The
transaction consideration amounted to circa € 3 million, primarily based on the PDS’s net assets, and is subject to adjustment
for any subsequent movements that took place up to the transaction completion date. The transaction also includes renewal
of the servicing agreement relating to provision by PDS of call center activities to Piraeus Group.
Voluntary Exit Scheme
In accordance with its strategic objectives and transformation priorities, the Group initiated in 2023 a new Voluntary Exit
Scheme (“VES”) for certain group of employees. As a result, voluntary redundancy costs of € 62 million increased the staff
costs of the Group. The number of full-time equivalents (“FTE”) who exited voluntarily in 2023, making use of the 2023 and
2022 VES stood at 538.
The Company successfully priced a Subordinated Ti er 2 Bond amounting to € 500 million
On 10 January 2024, the Company announced that it successfully completed the pricing of a new € 500 million Subordinated
Tier 2 Bond with a coupon of 7.250%, attracting the interest of a large number of institutional investors. The bond has a
maturity of 10.25 years and an embedded issuer call option between year 5 and 5.25, with settlement taking place on 17
January 2024. The bond was listed on the Luxembourg Stock Exchange’s Euro MTF market and was rated “B1” and “B” by
Moody’s and Fitch respectively. In conjunction with the new issuance, the Bank announced a cash tender offer on its 9.750%
Non-Call June 2024 Subordinated Tier 2 notes. In aggregate, the principal amount of the notes that were validly tendered
pursuant to the offer stood at € 294 million. The funds raised through the new issue have been used by the Bank for financing
the tender offer and for solidifying its capital position.
Organizational Structure of the Group
The CEO, supported by the members of the Group Executive Committee, is considered the Chief Operating Decision Maker for
the purposes of identifying the Group’s reportable segm ents. The Group manages its business through the following reportable
segments:
Retail Banking – includes Mass, Affluent, Small Businesses, International Business Unit (“IBU”) and Public core customer
segments as well as channels of banking activity (i.e. branches, e-branches, ATMs etc).
Corporate Banking – includes Large Corporates, Shipping, SMEs and Agricultural core customer segments.
Piraeus Financial Markets (“PFM”) – includes the Fixed Income, Foreign Exchange, Treasury activities (including the interest
rate gap management arising from all banking activities) and Institutional clients.
Other – includes all management related activities not allocated to specific customer segments, the management of Real
Estate Owned (“REO”) assets, Wealth and Asset Management (“WAM”) activities, certain equity participations of the Group,
funding transactions approved by the Asset and Liability Management Committee (“ALCO”) and intersegmental eliminations.
NPE Management Unit (“NPE MU”) – includes the management of any NPE assessed as non-core business, irrespectively
of whether the said exposures are serviced by the Group or third parties. In addition, following the derecognition of Phoenix,
Vega I, II, III, Sunrise I, II and III securitized portfolios, this reportable segment includes also the senior and subordinated notes
Board of Directors' Report – 31 December 2023
19
issued by the securitization special purpose vehicles (“SPVs”) and retained by the Group. The fees payable for servicing the
Group’s NPE portfolio are recognized within this segment. Furthermore, the respective segment includes certain equity
participations classified in either Fair Valu e through Other Comprehensive Income (“FVTOCI”) or Fair Value through Profit or
Loss (“FVTPL”), and certain associates (i.e., Strix Asset Management Ltd, Strix Holdings LP and Strix Holdings II LP).
Business segments include internal allocations of income and expense based on an internally approved methodology. These
allocations include, among other, the costs of certain support services and functions to the extent that they can be meaningfully
attributed to the reportable business segments. Such allocations are made on a systematic and consistent basis and involve a
degree of subjectivity. Costs that are not allocated to business segments are included in Corporate Centre (reported under
business segment “other”).
Where relevant, income and expense amounts presented, include the results of inter-segment funding along with inter-
company and inter-business line transactions. All inter-company transactions between business segments are undertaken on
arm’s length terms and inter-segment transactions and balances are eliminated within each relevant segment.
Evolution of Volumes and Results of the Group during 2023
The Group has a systemic position in the Greek banking market in terms of total assets, which amount to € 76.5 billion as at 31
December 2023. The Group holds the most extensive footprint in Greece with 378 branches (plus another 16 branches in 2
countries abroad) and a wide customer base of 6 million active customers. The branch network in Greece was reduced by 11
units during 2023. As at 31 December 2023, the Group’s headcount totalled 8,053 employees in the continuing operations, of
which 7,672 were employed in Greece (reduced by 599 compared to a year ago, mainly due to the implementation of VES).
Financial Position
Regarding the financial position of the Group as at 31 December 2023, total assets amounted to € 76.5 billion compared to €
74.6 billion as at 31 December 2022, with the difference attributed to the increased liquidity position and the solid profitability
achieved during 2023.
Customer deposits of the Group continued to increase, reaching € 59.6 billion as at 31 December 2023, corresponding to a rise
of 2.0% compared to 31 December 2022, in line with market dynamics. The Group holds 28% domestic market share in deposits
as at 31 December 2023. Savings deposits constitute 41% of the total deposits of the Group, with time deposits at 23% and
current, sight and other deposits at 37%. Corporate deposits correspond to 29% of the total deposit base with retail deposits
at 70%. Average time deposits’ cost picked up at 1.62% in 2023 versus 0.29% in 2022.
Board of Directors' Report – 31 December 2023
20
Selected Balance Sheet Figures
31/12/2023
31/12/2022
As reclassified
1
YoY
Gross Loans and advances to customers at amortised cost before ECL allowance (grossed up with
PPA adjustments)
38,346
38,787
-1.1%
Less: Expected Credit Losses (“ECL”) allowance (grossed up with PPA adjustment)
(819)
(1,421)
-42.4%
Loans and advances to customers at amortised cost
37,527
37,367
0.4%
Financial Assets
13,938
12,523
11.3%
Other Assets
24,985
24,756
0.9%
Total Assets
76,450
74,645
2.4%
Due to Banks
4,618
6,185
-25.3%
Due to Customers
59,567
58,372
2.0%
Other Liabilities
4,912
3,507
40.1%
Total Liabilities
69,097
68,064
1.5%
Total Equity
7,353
6,581
11.7%
1
Comparative figures have been reclassified, due to the amendment in the current period of the presentation of derivative financial instruments in the statement of the financial
position, by: a) offsetting derivative assets and liabilities entered into with a central counterparty clearing member against the margin collateral posted or received and b)
presenting the carrying amount of derivatives on a gross basis, with accrued interest receivable and payable netted off at deal level. Refer to notes [4.8] and [49] for further
information.
Gross loans and advances to customers at amortised cost before ECL allowance as at 31 December 2023 amounted to € 38.3
billion compared to € 38.8 billion as at 31 December 2022, while loans and advances to customers at amortised cost stood at
€ 37.5 billion as at 31 December 2023, compared to € 37.4 billion as at 31 December 2022, with the Group’s seasonally adjusted
net loans to deposits ratio at 61.5%, stable compared to 31 December 2022, on the back of balanced increase of deposits and
adjusted net loans. The Group’s loan book in terms of gross balance (grossed up with Purchased Price Allocation adjustment,
“PPA adjustment”) consists of corporate and public sector by 79%, mortgage by 17% and consumer, personal, credit cards and
other loans by 4%.
The Group’s financial assets portfolio has increased to € 13.9 billion as at 31 December 2023, compared to € 12.5 billion as at
31 December 2022, mainly the result of higher balances in the Group’s portfolio of securities at amorti sed cost.
Utilisation of the Eurosystem funding stood at € 3.5 billion as at 31 December 2023, following the repayment of € 2.0 billion of
the TLTRO III facility, while interbank repo funding increased to € 435 million from € 298 million a year ago.
Group NPEs reduced further to € 1.3 billion as at 31 December 2023, compared to € 2.6 billion as at 31 December 2022. The
NPEs over total gross loans ratio for the Group stood at 3.5% as at 31 December 2023 from 6.8% as at 31 December 2022, due
to the continuous efforts of the Group to improve its asset quality, through the organic management of the remaining NPE
portfolio and selected NPE portfolio sales. As at 31 December 2023, the Group NPE (cash) coverage ratio increased to 61.6%
from 54.5% as at 31 December 2022.
Income Statement
The Group’s net interest income amounted to € 2,003 million in 2023, presenting an increase of 48% compared to 2022,
attributed to the favorable interest rate environment. Net interest margin (“NIM”) reached 2.7% in 2023, compared to 1.8% in
2022. Net fee and commission income and income from non-banking activities amounted to € 547 million (income from non-
banking activities amount to € 79 million), in 2023, 12.8 % higher compared to 2022, driven by strong performance of rental
income, loan origination, funds transfers, and asset management. Net fee income over assets reached 0.7% in 2023, from 0.6%
Board of Directors' Report – 31 December 2023
21
in 2022. Other income fell to € 57million in 2023 compared to € 744 million in 2022. The latter was mainly affected by enhanc ed
trading gains in the fixed income portfolio and the carve-out and sale of the Bank’s merchant acquiring business unit, that took
place in 2022.
Total net income in 2023 amounted to € 2.6 billion presenting an increase of 0.9% compared to 2022. The Group’s total
operating expenses stood at € 863 million in 2023, compared to € 889 million in 2022. Excluding the extraordinary cost related
to VES and other extraordinary depreciation costs amounting in total to € 61 million for 2022 and € 71 million related to VES
and other extraordinary expenses, total operating expenses amounted to € 793 million in 2023, a reduction of 4.2% versus the
comparative period. As a result, cost-to-core income ratio, excluding the extraordinary costs mentioned above, stood at 31.1%
in 2023 from 45.2% in 2022.
Selected Profit & Loss Figures
31/12/2023
31/12/2022
YoY
Net Interest Income
2,003
1,353
48.0%
Net Fee & Commission Income
1
547
485
12.8%
Other Income
58
744
-92.2%
Total Net Income
2,607
2,582
1.0%
Staff Costs
(442)
(446)
-0.9%
-excl. VES costs
(387)
(389)
-0.5%
Administrative expenses
(315)
(338)
-6.8%
Depreciation and amortization
(106)
(106)
0.0%
Total Operating Expenses
(863)
(889)
-2.9%
-excl. VES and other non-recurring costs
(793)
(828)
-4.2%
Profit Before Provisions, Impairment and other credit risk related expenses
1,743
1,693
3.0%
ECL impairment losses and other credit risk related expenses on loans and advances tο customers
at amortised cost
(559)
(615)
-9.1%
Other impairment and provisions
(92)
(70)
31.4%
Share of profit/ (loss) of associates and joint ventures
(15)
29
-
Profit / (Loss) Before Income Tax
1,078
1,037
4.0%
Income tax benefit / (expense)
(292)
(140)
108.6%
Profit/ (Loss) for the Period
786
948
-17.1%
Profit/ (Loss) attributable to the equity holders of the parent (from Continu
ing Operations)
788
899
-12.3%
Profit / (Loss) attributable to the equity holders of the parent (from Discontinued Operations)
-
51
-
Earnings / (losses) per share attributable to the equity holders of the parent (from Continuing
Operations)
0.63
0.72
-12.5%
1
Net Fee and Commission Income also includes income from non-banking activities
As a result of the above, Group’s profit before provisions, impairments and other credit risk related expenses in 2023 amount ed
to € 1.7 billion, increased by 3.0%. The results of the year ended 31 December 2023 were burdened by ECL impairment charges
on loans plus other credit risk related expenses amounting to € 559 million (31 December 2022: € 615 million). Excluding
impairments related to NPE sales, impairments on loans stood at € 306 million, compared to € 294 million in 2022, with organic
cost of risk on net loans reaching 0.8%, in the same level with 2022.
The Group’s profit before income tax in 2023 reached € 1.1 billion compared to € 1.0 billion in 2022, an increase of 4%. Profit
from continuing operations attributable to equity holders of the parent amounted to € 78 8 million compared to € 899 million
in 2022, due to higher tax expenses that reached € 292 million compared to € 140 million in 2022. Overall, the return on
Board of Directors' Report – 31 December 2023
22
average tangible book value (“RoaTBV”) normalized, adjusted for Additional Tier 1 (“AT1”) coupon, rose to 16.6% in 2023, from
9.1% in 2022.
Capital
As at 31 December 2023, the Group’s total equity amounted to € 7.4 billion, compared to € 6.6 billion as at 31 December 2022,
as a result of the recovered profitability of the Group. Hence, the Group’s Basel III Common Equity Tier 1 (CET1) as at 31
December 2023 stood at 13.2% (31 December 2022: 13.04%) and the total capital ratio (“TCR”) stood at 17.7% (31 December
2022: 17.8%). Proforma for the Risk Weighted Assets (“RWAs”) relief underpinned from Monza, Delta and Solar loans
portfolios’ derecognition, as well as the capital accretion from the new issuance of Tier 2 in January 2024, the TCR stood at
18.2% as at 31 December 2023, whilst the CET1 ratio stood at 13.3% for the Risk Weighted Assets (“RWAs”) rel ief underpinned
from Monza, Delta and Solar loans portfolios’ derecognition.
The amount of deferred tax assets included in the Group’s regulatory capital in accordance with the provisions of Greek Laws
4172/2013, 4302/2014, 4340/2015, stood at € 3.3 billion as at 31 December 2023, compared to € 3.5 billion as of 31 December
2022.
The ECB, through the Supervisory Review and Evaluation Process (“SREP”) decision on 30 November 2023, informed the
Management on the revised Overall Capital Requirements (“OCR”) le vels, effective since 1 January 2024. The Group has to
maintain, on a consolidated basis, a Total SREP Capital Requirement (“TSCR”) of 11% and an OCR of 14.5 7% (OCR plus Pillar 2
guidance (“P2G”) at 16.32%), which includes: (a) the minimum Pillar I total capital requirements of 8.00% as per article 92(1)
of Regulation 575/2013/EU; (b) the additional Pillar II capital requirement of 3.00% as per article 16(2) of Regulation
1024/2013/EU; (c) the fully loaded capital conservation buffer of 2.50% under Greek Law 4261/2014,(d) the transitional Other
Systemically Important Institutions (“O-SII”) capital buffer of 1.00% under Greek Law 4261/2014 and (e) the institution-specific
Countercyclical Capital Buffer (“CCyB”) under Greek Law 4261/2014 (as amended by Greek Law 4799/2021) of 0.07% for the
year ended 31 December 2023.
Share Capital
On 31 December 2023, the share capital of the Group amounted to € 1,163 million divided into 1,250,367,223 common
registered voting shares with a nominal value of € 0.93 each. Common shares of the Company are intangible, registered and
listed on Athens Stock Exchange.
The number of the outstanding shares of the Company is the following:
Number of outstanding common shares owned by the HFSF / Percentage of total
share capital
337,599,150
27.00%
Number of outstanding common shares owned by private investors / Percentage of
total share capital
912,768,073
73.00%
Total number of outstanding common shares / Percentage of total share capital
1,250,367,223
100.00%
Pursuant to par. 1, art. 16C of Greek Law 3864/2010 the acquisition of treasury shares is not permitted, without the approval
of HFSF, for as long as the HFSF is a shareholder of the Company. However and as already mentioned above, on 1 December
2023, the Company announced the implementation of the decision of the annual GM of the shareholders of the Company for
the approval of the Terms of a Free Distribution of Company’s Shares Plan to the Beneficiaries. A total of 1,307,585 own,
Board of Directors' Report – 31 December 2023
23
common registered voting shares of the Company were distributed free of charge to 137 Beneficiaries, under the applicable
variable remuneration schemes, through OTC transactions. Prior to this and within September 2023, the Company executed
the share buy-back program by acquiring 5,283,004 treasury shares at an average cost of € 2.84 per share.
After the aforementioned transactions, the Company owned a total of 3,975,419 own shares, which correspond to a
percentage of 0.32% of its total shares.
Apart from the above, the remaining purchases and sales of treasury shares that occurred during the current year, relate to
transactions executed by the Group’s subsidiary Piraeus Securities S.A. in the context of its market making operations. As at 31
December 2023, Piraeus Securities S.A. held 1,269,606 of the Group’s common shares, of total nominal value € 1,180,733. The
total value of treasury shares held by the Group amounted to € 15.2 million as of 31 December 2023.
The Company’s shareholder structure presents great diversity. The total number of the Company’s common shareholders was
approximately 18,900 as at 31 December 2023. The HFSF held 27% of the outstanding common shares and the remaining 73%
was held by the private sector and in particular 67% were legal entities and 6% individuals.
Going concern conclusion
Management has made an assessment on the Group’s ability to continue as a going concern. Management’s assessment
considered the Group’s principal business risks deriving mainly from the macroeconomic environment in combination with the
Group’s strategy, its liquidity and capital position. The following were taken into consideration:
a) the resilient economic growth in 2023, and the prospects for a positive rate of growth of GDP in the medium
term, which is expected to remain above the euro area average, mainly driven by the implementation of the RRP
and the inflow of private investments, the decelerating level of inflation mainly as a result of the dropping energy
prices, and the dynamic contribution of tourism in the current account balance;
b) the recovery of sovereign credit rating to investment grade status after more than a decade, by three (3) major
rating agencies, namely S&P, Fitch and DBRS, which reflects on the prudent fiscal policies and the implementation
of reforms including among others the restructuring of the banking sector;
c) the Group’s effective liquidity risk management, leading to a robust liquidity position as evident by the Liquidity
Coverage Ratio (“LCR”) as at 31 December 2023, as well as Management’s assessment of the impact of stress test
scenarios, within the Internal Capital Adequacy Assessment Process (“ICAAP”) and Internal Liquidity Adequacy
Assessment Process (“ILAAP”) framework, on the Group’s liquidity position and on mandatory liquidity ratios;
d) the capital adequacy of the Group, which exceeded the OCR - plus P2G - and the MREL ratio of Piraeus Group,
which exceeded the January 2024 Intermediate Guidance Target of 21.88%, as at 31 December 2023, as a result
of the successful issuances of two (2) senior preferred bonds in July and in November 2023 and the current year
profitability. It is estimated that for the next 12 months the Group’s capital adequacy ratios and the MREL ratio
will remain higher than the required minimum regulatory levels;
e) the geopolitical developments, which pose significant downside risks, with the Middle East and particularly the
Russia / Ukraine conflicts, due to the Group’s operations in Ukraine, which comprise a financial institution, namely
JSC Piraeus Bank ICB, and investments in RE assets which represent approximately 0.2% of the total consolidated
assets of the Company as at 31 December 2023;
f) the net profit attributable to the equity holders of the parent Company amounted to € 788 million and the NPE
ratio dropping to 3.5% as at 31 December 2023 from 6.8% as at 31 December 2022. NPE (cash) coverage increased
to 62% at year-end 2023 versus 55% a year ago.
Board of Directors' Report – 31 December 2023
24
Based on the analysis performed, Management has concluded that there are no material uncertainties which would cast
significant doubt over the ability of the Group to continue to operate as a going concern for a period of 12 months from the
date of approval of the annual financial statements. For this reason, the Group and the Company continue to adopt the going
concern basis of accounting for preparing the financial statements.
The basis of preparation is presented in Note 2.2 of the annual financial statements.
Non-Financial Information for 2023 (Greek Law 4403/2016)
Group Human Resources (“HR”)
In alignment with the Group's strategic goals and corporate values, it is the Group’s priority to ensure a modern work
environment that supports the well-being and continuous development of employees, rewards high performance, enhances
collaboration and open communication and at the same time fosters the retention and attraction of talent. Through relevant
actions, the Group cultivates the profile of a socially responsible employer, both for the existing and future employees, while
ensuring the sustainable development of the organization.
Training & continuous learning: In 2023 a new learning management system has been implemented in the Bank. The new
Piraeus “.edu” platform provides an upgraded learning experience, allowing 24/7 access from any device, flexibility in time an d
methods of attendance, personalized learning, enriched material from a variety of sources, easy and quick knowledge sharing.
Through the new platform, 1,275 training events were held, with the participation of 7,419 employees. The training activity
accounted 324,105 training hours, presenting an increase of 6% compared to 2022. The learning actions for 2023 were focused
on actions related to the new model operation of the Bank’s branches, the development and empowerment of talents, as well
as the design of the new risk awareness training program “Analyze This Training”, which aims to recognize, prevent and manage
risk. The program is addressed to all employees with mandatory monitoring and consists of 10 courses, covering topics such
as anti-bribery and corruption.
New Ways of Work ("NWoW”): In 2023, Piraeus Group launched a project to introduce NWoW in a systematic way. The
project’s key priorities are to improve employee satisfaction and productivity, retain and attract new talent, unlock operational
savings and have a positive environmental impact. This is a culture-strengthening initiative that promotes collaboration,
supports work-life balance, adjusts the work environment to employee needs and is technologically amplified. In order to
design the new model, an employee survey to approximately 3,500 employees was run in July regarding current ways of
working and future work preferences, 1:1 interviews with Executive Committee members were conducted and international
benchmarks were taken under consideration. As a result, the NWoW framework and policy, as well as the RE construction
guidelines for the new work areas were designed. The new model will be pilot tested in 2 buildings in 2024.
Performance Management: The 2022 performance cycle “Become & Achieve” was timely completed for 98% of eligible
employees. In this context, 110 performance calibration meetings were held, while the Objections Committee for performance
evaluations of 2022 examined 12 cases. The 2023 performance cycle was launched in March 2023, with 99% of the eligible
employees setting their contribution to the team's goals, while 89% of managers received feedback from peer and team
members.
Talent Management & Development: In 2023, the “Become & Grow” process was launched in order to identify, develop and
retain talent across the organization in an organized and systematic way, in line with the overall strategic framework. The
digital platform was also developed in order to support the implementation of the new process “Become & Grow”, while 10
awareness sessions were held addressing all people managers to familiarize with the new approach. Furthermore, the mapping
of all employees with potentiality and readiness was completed, resulting to the classification of 1,200 employees in
customized Talent Development Programmes, based on the assessment of performance, potentiality and readiness to
undertake a more complex role. Specific actions were designed for the development and retention of Talent Programmes
Board of Directors' Report – 31 December 2023
25
participants, while all employees were given the opportunity to design an Individual Development Plan. The implementation
of these actions started in the 2
nd
semester 2023 and is expected to be completed within 24 months.
Development Centers: 58 Development Centers were designed and implemented in order to identify the skills and
development potential of organization’s people and to support the promotion process and succession planning. The outcomes
of the evaluation form the basis for the creation and implementation of individual development plans, with multiple benefits
for the organization and the executives.
Succession Planning: The deployment of the Succession Planning process continued for the whole organization with the
identification of potential successors for critical roles and the development of the validation process by the pillar Heads. In this
context, potential candidates for critical positions are being identified, based on the “Become & Grow” outcomes related to
their potentiality and readiness to undertake more complex roles.
Meritocracy in selection and promotion of staff: In 2023, 197 internal job postings were posted, while in the same period the
Bank received about 2,115 resumes from external candidates and 213 internal transfer requests in "Workable" platform. The
number of positions that were filled in 2023, through them, was 248, out of a total of 296 staffing needs that were approved
within the reference year, while at the same time 382 promotions of existing staff were completed.
Management trainee program & internship program: In the same period, 67 candidates were evaluated and 10 new trainees
joined the 12-month management trainee program, aiming to hire the best of each year with an indefinite contract. At the
same time, 63 young people have completed their internship program.
A culture of ethics, inclusion and equal opportunities: As part of ensuring that business ethics are incorporated in all its
activities and that all employees are fully aligned with its values and principles, in early 2023 the Code of Conduct & Ethics’
updated context was approved by the BoD of the Bank, in order to align with the current institutional and regulatory
framework, Environmental, Social and Governance (“ESG”) principles and Group’s updated policies and regulatio ns. The
updated Code of Conduct & Ethics was assigned to all employees through the educational platform “.edu” in order for them
to be aware of its content. Within the framework of the Policy and Procedure against violence and harassment, 13 reports
regarding unprofessional behaviors were submitted through the whistle-blowing channel, which were handled by the new
committee established in overseeing such cases.
Violence and harassment in the workplace: With the aim of ensuring a working environment that promotes respect and zero
tolerance for incidents of violence and harassment, educational actions were implemented to align the new committee to deal
with incidents of violence and harassment and to form a mutual understanding of the Group HR team that investigate the
incidents. At the end of 2023, the Violence and Harassment Committee received a total of 28 cases, of which 23 were examined,
in accordance with the institutionalized procedure.
"yello" – The new intranet of the Bank: The redesign of the new intranet ("yello") aligns with the organization's strategic
directions for internal digital transformation and supports NWoW. In July 2023, the 1st Minimum Viable Product (“MVP”) was
implemented. The new common digital communication hub provides all employees with 24/7 access from any device to
operational and business news, articles on strategic issues and the organization's culture, and an updated employee directory.
Since its launch, the new intranet has been visited by approximately 8,800 unique users with over 2.6 million visits, while 3
articles and 6 operational news are posted every day, on average.
Health, safety & well-being of employees and their families: Actions focused on strengthening the culture of health and safety
prevention. In April 2023, the "Holistic Health Week" was organized, where over 700 employees participated in preventive
screenings and attended cybertalks on health and well-being topics. At the same time, experiential first aid training sessions
were conducted covering 70 employees. Αt the same time, in collaboration with the Kids Save Lives Association, the 5
defibrillators of the Bank, based in central administration buildings were registered in a Nationwide AED Map so that they ar e
accessible to the community. Personalized counselling through the 24/7 Helpline and free 1:1 sessions continued to be active
for all employees and their families. To support parenthood, a total of 120 cumulative maternity leaves were granted in the
Board of Directors' Report – 31 December 2023
26
first semester. During this period, no accidents were recorded according to the European Statistics on Accidents at Work
(“ESAW”) methodology.
“Ef zin” program: With a holistic Mind-Body-Bonds approach, a total of 46 actions were carried out in 2023 as part of the
Bank's health and well-being program, both physical and digital, with over 5,200 employees from across Greece showing
interest in these actions. The actions include, among others, participation in major running events, workshops that raise
awareness on environment issues, actions that raise awareness on social issues, cultural and recreational activities for
employees’ children of all ages.
Piraeus Group Personnel Institution for Occupational Retirement, Life & Μedical Provision (“IORP”): Following the
establishment of the allowance for assisted reproduction in 2022, by the Collective Labor Agreement, the reimbursement of
the relevant benefit to the eligible population was completed in the first semester of 2023. Additionally, the Group expanded
the coverage of the Medical-Pharmaceutical Program by increasing the maximum insurable age limit for the employees'
children by three (3) years, from 25 to 28 years of age, regardless of their educational status, in order to improve their level of
medical care for its employees and their families.
Directors’ Remuneration Policy Update: Following a respective recommendation by the Remuneration Committee, and the
proposal of the BoD of the Company, approved by the annual GM of Shareholders, conducted on 27 June 2023, the amendment
of the Company’s Directors’ Remuneration Policy took place, in accordance with article 110 of Law 4548/2018. The revised
Directors’ Remuneration Policy is available in the corporate website
5
.
Group Remuneration Policy: In July 2023, following a relevant recommendation by the Remuneration Committee and approval
by the BoD, the Group Remuneration Policy was updated in order to be aligned with the existing regulatory framework and
the market trends.
Variable Remuneration Schemes
• Annual Variable Incentive Scheme: During the 2
nd
semester of 2023, the annual variable incentive scheme was
implemented to employees for the performance year 2022, rewarding employees’ high performance (employees from
the level of general manager or higher were excluded according to the law). The incentive scheme is structured to
enhance both the individual and team effort and the amounts are determined based on predetermined, measurable,
quantitative, and qualitative criteria that are related to the Group's strategy.
• Retention Scheme: In the context of strengthening the commitment of Senior Management team in the organization,
the BoD, upon the Remuneration Committee’s recommendation, approved in May 2023 a one-off scheme aiming to
align this specific population with the long-term progress and profitability of the Group. The said scheme provides for
the fulfillment of specific conditions and its mechanism is fully harmonized with the applicable legal and regulatory
framework.
Free Distribution of Shares Plan: Following the respective recommendation by the Remuneration Committee and the proposal
of the BoD, the annual GM, conducted on 27 June 2023, decided to grant free common shares of the Company aiming to
compensate executives and employees for their contribution to the achievement of the Group’s strategic objectives and of
specific financial and operational goals, and/or to retain them and recruit new, remarkable and capable executives, that serv e
and ensure the long-term interests and sustainability of the Company and its affiliates. Additional disclosure on the
beneficiaries, the conditions or/and performance and/or retention criteria will be provided ex-post in the Remuneration
Report.
Establishment of a Stock Option Plan: The Company’s BoD, pursuant to the authorization granted on 7 April 2021 by the
Extraordinary GM of the Company’s shareholders according to article 113 par. 4 of Law 4548/2018, proceeded on its meeting
held on 16 November 2023, to the establishment of a Stock Option Plan for executives and employees of the Company a nd
its affiliated companies within the meaning of article 32 of Law 4308/2014, in the form of stock option rights. The Plan will
5
https://www.piraeusholdings.gr/~/media/Com/2023/Files/Investors/Corporate-Governance/board/PFH-en-Directors-Remuneration-Policy2023.pdf
Board of Directors' Report – 31 December 2023
27
serve as a means of payment of remuneration payable in instruments, to employees and executives of the Company and its
affiliated entities, on the terms and conditions provided in the Directors’ and the Group Remuneration Policies and the
particular remuneration schemes adopted from time to time.
The basic terms of the Stock Option Plan are included in the relevant Company’s announcement dated 17 November 2023.
6
Anti-bribery and corruption
The Group is committed to high standards of ethical behavior and operates a zero-tolerance approach to bribery and
corruption. In this context, the Group has adopted appropriate measures to protect its reputation in matters of ethical conduct,
financial integrity and reliability of its operations. Consequently, all employees receive training for the recognition and
avoidance of involvement in bribery and are encouraged for the awareness and prompt reporting of any case in which bribery
is suspected within the administration of the Group.
The prevention, detection and reporting of bribery is the responsibility of all employees and the Management of the Group as
detailed in the Group Whistle Blowing Policy, the Anti-Bribery Policy and the Conflict of Interest Policy. Moreover, Group
employees are familiar with the Code of Conduct and Ethics, which describes the mission, the role and the main policies and
procedures regarding HR. For the purposes of the foregoing, the Group has established appropriate communication channels
for those reporting on cases of bribery, fraud and corruption or for any potential suspicion, with the utmost confidentiality so
as to immediately inform the competent authority. By authorization of the Audit Committee, the Bank Whistleblowing
Committee is responsible for the management of confidential claims made by employees or third parties regarding the Group.
The Group Internal Audit (“GIA”) has been charged wit h the management concerning the confidential reporting of staff on
issues of bribery, corruption and fraud.
Participation in Global Sustainability Initiatives
Piraeus Group adheres to sustainability standards and principles, aiming to conduct its business with transparency and in an
environmentally and socially responsible manner. The Bank is a member of the United Nations Global Compact and the United
Nations Environment Programme – Finance Initiative (“UNEP FI”). The Group has signed the UN Declaration "United in the
Business of a Better World", supporting global business partnerships with responsibility and transparency, the Women's
Empowerment Principles (“WEPs”) under the UN Global Compact and UN Women and the Commitment to Financial Health
and Inclusion (“FH&I”) under UNEP FI.
The Bank is a full member of the Hellenic Network of Corporate Social Responsibility (“CSR Hellas”), of the ESG-Sustainability-
Governance & Green Banking Steering Committee of the Hellenic Banking Association (“HBA”) and participates in working
groups for sustainable banking. In addition, the subsidiaries Piraeus Asset Management A.E.D.A.K. and Iolcus Invetsments AIFM
are signatories t o the UN Principles for Responsible Investment (“PRI”).
ESG Ratings and Sustainability Distinctions
Piraeus Group is included in the FTSE4Good sustainability index and the Bloomberg Gender Equality Index which assesses the
organization's contribution to gender equality. The Group received a “Management B” rating (scale A to D) in the climate
change assessment of the independent non-profit organization Carbon Disclosure Project (“CDP”) and an “A” rating from the
6
https://www.piraeusholdings.gr/en/press-office/press-release/2023/11/press-release-17-11-2023
Board of Directors' Report – 31 December 2023
28
MSCI ESG index (AAA to CCC scale). ISS Corporate Solutions rated the Bank with "1 – HIGHER DISCLOSURE" in the environmental
pillar, and 2 in the governance and society pillars (scores as on 1 December 2023 / a score of 10 indicates higher risk).
The Bank is the only Greek Financial Institution included in the Financial Times “Europe’s Climate Leaders 2023”, for the
significant reduction it achieved in Scope 1 and Scope 2 emissions intensity, over the period 2016-2021 and its commitment to
emissions reduction plans. It is worth mentioning that the Bank is the only Greek company included in this list for three (3)
consecutive years. Finally, it is the only Greek bank included in the sustainable investment register of the Forum Ethibel as a
“Pioneer” in sustainability practices.
Commitment to the Principles for Responsible Banking
The UNEP FI Principles for Responsible Banking (“PRB”), launched in 2019, aim to align the activities of banks with the 17 UN
Sustainable Development Goals (“SDGs”) and the Paris Climate Agreement. The Bank has been elected on the UNEP FI Banking
Board and holds one (1) of the two (2) co-chairs. The overall oversight for the implementation of the Principles rests with the
Group CEO, who is also one of the 20 Heads of banks and insurance companies from around the world participating in the
Leadership Council of UNEP FI.
The Bank has published its fourth annual progress report on the PRB
7
, including its portfolio impact analysis results. The
"Portfolio Impact Analysis Tool for Banks" (the “Tool”) was developed by UNEP FI and the dedicated working group in which
the Bank participated. The Tool estimates the positive and negative impacts that the financing activities of banks have on
sustainable development and more specifically on three (3) pillars: natural environment, social, socio-economic.
Following the Portfolio Impact Analysis and the strategic priorities of the organization, the Bank prioritizes the following areas
as the most significant:
▪ FH&I, focusing on Healthy Economies and Flourishing Micro-Small and Medium-sized Enterprises (“MSMEs”), and
▪ Climate Stability.
The Bank has set SMART (i.e., Specific, Measurable, Achievable, Relevant, and Time-bound) targets for FH&I and for Climate.
FH&I Targets
The Bank has signed the UNEP FI Commitment for FH&I and participates in the UNEP FI working group, that aims to establish
Key Performance Indicators (“KPIs”) for mapping, monitoring, and setting targets. The aim is to support the most vulnerable
people to have opportunities to secure and maintain their standard of living and take steps to improve their financial health,
such as long-term financial planning and access to credit and insurance. According to its first target announced, the Bank will
provide at least 3,000 young farmers with effective access to loans, in order to start or continue their own farming business
and live in the countryside.
ESG Strategy – Piraeus Group’s climate strategy and ESG indicators
Piraeus Group business strategy and financial planning aim at promoting, through the subsidiary Piraeus Bank, responsible and
sustainable banking. This is outlined in the Group’s Sustainable Development Policy and its ESG strategy, which puts special
emphasis on four dimensions:
7
For the alignment of the Bank with the Principles of Responsible Banking, see: https://www.piraeusbank.gr/~/media/gr/idiwtes/files/unep-
fi/2023_pb_prb_report_2022-final_pages.pdf
Board of Directors' Report – 31 December 2023
29
• Reach net zero in own operations by monitoring and managing environmental impact closely, investing in
operational efficiency solutions, and sourcing 100% renewable energy for the Bank buildings;
• Steer portfolio towards net zero by 2050 by focusing on the carbon-intensive sectors and measuring alignment of
lending with our climate and nature solutions;
• Support and advise clients in line with a carbon neutral and nature positive economy by accelerating the green
economy, financing transition, and pioneering financing for new technologies and business models;
• Manage climate by fully integrating climate and environmental risks in the risk management framework and by
helping clients protect their business from climate and environmental risks, providing advice, and financing their
transition.
ESG Risk framework
Piraeus Group has established a comprehensive Risk Management Framework to identify, measure, control, and mitigate
underlying risks, including climate and environmental risks. The annual Risk Identification (“RID”) process is applied to identify
the relevant and material risks, by taking into consideration the environment in which it operates and its business model. Th e
risks that are expected to have a substantive financial or strategic impact on the Group’s business are deemed material. The
materiality assessment can be performed on a quantitative or qualitative basis or through a combination of both. During the
RID exercise, “climate change” (physical & transition risks) has been recognized a s a risk driver for many key risk categories (i.e.
credit, market, liquidity, operational, business & strategic, and reputational risks), and ESG and climate-related risks have been
identified as a standalone risk subcategory as well. Moreover, since the Group recognizes that climate change-related risks are
expected to intensify in the longer term (i.e. over the next five years), it has launched several initiatives to take account of
environmental considerations in the business targets, strategies, risk management, and decision-making process.
The Group has already identified the business functions across all Three Lines of Defense (“LoD”) related to or affected by
Climate-related and environmental (“C&E”) risks and the respective policies in order to map any gaps and ensure that climate
and ESG aspects are incorporated accordingly. In this context, a review of Group’s policies has been initiated and separate
working groups per function are formed to support responsible Business Units to review policies under their ownership through
a C&E lens.
ESG Disclosure frameworks
All binding disclosure frameworks by the European and/or national legislation have already been embedded in the reporting
processes of the Group respecting the corresponding deadlines, while the voluntary is an over-and-above effort of the Bank to
provide even greater transparency regarding the Group’s management of Climate and ESG issues and its performance (Task
Force on Climate Related Financial Disclosures, “TCFD”, CDP, Science-Based Targets Initiative, “SBTi”, PRB, etc.). Undoubtedly
for Financial Institutions, the Pillar III Disclosure in 2023 launched a new mandate regarding Climate and ESG disclosure and
benchmarks, that will eventually feed into other climate related disclosure reports.
Piraeus Group acknowledges that the full incorporation of C&E Risks in its disclosures is an ongoing process and enhances its
efforts, in order to gradually strengthen its capabilities with the aim to be fully compliant by 2024 also with other reporting
frameworks (i.e. Corporate Sustainability Reporting Directive, “CSRD”, Sustainable Finance Disclosure Regulation, “SFDR” etc.).
Piraeus Group’s disclosures are subject to rigorous internal and/or external controls ensuring their completeness and
compliance with the prevailing standards. With these control mechanisms in place, incomplete and misleading Climate & ESG
information is avoided, and the potential negative reputational impact is mitigated.
Climate Targets - SBTI
Board of Directors' Report – 31 December 2023
30
In line with its climate strategy, Piraeus Group submitted intermediate science-based emission targets to the SBTi, which aim
to reduce greenhouse gas emissions by 2030, both in operations and in lending & investment portfolios. The Bank adopted the
SBTi m ethodology, as it provides a clearly defined pathway for financial institutions to reduce greenhouse gas (“GHG”)
emissions, helping prevent the worst impacts of climate change and future - proof business growth. Piraeus Group has set mid-
term (2030) targets for operational emissions (Scope 1 and Scope 2). Additionally, Piraeus Group has set targets for 9 asset
classes, of which 6 follow the Sectoral Decarbonization Approach (“SDA”) and 3 the Temperature Rating Methodology (“TRM”)
methodologies.Overall, the SBTi targets aim to reduce emissions by over 50% by 2030. This target setting is in line with the
national targets (National Energy and Climate Plan, “NCEP“and Climate Law) according to which Greece will reduce emissions
55% by 2030 and 80% by 2040.
Progress results for 2022 are presented in the Table below.
Board of Directors' Report – 31 December 2023
31
Operations
GHG
emissions
Scope 1 &
Scope 2
(tCO2eq)
(base year
2019)
GHG
emissions
Scope 1 &
Scope 2
(tCO2eq)
(target year
2030)
GHG
emissions
reduction
(%)
Actual
GHG
emissions
intensity
(2022)
Actual GHG
emissions
reduction
(2022)
Progress
• Direct and indirect GHG from
branches and administrative
buildings
• Continue annually sourcing 100%
renewable electricity through
2030
7,880
2,136
-73%
2,083
-74%
Portfolios under the SDA
GHG
emissions
intensity
(base year
2019)
in kg CO
2
/
m
2
GHG
emissions
intensity
(target year
2030)
in kg CO
2
/
m
2
GHG
emissions
reduction
(%)
per m
2
Actual
GHG
emissions
intensity
(2022)
in kg CO
2
/
m
2
Actual vs
expected
GHG
emissions
reduction
(2022)
• Commercial RE loans in residential
buildings managed by companies
34
17
-50.2%
24
-29.5% | -
13.8%
• Commercial RE loans in
commercial buildings managed by
companies
59
25
-58.1%
45
-23.5% | -
15.9%
• Commercial RE investments in
residentials buildings
33
16
-50.2%
25
-23.1% |-
13.7%
• Commercial RE investments in
commercial buildings
71
30
-58.2%
41
-41.8% |-
15.9%
• Investments in listed RE
companies (“REITs”)
59
25
-58.1%
45
-23.5% |-
15.9%
• Investments in bonds issued by
companies active in the electricity
production
0.657 tn
CO
2
/ MWh
0.335 tn
CO
2
/ MWh
-49.1%
0.575 tn
CO
2
/
MWh
-12.5% |-
13.4%
Board of Directors' Report – 31 December 2023
32
• Electricity generation sector:
continue financing and investing
only in renewable electricity
activities through 2030
Portfolios under the TRM
Portfolio
temperature
score
2
(base
year 2019)
Portfolio
temperature
score (target
year 2027)
Temperature
reduction
per annum
Actual
temperature
score for
2022
• Investment in listed stocks
2.83 °C
2.42 °C
-0.051 °C
3.19 °C
• Long - term (>1 year) loans (for
large corporates with 500+
employees)
2.85 °C
2.43 °C
-0.052 °C
2.56 °C
• Investment in corporate bonds of
listed companies
1.83 °C
1.80 °C
-0.004 °C
2.26 °C
On track to achieve 2030 target Continue working in order to achieve targets
Board of Directors' Report – 31 December 2023
33
To support its sustainable finance and meet emission reduction targets Piraeus Group has developed:
• a dedicated Sustainable Finance Framework (“SFF”) that aims to establish a clear and comprehensive
methodology for identifying sustainable financing, thus facilitating the monitoring of the Bank’s performance
against sustainability-related strategic aspirations and targets;
• a Green Bond Framework under which the Group issues green bonds and uses the proceeds to finance the
low-carbon economy transition in Greece;
• Sustainability Linked Loans Framework for loan instruments for which economic characteristics can vary
depending on whether the borrower achieves predetermined sustainability performance objectives.
Task Force on Climate Related Financial Disclosures (TCFD) Recommendations
The Group complies with the TCFD Recommendations, that suggest disclosing detailed financial information on climate change
management in four (4) pillars: Governance - Strategy – Risk Management (“RM”) - Metrics and Targets. In 2023, the Bank
published its fourth comprehensive report, which was externally assured.
8
Energy Transition
Piraeus Group has launched its Energy Transition Project as a concrete commercial program/ action plan, which will allow the
Bank to assume a frontrunning role in its clients’ transformations to build a better and more sustainable Greek economy. It w ill
leverage a structured approach and deep understanding of the specific needs of each sector with priority focus on Power
Generation, RE / buildings, Agriculture and promote a tailor-made approach to support small businesses and individuals. The
Group’s ambition on energy transition: € 5 billion energy transition financing by 2026, including bonds issuance and in-house
mutual funds.
Environmental and Carbon Footprint
The Bank’s Environmental Management System is registered under the EU Eco-Management and Audit Scheme (“EMAS”) and
is certified in accordance with ISO 14001:2015, whereas from 2024 onwards it will also be certified according to the
International Standard ISO 50001:2018 for energy management. The environmental data and KPIs are reported in the Group’s
Sustainability & Business Report and in the Environmental Statement. Electricity consumption, as well as Scope 1, Scope 2 and
Scope 3 GHG emissions are externally assured according to the relevant Global Reporting Initiative (“GRI”) Standards.
It is worth noting that to meet its Scope 2 targets, the Bank has secured Guarantees of Origin (“GOs”), certifying that 100% of
the electricity consumed on its premises are sourced from renewable energy, thus achieving zero Scope 2 market-based
emissions. According to the latest available data, 38,900 MWh were cancelled in the electronic certificate registry at a cost of
€ 23.300 (plus VAT 6%). This cost is expected to rise significantly in the future.
Scope 1 emissions saw a 27% annual decrease, due to the reduced heating oil consumption and the decreased use of
refrigerants added to air-conditioning systems. Since 2019, direct emissions (Scope 1) have dropped by 27%.
Scope 2 emissions were reduced by approximately 30% YoY, following the energy saving interventions, the change in the
country's energy mix and the shrinking branch network. Scope 2 emissions have been reduced by 51% over the period 2019-
2022.
In total, the operational footprint of the Bank (Scope 1, Scope 2 location-based, Scope 3 categories 1-14) has been reduced by
7% over the period 2021-2022.
8
Piraeus 2023 TCFD report: https://www.piraeusholdings.gr/~/media/Com/2023/Files/Sustainable-Banking/2023_PIRAEUS_GROUP_TCFD_Report_.pdf
Board of Directors' Report – 31 December 2023
34
The financed scope 1, 2, and 3 emissions attributed to the exposures of the Group have been estimated based on the
Partnership for Carbon Accounting Financials (“PCAF”) methodology. The methodology comprises two main steps: first the
determination of the scope 1, 2, and 3 emissions of the counterparties and then their attribution to the Group’s finance d
activities. Due to data availability constraints, different methodological approaches were applied to estimate the scope 1, 2,
and 3 emissions of the Group’s counterparties, namely:
▪ Method 1: Published emissions were used, where verified or unverified emissions were collected from the
counterparty directly (e.g. through the company’s sustainability report) or indirectly via verified third-party data
providers (e.g. CDP), EU Emissions Trading System (“EU-ETS”) Registry, Thetis database). Particularly for the sector
H.50 (maritime transport) the Thetis database was utilized, through which each counterparty was linked with its
owned vessels based on the respective International Maritime Organization (“IMO”).
▪ Method 2: GHG emissions were calculated based on primary physical activity data collected from the borrower,
applying appropriate emission factors issued or approved by a credible independent body. The method has been
implemented only for sector D.35.11 regarding power generation companies using renewables. The emissions of all
counterparties in D.35.11 that use fossil fuels were estimated under Method 1.
▪ Method 3: GHG emissions were calculated based on economic activity data of the counterparty in question (e.g. total
revenues or total assets) and appropriate emission factors expressed per economic activity (e.g., tonnes of CO
2
equivalent per million EUR output of the corresponding sector). To this end, a multiregional input-output analysis was
implemented for estimating emission factors per economic activity by utilizing the set of Input-Output tables recently
published by Organization for Economic Cooperation and Development (“OECD”).
Addressing Climate Change
Every year the Bank assesses, with the use of the Climabiz tool, the climate risk of its business borrowers. The climate risk
calculation is done in monetary terms (€) for business borrowers across different economic sectors that are mostly sensitive
to climate change. The calculation methodology is based on the utilization of three (3) climate Representative Concentration
Pathways (“RCP”) scenarios of the Intergovernmental Panel on Climate Change (“IPCC”).
To assess climate related risks, Climabiz uses a set of RCPs of the IPCC, which are GHG concentration scenarios that are
commonly used in the climate modeling community.
Each of the RCPs used by Climabiz offers a plausible and internally consistent description of the future:
• RCP2.6 is a "very stringent" pathway and is likely to keep global temperature increase below 2°C by 2100.
• The intermediate IPCC stabilization scenario, RCP4.5, is more likely to result in a global temperature rise
between 2°C and 3°C by 2100 (35% higher than that of RCP2.6).
• The high emission pathway, RCP8.5, is generally taken as the basis for the worst-case scenario (with a
global mean temperature increase of approximately 4-5°C).
The Climabiz measures both physical and transition risk quantifying them separately. The quantification considers several
factors (e.g. counterparty’s economic sector, annual turnover and location). The financial impact is then expressed on a rela tive
basis compared to the company’s annual turnover.
The table below presents the percentage of physical risk and transition risk over total climate risk per each RCP climate scenario
for the Bank’s corporate portfolio in 2022.
Board of Directors' Report – 31 December 2023
35
Climate Scenarios
% of Physical Risk
over Total
Climate Risk
% of Adjusted Transition
Risk over Total
Climate Risk
RCP2.6
7%
93%
RCP4.5
14%
86%
RCP8.5
42%
58%
The key differences concerning the climate risk outputs between the climate scenarios are primarily identified in the
fluctuations of the transition risk components, driven mainly by the carbon emissions allowances prices.
For the cost of direct and indirect emissions, three (3) different prices were used for the carbon emission allowances €/t CO
2
,
for each of the periods 2021-2030/2031-2040/2041-2050, per RCP climate scenario. Indicatively for the period 2021-2030, the
emissions allowance price used for the climate risk calculation were:
▪ € 80/t CO
2
for RCP2.6
▪ € 73.5/t CO
2
for RCP4.5
▪ € 21.44/t CO
2
for RCP8.5.
The aim is to establish processes for collecting and utilizing climate and environmental information needed to assess the
business borrower’s vulnerabilities to those risks, notably before concluding a loan agreement, in line with the Bank’s risk
policies and procedures.
Furthermore, the broader aim is the gradual and systematic integration of climate risks in all business and operational activities.
Exploring biodiversity challenges
Following the signing of the global “Finance for Biodiversity Pledge”, to set targets by 2024 for supporting business activities
that protect and enhance the natural environment and reverse biodiversity loss, Piraeus Group participates in international
finance and biodiversity initiatives. It follows developments in the financial sector, globally and in the EU, regarding the
management of biodiversity dependency and risks.
In 2022, the Bank developed a methodology (the PHYSIS tool), based on existing databases and best practices, to assess impacts
of its financing on biodiversity. Following a pilot impact analysis for the energy and agriculture sectors, in 2023 PHYSIS tool was
used to incorporate the whole business portfolio for the calculation of the Bank’s biodiversity impact.
Materiality Analysis Methodology
Piraeus Group annually discloses and focuses on the most significant non-financial aspects of its operations, in the context of
enhancing transparency and sharing information on corporate responsibility issues. For this reason, the Bank annually conducts
a "Materiality Analysis", an analysis of the most material sustainability issues, applying the methodology of the GRI Standard,
one of the most recognized standards for conducting sustainability reports.
At the first stage of the Materiality Analysis, the Organization identifies its most important stakeholders and engages in a
continuous dialogue with them, in order to respond to their needs and expectations, while highlighting current and material
Board of Directors' Report – 31 December 2023
36
sustainability issues. These issues are characterized as material, as they reflect the Organization's significant economic,
environmental and social impacts or they influence the decisions of stakeholders. They form the basis for the development
and planning of actions for continuous improvement of the Bank's activities. During the second stage of the Materiality
Analysis, the Bank conducts a Materiality Survey and an organized focus group discussion with targeted groups of stakeholders
to prioritize material sustainability issues.
In 2022 the Bank advanced the Materiality Analysis process, introducing for the first time the concept of "Double Materiality"
in the annual Materiality Survey, in accordance with the current European framework for non-financial information disclosures.
Applying the Double Materiality, the Bank seeks to recognize and evaluate on the one hand the impacts that its activities have
on the sustainable development of the country, that is, on the economy, society and the environment, and on the other hand
how the most significant sustainability issues, such as climate change, the loss of biodiversity etc., affect the financial value of
the organization. Double Materiality, therefore, identifies and assesses the sustainability issues that are important for the
economy, society and the environment (Impact Materiality) and that have an impact on the Group's business value (Financial
Materiality). To conduct the Double Materiality, the Bank examines and identifies the most important and current sustainability
issues and includes them into a structured questionnaire, which it addresses to its stakeholders - inside and outside the
Organization. In addition to the questionnaire process, focus group discussions with targeted stakeholders are also organized,
through which the Bank gathers valuable feedback as well as different perceptions and opinions.
As part of the process, all participants are invited to evaluate, based on a standardised scale, the (actual and potential negative
and positive) impact of sustainability issues within and outside the Group. Specifically:
▪ The Management and shareholders of the Group are invited to evaluate how sustainability issues affect the financial
value of the Organization, that is, the degree of impact these issues have on the Bank, while highlighting those that
significantly affect the financial results or position of the Bank (Financial Materiality).
▪ Other stakeholders are invited to assess the scope and degree of impact that the organization's activities have on
sustainability issues and highlight those with the strongest impacts on the environment, society, human rights and
the economy, while at the same time examining to what extent the Bank contributes to resolving a negative impact
(Impact Materiality).
The questionnaire for the Materiality Analysis, conducted as part of the Sustainability and Business Report 2022, included 12
sustainability material topics which received the following score:
Board of Directors' Report – 31 December 2023
37
Relative Double Materiality Score
Impact
Materiality*
(max 100)
Financial
Materiality
(max 100)
Double
Materiality
(max 100)
Q1. Creation of economic value
95.2
98.3
95.9
Q2. Νew technologies
94.9
94.3
95.0
Q3. Providing equal access to banking services
92.2
90.9
92.2
Q4. Responsible Βanking: Financing sustainable development
with environmental and social criteria
100.0
93.7
99.2
Q5. Financing energy transition
98.5
91.7
97.6
Q6. Protection of personal data
99.8
100.0
100.0
Q7. Promotion of human rights
97.6
91.1
96.7
Q8. Combating unconscious biases and stereotypes in the
workplace
96.9
87.6
95.6
Q9. Promoting and supporting gender equality
96.7
92.0
96.1
Q10. Supporting the new generation
94.4
91.4
94.1
Q11. Highlighting the development potential of the country's
cultural reserve
89.9
87.6
89.7
Board of Directors' Report – 31 December 2023
38
Q12. Support and promotion of the Creative Economy in Greece
86.9
85.8
86.9
*Impact Materiality = Scope of impact + Scale of impact + Remediability
It is worth mentioning that the same material topics may change over time, as deeper knowledge of these is acquired. Both
the Materiality Analysis and the accompanying text receive third-party assurance, a testament to the Group’s commitment to
transparency and alignment with international best practices.
Disclosure obligation in accordance with article 8 of the EU Taxonomy Regulation
In 2020, the European Parliament adopted the EU Taxonomy Regulation (EU Regulation 2020/852), setting out an EU-wide
framework -a classification system- that allows investors and undertakings to determine whether certain economic activities
are environmentally sustainable. On 4 June 2021 the EC adopted the Commission Delegated Regulation (EU) 2021/2139,
establishing the technical screening criteria for the climate change mitigation and climate change adaptation objectives, and
on 6 July 2021 the Commission Delegated Regulation (EU) 2021/2178 (“the Disclosures Delegated Act”), which supplements
Article 8 of the Taxonomy Regulation and specifies the content, methodology and presentation of information to be disclosed
by financial and non-financial undertakings concerning the proportion of environmentally sustainable economic activities in
their business, investments or lending activities. On 15 July 2022, a Complementary Climate Delegated Act was released in the
Official Journal of the EU, including, under strict conditions, specific nuclear and gas energy activities in the list of economic
activities covered by the EU Taxonomy. Sequentially, in November 2023, the Delegated Act for economic activities was
published in the Official Journal of the EU contributing to the four additional environmental objectives for: sustainable use and
protection of water, transition to a circular economy, pollution prevention and control, and protection and restoration of
biodiversity and ecosystems. Further amendments were incorporated to add economic activities to the list of those
substantially contributing to the objectives of climate change mitigation and adaptation, and to clarify the reporting obligations
for the additional four environmental objectives.
The EU Taxonomy is a cornerstone of the EU’s sustainable finance framework and an important market transparency tool. It
helps direct investments to the economic activities most needed to meet the European Green Deal objectives. The Taxonomy
is a classification system that defines criteria for economic activities that are aligned with a net zero trajectory by 2050 and
broader environmental goals over and above climate change.
A key indicator of alignment is the Green Asset Ratio (“GAR”) which enterprises must disclose from 2024 onwards. For credit
institutions specifically, GAR is defined as the proportion of its assets invested in Taxonomy-aligned economic activities over
its total covered assets. An economic activity is considered as Taxonomy-aligned when it satisfies all three conditions below:
i. makes a substantial contribution to at least one of the six environmental objectives;
ii. avoids negative effects on the other five objectives (Do No Significant Harm, “DNSH"); and
iii. respects minimum social safeguards.
On the other hand, an economic activity is considered Taxonomy-eligible, as long as it is described in the EU Taxonomy
Regulation, regardless of whether it satisfies the above conditions.
The GAR is calculated based on the on-balance sheet exposures (total covered assets) according to the prudential scope of
consolidation for the types of assets and accounting portfolios specified in the Disclosures Delegated Act. Credit institutions
are required to disclose the aggregate GAR for on-balance sheet covered assets, a breakdown for the environmental objective
pursued by environmentally sustainable assets, the type of counterparty, and the subset of transitional and enabling activities.
Board of Directors' Report – 31 December 2023
39
The disclosure requirements commenced in 2021 and initially focused on Taxonomy eligibility and respective ratios. Starting
from the financial year 2023, the disclosures will include information and respective KPIs on Taxonomy alignment, over and
above eligibility.
EU Taxonomy alignment (as a proportion of Group’s total covered assets (%)
31/12/2023
Taxonomy
aligned
based on
turnover
€ million
GAR %
based on
turnover
Taxonomy
aligned
based on
CAPEX €
million
GAR %
based on
CAPEX
1. GAR for credit institutions (total of climate change mitigation and climate change adaptation)
-
-
-
-
2. GAR for other financial undertakings (total of climate mitigation and climate change adaptation)
26
5.57
143
30.96
3. GAR for non-financial undertakings (total of climate change mitigation and climate change
adaptation)
263
7.50
1,010
28.79
4. GAR for loans collateralized by residential immovable properties (climate change mitigation)
38
0.68
38
0.68
5. GAR for building renovation loans (climate change mitigation)
58
8.89
58
8.89
6. GAR for motor vehicle loans (climate change mitigation)
-
-
-
-
7. GAR for loans to local governments for house financing and other specialised lending
-
-
-
-
8. GAR for collateral obtained by taking possession: residential and commercial immovable properties
(climate change mitigation)
-
-
-
-
9. Total
385
0.90
1,249
2.91
Total covered assets
42,965
-
42,965
-
Group’s total assets
76,450
-
76,450
-
In estimating the above figures, the Group followed an adequately conservative approach, refraining from recognizing
Taxonomy alignment in cases where all regulatory requirements (including technical screening criteria and DNSH) are not fully
met. Due to limitations in available information, in particular around dedicated-purpose financings, a substantial amount of
exposures that are aligned to the Group’s internal sustainable finance framework has not been recognized as Taxonomy-
aligned. Furthermore, when it comes to corporates, Taxonomy-aligned activities are limited to undertakings subject to the
Non-Financial Reporting Directive (“NFRD”) and, as a result, respective KPIs do not include exposures to SMEs.
Piraeus Group reports on Taxonomy KPIs and GARs, based on relevant input from non-financial counterparties, including
information on turnover and CAPEX associated with eligible and aligned economic activities. As at reporting date, financial
counterparties had not yet reported their Taxonomy-aligned exposures and related KPIs. Taxonomy-eligible and non-eligible
activities related to the four non-climate environmental objectives are not reported for the financial year 2023 due to lack of
required data.
When assessing Taxonomy-eligible and Taxonomy-aligned activities for financial and non-financial undertakings, actual
information published by counterparties has been leveraged to the extent possible.
The Group’s total GAR based on turnover amounted to 0.9% of total covered assets, and total GAR based on CapEx was 2.9%
of total covered assets as at year-end 2023. It is noted that both ratios cover the two climate-related environmental objectives
(mitigation and adaptation) of the EU Taxonomy.
Board of Directors' Report – 31 December 2023
40
The Group is committed to continuously improve its processes and enhance the availability of data and its frameworks and
processes to upgrade its reporting scope according to the EU Taxonomy.
Through its financing of large undertakings subject to the NFRD and investments in securities, Piraeus Group supports a variety
of economic activities that contribute substantially to the EU environmental objectives. Furthermore, the Energy Transition
Business Building project of the Bank contributes to the EU environmental objective on climate change mitigation.
Furthermore, the Group is taking steps to enhance the EU taxonomy eligibility. Namely net credit expansion for Renewable
Energy Sources (“RES”) projects exceeded € 500 million in 2023. The total RES exposure amounted at € 2.7 billion. This
particular loan portfolio grew further as the Group’s inaugural Green Bond issued in November 2021 had earmarked € 500
million that are allocated to eligible Green Projects according to the Group’s Green Bond Framework. This portfolio is not in
absolute accordance with the Taxonomy Regulation, as a full-blown assessment of the technical screening criteria according
to the Taxonomy is currently constrained by the limited data availability. However, the Group believes that it can contribute
to the increase of the GAR ratio once the alignment criteria (technical screening, DNSH, and minimum social safeguards) are
applied.
In Retail Banking, the ESG agenda has unfolded both in the lending and investment products portfolio. The Bank has supported
households in the program “Energy Saving at Home” by supporting the effort to upgrade Greece’s aging real estate stock and
improving the environmental performance of homes, cutting energy costs. In 202 3, new production of this portfolio amounted
to € 44 million. A complete range of financing solutions to meet every "green" small business need is also provided, such as:
financing the installation & upgrade of Photovoltaic Stations, net metering and the energy efficiency upgrade of businesses o r
the purchase of an electric or hybrid car etc.
The Group’s aim is to gradually align its objectives to be consistent with the EU Taxonomy. Our sustainable finance proposition
will be to support our customers' transition, incorporating in the relevant processes the definitions and criteria of the EU
Taxonomy.
Appendix A presents the reporting templates in accordance with Delegated Regulation (EU) 2021/2178, Annexes VI and XII .
Group Cultural and Social Initiatives
Within the framework of the Group's corporate responsibility strategy, the Cultural and Social Activities unit designs and
implements actions and initiatives for Society and Culture.
International initiatives - The Bank is the first in Greece that its CEO Mr. Ch. Megalou signed the UN Global Compact WEPs. In
addition, it was included for the 2
nd
consecutive year in the Bloomberg 2023 Gender Equality Index (“GEI”) among 484
companies worldwide.
Aligning its corporate responsibility strategy with key issues and strengthening its relations with society, the Bank has created
the EQUALL program, which focuses on three (3) pillars:
GENDER EQUALITY
-Women Founders and Makers - to strengthen female entrepreneurship
In collaboration with 100 mentors, two (2) new cycles were completed in 2023 and a total of 2,196 applications were submitted
for 200 vacancies. The 200 beneficiaries received a total of 76 hours of training.
-Women Back to Work - for women’s integration into the labor market
In collaboration with 100 mentors, two (2) new cycles were completed in 2023 and a total of 1,272 applications were submitted
for 200 vacancies. The 200 beneficiaries received a total of 64 hours of training.
Board of Directors' Report – 31 December 2023
41
-Women in Agriculture - for strengthening female rural entrepreneurship
In collaboration with 100 mentors, two (2) new cycles were completed in 2023 and a total of 491 applications were submitted
for 100 vacancies. The 100 beneficiaries received a total of 40 hours of training.
-Profession has no Gender - to raise awareness for gender stereotypes to the new generation
In collaboration with The Tipping Point, a total of 108 live group sessions were completed in 64 public schools across Greece
and 2,409 students benefited, from which 423 are primary school students.
-Piraeus EQUALL 360°
With social equality in mind, the Bank has created "Piraeus EQUALL 360°", a comprehensive bundle of products and services
exclusively for women entrepreneurs. Since its launch in April 2022, more than 330 women's businesses have already acquired
it.
- EQUALL opportunities for all - to support women survivors of gender-based violence
In collaboration with the Diotima Centre, the programme "EQUALL opportunities for all " was designed and implemented,
including personalized support sessions of psycho-educational professional counselling, upskilling, reskilling and preparation
for their integration in the labor market. The programme is offered to 25 survivors of gender-based violence with the aim of
strengthening their effort to escape abuse and acquire an independent and autonomous life.
NEW GENERATION
-SKILLS 4 ALL - for young people’s vocational training and integration into the labor market
In collaboration with Odyssea, the "SKILLS 4 ALL" program was designed and implemented, for the vocational training and
interconnection with the labor market of young people aged 17-34 from vulnerable groups. The training focuses on skills
acquisition for the tourism and construction industry and is offered to 100 beneficiaries for 2023.
-Experiential Learning Hubs - for students living in remote regions of Greece
In January 2023, the Bank, in collaboration with the Association "Together for Children", inaugurated the Experiential Learning
Hub at the 10th Primary School of Komotini. A state-of-the-art classroom specially equipped for teaching science through
experiential learning.
-TeenSkills - to enhance students' skills in remote areas of the country
In collaboration with The Tipping Point, the "TeenSkills" program was designed and implemented for high school students of
remote and inaccessible areas, namely Promachoi (Pella), Tzermiado (Lasithi Prefecture), Prinos Thassos (Kavala Prefecture)
and Korseon Fourni (Samos Prefecture). The programme focuses on cultivating horizontal and digital skills and connecting them
with professionals of different specialties and occupations regarding their academic choices and future professional career.
VULNERABLE SOCIAL GROUPS
-Refugee Women Academy - for the vocational training and integration of women refugees into the labor market
Following the Memorandum of Understanding with the United Nations High Commissioner for Refugees in Greece (“UNHCR”)
and the cooperation with Odyssea, the "Refugee Women Academy" was designed and implemented. The programme provides
refugee women with applied training and practical skills for the tourism industry, as well as targeted employability services,
enhancing their prospects for immediate employment and social inclusion.
Board of Directors' Report – 31 December 2023
42
-Programme of actions to strengthen the child protection system
Following their commitment bound by a Memorandum of Understanding, the Bank and the United Nations Children's Fund
("UNICEF") have designed and are implementing a programme to develop a single collaboration protocol for the child
protection services stakeholders and strengthen the capacity of state authorities to monitor child protection cases.
-Anagnorizo-Prostatevo (“Identify-Protect”) - training of kindergarten teachers for the prevention of child neglect and abuse
The Bank and ELIZA have designed and are implementing the programme “Anagnorizo-Prostatevo” (“Identify-Protect”), aiming
at training kindergarten teachers to prevent child neglect and abuse. During the 1
st
pilot phase, 1,650 kindergarten teachers
are expected to benefit and all preschool teachers in the country (approximately 16,500) are expected to benefit in the next
phase.
-BRAVE IN - return to productivity programme for the vocational rehabilitation of people with acquired brain injury
In collaboration with ELEPAP, the "BRAVE IN" programme was designed and implemented, aiming at the social and labor
reintegration of people with disabilities, who have acquired brain injury. It combines holistic neuropsychological intervention
with counselling of professional rehabilitation.
-EQUALL HOOPS - for the empowerment and inclusion of children and young people in the Autism Spectrum
In collaboration with Eurohoops, the "EQUALL HOOPS" programme was designed and is being implemented. A programme of
empowerment and inclusion of children and young people in the Autism Spectrum, as well as raising society's awareness about
neurodiversity, using basketball as a vehicle. "EQUALL HOOPS" includes Special Basketball Education training sessions with free
participation on a weekly basis, for 20 boys and girls aged 12 to 22.
Bank’s participation in International Fora
- Delphi Economic Forum VIII
Within the framework of Delphi, the Bank organized the side event "Towards a society of equal opportunities", in which
proposals were formulated to address key social issues such as gender equality and vulnerable groups (children, young people,
refugees, etc.). In addition, important findings were analyzed, and best practices and examples were highlighted.
- Global Refugee Forum 2023
The Bank participated, as a member of the official Greek delegation, in the second United Nations Global Refugee Forum, which
took place from 13 to 15 December in Geneva with the participation of 168 countries. The invitation for the Bank's participation
in this important international event followed the Memorandum of Understanding signed on April 20, 2023, between the Bank
and UNHCR in Greece and the kick-off of the first “Refugee Women Academy” in Greece.
Corporate Responsibility Actions for the dissemination and promotion of Culture
-Piraeus Culture and Creativity 360°
A comprehensive bundle of products and services, specially designed for Art and Culture SMEs. Since its launch in May 2021,
at least 209 companies of the Creative Economy have acquired it.
-Programme "Days of Remembrance of Hellenism 1922-1924" for the 100 years since the Asia Minor Catastrophe
Within the framework of this programme, the Bank designed and implemented:
Board of Directors' Report – 31 December 2023
43
• Publication "Mosaic of the Rural Rehabilitation of Refugees 1922” in collaboration with the Aristotle University of
Thessaloniki.
• Documentary as a tribute to the Asia Minor Catastrophe with historical data and testimonies of rural refugees for
their rehabilitation in Northern Greece.
• Exhibition "From Greater to Contemporary Greece (Part II): The Refugees” and publication of an album in
collaboration with the Historical and Ethnological Society of Greece-National Historical Museum.
• Digital exhibition and album for the Asia Minor Refugees of Corfu by the Corfu Reading Society.
Museum Network of the Group Cultural Foundation - Pillar of development for the regions of Greece
The Group’s Cultural Foundation has created and is operating a network of nine (9) thematic museums in various regio ns of
Greece, contributing to the economic growth and prosperity of the country. It promotes the tangible and intangible cultural
heritage of the country and through it the developmental dimension of culture and the formation of relationships of trust at
the local level. At the same time, it undertakes initiatives to increase jobs and create business opportunities for residents of
the regions.
The Museums of the Foundation function as cultural hubs in the areas where they are located, acting as pillars of both
qualitative and quantitative empowerment of local societies. A study carried out by the Foundation for Economic and Industria l
Research in 2019 on the economic and social impact of the operation of Piraeus Group Cultural Foundation (“PIOP”) Museums
on local communities, calculated an increase in tourism expenditure in the respective regions of the country by € 11.8 million
and an impact of museum activity on the country's GDP by € 23 million (conservative estimate). These figures are directly
proportional to the number of visitors to the Museums.
The return to “normality” and the organization of various actions and exhibitions at the Museums of PIOP contributed to a
significant increase in visitor numbers, as well as revenues, paving the way for a gradual "return" to the figures of the pre-
pandemic years. In 2023, emphasis was given to the exhibitions on the centennial of the Asia Minor Catastrophe (an
anniversary to which the Hellenic Ministry of Culture and Sports has given a three-year duration 2022-2024) at The Rooftile
and Brickworks Museum in Volos and the Museum of Industrial Olive-Oil Production of Lesvos, as well as exhibitions and
activities related to the thematics of the Museums of PIOP. The two (2) extreme weather phenomena Daniel and Elias that
affected Thessaly in September, caused severe damages to The Rooftile and Brickworks Museum in Volos. PIOP and the Bank
have committed to the complete restoration of the Museum and its reopening in 2024.
Related Party Disclosures
With reference to the transactions of the Group with related parties, such as members of the BoD and the management of the
Group and its subsidiaries, with the Group’s subsidiaries, associates, and joint ventures, these were conducted in usual mark et
terms and within the normal course of business and were not material in 2023. Detailed information is included in the 2023
annual financial statements in Note 46, which is incorporated herein by reference.
Group Risk Management ("GRM”)
RM is a core function of the Group, targeting to an effective and efficient identification, management, monitoring and reporting
of risks. Through the Risk and Capital Strategy and the individual RM Policies (Risk) as well as relevant methodologies and
procedures, the principles of an integrated RM framework are defined in order to support the achievement of the Group's
strategic and business objectives, as defined by the BoD.
Board of Directors' Report – 31 December 2023
44
The RM function is not limited to the activities of the GRM and the Chief Risk Of ficer (“CRO”) but refers to the processes
performed by all 3 LoD, based on the assigned responsibilities, in the context of an enhanced RM.
The Group has established policies, procedures, and adequate mechanisms for RM, at the level of all 3 LoD, in order to identify,
manage, monitor and report risks. The procedures in place promote the independence of risk-taking, RM and control activities.
The broader RM framework at Group level is constantly evolving, taking into account the current economic environment,
strategic and business plans, the Bank's historical data, market dynamics, supervisory and regulatory requirements, the Group's
Corporate Governance framework, international best practices and shareholder interests.
In this context, the key driving principles of GRM are described below:
▪
Strategically manage capital and liquidity;
▪
Enhance RM capabilities;
▪
Continuous enhancement of risk governance and control framework;
▪
Shape and maintain a strong Risk Culture.
During 2023, GRM continued strengthening the Group’s RM framework which interacts with the Group planning processes in
alignment with the in force regulatory framework, the supervisory expectations and the strategic guidelines.
Indicatively, for 2023 key risk strategic and functional objectives include:
✓
Early warning system (“EWS”) development for the efficient performing loan portfolio management;
✓
ECB roadmap on climate-related and environmental risks, including Climate Stress testing;
✓
Compliance with Guidance on Loan Origination and Monitoring;
✓
Credit risk models calibration based on the EBA New Definition of Default;
✓
Value at Risk (“VaR”) metho dologies enhancements;
✓
Liquidity RM framework and Stress Testing enhancements (including ILAAP & Resolution);
✓
Interest Rate Risk in the Banking Book (“IRRBB”) initiatives;
✓
Completion of risk models validation assessments aiming at the timely use of new or updated models in alignment
with the regulatory requirements;
✓
Operational risk (“OR”) framework and control enhancement.
Additionally, being in constant vigilance on market developments, the Group monitors and manages the exposure to interest
rate and market risk due to the changes in interest rates on the fair value of fixed rate debt securities. In order to mitigate its
interest rate risk the Group enters into Interest Rate Swaps (“IRSs”), consistent with the Group’s overall interest rate RM
strategy (incorporated herein by reference to Note 4.11 of the annual financial statements for the year 2023).
Moreover, the Group faces, amongst others, market and liquidity risks incorporated herein by reference to Notes 4.9 and 4.12
of the year 2023 Financial Statements.
Board of Directors' Report – 31 December 2023
45
Key Committees with GRM participation
Board Committees
▪
Risk Committee
▪
Audit Committee
Executive Committees
▪
Executive Committee
▪
ALCO
▪
Provisioning Committee
▪
Resolution Planning Committee
▪
Resolution Committee
▪
OR Committee
▪
Senior Credit Committee, Recovery Credit Committee and other Credit Committees
▪
Group Planning & Monitoring Committee
▪
ESG & Corporate Responsibility Committee
▪
Data Governance Committee
▪
Whistle Blowing Committee
▪
Risk Models Oversight Committee
▪
RE Committee
▪
Project Proteus Steering Committee
The GRM reports to the CRO, with main responsibilities per function as briefly described below:
CRO’s office | Function main responsibilities:
▪
The function is responsible to support the CRO in various activities and manage, coordinate, advise on and monitor
various risk initiatives and projects and consolidate overall view on figures, responses, alignment of stakeholders.
Additionally, it undertakes and coordinates the support of the CRO in its capacity as the Executive Secretary of the
BoD Risk Committee.
Credit Risk Management | Function main responsibilities:
▪
Credit RM engages in the early recognition, measurement, monitoring and reporting aiming at an effective
management of Credit Risk through an integrated framework of policies, methodologies, procedures and systems that
allow for the development of a profitable loan portfolio within the acceptable risk profile.
▪
It has the responsibility for the planning, specialization and implementation of credit risk strategy and policies. It uses
the appropriate methods, including the use of models for the provision, acknowledgement, measurement and
monitoring of the said risks aiming at the above-mentioned. Additionally, it has the responsibility for the provision of
information regarding the evolution of the said risks to the responsible Committees and Group Management on a
regular basis.
Several tasks and projects were deployed during 2023 to facilitate and enhance RM practices as presented in Table 1.
Board of Directors' Report – 31 December 2023
46
Capital Management, Risk Strategy & ESG Risks, Market, Liquidity & Asset Liability Management (“ALM”) Risks
| Function main responsibilities:
▪
Capital Management, Risk Strategy, Market, Liquidity & ALM Risks unit supports the development and implementation
of the Group’s Strategy, aiming at the effective management of risks and balance sheet optimization. To this end, the
unit is responsible for the development and maintenance of the RID and the Risk and Capital Strategy, including the
Risk Appetite Framework (“RAF”) of the Group, in accordance with the Risk Committee and BoD’s directions and
guidance;
▪
Additionally, the establishment of the dedicated unit (ESG Risks unit) aims at the integration of ESG Risks into Group’s
strategy, operations, processes and RM framework;
▪
Moreover, it is responsible for the design and implementation of the Group’s ICAAP and leads the preparation and
execution of regular enterprise-wide stress tests. Further, it is responsible for the coordination and overall
maintenance of the Group’s Recov ery Plan;
▪
Also, the function is responsible for the measurement, monitoring and reporting of capital requirements and capital
adequacy ratios of the Group;
▪
The function is responsible for the development of the RM framework (policies, methodologies, models and
processes) with respect to market, liquidity and ALM and other financial related risks. To that end, the unit deploys
proper methods, including models, that allow the identification, measurement and monitoring of the aforementioned
risks;
▪
Moreover, it is responsible for the design and implementation of the Group’s ILAAP and leads the preparation and
execution of regular enterprise-wide liquidity stress tests;
▪
Lastly, the function is responsible for the measurement, monitoring and reporting of liquidity supervisory
requirements and liquidity regulatory ratios of the Group.
During the current reporting period, Capital Management, Risk Strategy & ESG Risks, Market, Liquidity & ALM Risks unit has
undertaken a number of strategic risk initiatives, as presented in Table 1.
Group Control and Risk Data & Solutions | Function main responsibilities:
▪
Group Control and Risk Data & Solutions unit is responsible for the identification, assessment, monitoring, and
reporting of OR arising from the Group's activities, through the development, implementation and evaluation of an
adequate Internal Control Syst em (“ICS”), in order to ensure the safe and efficient operations of the Group and the
achievement of its business objectives. Also, the unit is collaborating with Segment Controllers to accomplish its
mission;
▪
It is responsible for the development, implementation, assurance and supervision of the Operational Risk
Management Framework (“ORMF”) and the ICS Framework of the Group, with the aim to defend the business
objectives and limit the risks undertaken to the acceptable levels defined by the Management;
▪
It contributes to the mitigation of risks arising from potential limitations in the development, or use of the Bank’s
models (model risk), by developing/ maintaining and implementing a Model Validation Framework and by contacting
independent validations re garding the robustness, accuracy and effectiveness of the Bank’s models, while
contributing to the improvement of models’ quality;
▪
Additionally, it has the responsibility for the planning and implementation of independent, ex post/ post approval,
regular, qualitative and quantitative review of the application of the approved financing policies and approval
procedures, as well as the provisions and write-offs policies, within the framework of the 2
nd
LoD, on the loan portfolio
of the Group, including the Performing and Non-Performing loans as well as the Factoring and Leasing subsidiaries;
Board of Directors' Report – 31 December 2023
47
▪
Finally, the function contributes in supporting, coordinating, initiating and implementing initiatives in the domain of
the risk data management, with the use of risk data analytics and business intelligence tools and methodologies, in
compliance with the Group’s Policies, the regulatory framework and the industry’s best practices.
During 2023, Group Control and Risk Data & Solutions has led in a number of strategic and functional risk initiatives, as
presented in Table 1.
TABLE 1 – KEY INITIATIVES for 2023
Board of Directors' Report – 31 December 2023
48
Function
Key initiatives
Credit RM
▪
Development of the Active Loan Portfolio Management and Rebalancing of Risk/ Return
methodology;
▪
Design of asset quality indicators under the supervisory guidelines of Loan Origination
framework;
▪
Enhanced automation and efficiency improvements in Credit Risk monitoring to aid decision
making;
▪
Revision of the Model Management and Governance Framework (“MMGF”) to reflect regulatory
expectations and introduction of the Model Development Policy;
▪
Revision of the credit rating assessment models, incorporating the new Definition of Default;
▪
Development of Energy Performance Certificate (“EPC”) rating models a nd Gross Value Added
(“GVA”) macro models to support the ESG program;
▪
Calibration and system implementation of rating model for the RE portfolio;
▪
Development of methodology and system implementation for the incorporation of Climate risk
impact into the Corporate Rating models;
▪
Updates on International Financial Reporting Standard (“IFRS”) 9 model infrastructure: revised
measurements on Credit Conversion Factor (“CCF”) and Loss Given Default (“LGD”) components;
▪
Optimization of ECL calculation engine’s functi onalities;
▪
Active participation in the On-Site Inspection on the Commercial RE Portfolio supporting Bank’s
approaches;
▪
Led the credit risk stream of the EBA Stress Test 2023.
Board of Directors' Report – 31 December 2023
49
Capital
Management, Risk
Strategy & ESG
Risks
▪
Further strengthening of RAF by introducing additional metrics and alternative calibration
methodologies, reflecting the evolving Group’s strategic aspirations and risk profile;
▪
Further integration of Climate & Environmental Risks into the RM framework and active
participation in the regulatory dialogue;
▪
EBA Stress Test 2023 execution – successful submission of all cycles of the EBA 2023 Stress Test,
with significantly improved results versus prior EU Wide Stress Test, leading to a reduction in
the Group’s P2G by 50 bps;
▪
ICAAP 2022 execution and submission – addressing all previous ICAAP SREP findings;
▪
Transition to an updated version of the Risk Authority capital requirements calculation engine,
in preparation of the upcoming Basel IV regulatory framework;
▪
Initialization of a dedicated project to enhance the governance framework of securitization
transactions, by recording all relevant processes and procedures, as well as by strengthening
control points across processes involving capital management;
▪
Initialization of a project that aims to fully automate the replenishment process connected to
synthetic securitization transactions, targeting the maximization of the capital relief stemming
from outstanding and future transactions;
▪
Submission of the 2023 Annual update of the Group Recovery Plan;
▪
Initialization of an extensive programme to cover the new prudential requirements framework
for credit risk, credit valuation adjustment risk, OR, market risk and the output floor (CRR III/CR D
VI or “banking package”);
▪
Incorporation of C&E risks into Group’s strategy, governance, RM framework, policies and
processes to comply with the SSM December 2023 deadline;
▪
Preparation for the EBA One-off Fit-for-55 climate risk scenario analysis;
▪
First time submission of Short-Term Exercise (“STE”) package (SREP 2023) and Pillar 3 disclosures
on Climate and ESG risks.
Market Liquidity
and ALM Risks
▪
Liquidity RM framework and Stress Testing Framework enhancements (including ILAAP &
Resolution);
▪
Fulfilment and submission of Deliverables under SRB Resolution Framework’s “Liquidity in
Resolution 2023 Priorities”;
▪
Completion of Liquidity on Site Inspection on Liquidity Management;
▪
VaR enhancements to accommodate commodity swaps and Credit VaR model assessed by the
model validation unit;
▪
Initiate a profit & loss attribution process based on Murex’s module;
▪
Recalibration and enchantment of behavioral models for IRRBB purposes;
▪
Initiation of project with the scope to facilitate the newly introduced Common Reporting
Framework (“COREP”) in IRRBB;
▪
Update of the methodologies and assumptions adopted for the quantification of interest rate
risk and the policies governing the overall measurement and monitoring thereof, to ensure
compliance with the latest regulatory framework, as outlined in the EBA GL/2022/14 guidelines.
Board of Directors' Report – 31 December 2023
50
Function
Key initiatives
Group Control and
Risk Data &
Solutions
▪
Enhancement and optimization of the ICS across the 3 LoD, aiming at the same time to achieve
further alignment (3 LoD alignment & efficiencies project);
▪
Enhancement of Information and Communication Technology (“ICT”) risk management in
second LoD;
▪
Implementation of a platform within the OR system for the management of internal control
deficiencies in the ICS, across the Group;
▪
Εnhancement of VaR methodology and procedures;
▪
Εnhancement of the risk and control assessment methodologies and procedures;
▪
Completion of the migration of quarterly follow-up of model validation findings to Open Pages
platform of OR resulting in the enhancement of findings management effectiveness;
▪
Contribution to RM enhancement through the validation of new or updated models, such as
the revised Macro Probability of Default (“PD”) models, the interest rate risk model for non-
maturity deposits, as well as the climate risk incorporation methodology into business
portfolio’s PDs;
▪
Contribution to the EBA Stress Test 2023 requirements through the validation of credit risk
models, including the new sectoral and inflation macroeconomic models. Enhancement on
infrastructure tasks with emphasis on improving policies and procedures of Credit Control;
▪
Enhancement of Credit Control framework through the design and implementation of a new
evaluation scale (1-4) for its credit reviews;
▪
Initiation of the design of Credit Process Analytics for a risk-based reporting facilitating
automated controls and identification of material findings, to be utilized by first and second
LoD functions;
▪
Initiation of a Senior Credit Committee’s Charter implementation review (new six-monthly) in
terms of presence, accuracy and management of information provided for decision-making;
▪
Coordination and guidance to the GRM units with regards to determining their risk data
requirements, data definitions, modelling and data availability, as well as Data quality
management.
Prospects and challenges of the Group’s Operations in 2024
In 2023, the global economy moved amidst a challenging macroeconomic environment with geopolitical turbulence triggered
by the onset of the Middle East conflict and the continued impact of the Ukraine invasion. However, with energy prices de-
escalating, the supply chains in Europe normalizing and with the lifting of the remaining coronavirus restrictions, the economic
environment showed resilience.
The Greek economy continued to grow, largely driven by increasing foreign and domestic investments, strong tourism, strong
exports and the implementation of the RRP, as Greece has managed to secure an equivalent of 17% of its GDP in grants and
loans from the EU, with 41% being already disbursed. Further, the Greek sovereign credit rating upgrade to investment grade
status after more than a decade, the prudent fiscal policy and the decreasing government deficit, and the consistent
implementation of structural reforms, have created a favorable environment to attract significant foreign investments.
Board of Directors' Report – 31 December 2023
51
Being the Bank with the largest footprint in the Greek economy, Piraeus Bank has benefited from the economic environment,
continuing to create value for the economy and the society at large. Equipped with ample liquidity, a strengthened balance
sheet and adequate capital buffers, the Bank stands ready to finance Greece’s path to sustainable growth and create value for
its shareholders.
In parallel, 2023 has been challenging, with Greece facing climate disasters such as the one with flood-stricken Thessaly. The
consequences of the climate crisis will be stressing the business models of companies, as well as the resilience of households,
thus sustainable, data-driven and proactive management of such risks is imperative.
Capitalizing on its 2023 performance, Piraeus Group, announced in mid-February 2024, its new financial targets for the period
2024-2026. The key elements comprise net recurring profitability of approximately € 1 billion per year for 2024-2026, further
growth of CET1 ratio to approximately 15% in 2026, expansion of performing loans by at least 5% per year, and NPEs ratio of
approximately 2.5% in 2026.
The geopolitical challenges, the energy market conditions, the technological developments that open a whole new area of
opportunities and threats, the climate crisis and the emerging societal shifts, remain the medium to long-term challenges for
the banking sector and the Group.
For the short-term, Greece’s macroeconomic performance and its resulting effects, the continuation of long needed structural
reforms, the tacking of inflation mainly arising from food prices and, most importantly, the monetary policy’s tightening pace
and interest rates trajectory with their impact to credit demand, banking products pricing and NPE inflows, are the key areas
of focus.
Athens, 27 February 2024
On behalf of the Board of Directors
George P. Handjinicolaou Christos I. Megalou
Non-Excecutive Chairman of BoD Managing Director (CEO)
Executive BoD Member
Board of Directors' Report – 31 December 2023
52
CORPORATE GOVERNANCE STATEMENT
This Corporate Governance Statement of Piraeus Financial Holdings S.A. forms part of the Board of Directors’ Report and
contains the information required by articles 152 and 153 of Greek Law 4548/2018 as at the reporting date of 31 December
2023 and the subsequent period up to the publication date of the Annual Financial Report.
2023 Overview
The Company’s BoD ensures that an appropriate governance framework and respective control mechanisms are in place so
that the Company may deliver its ambitious strategic plans while the business is, at all times, resilient and sustainable in the
face of a rapidly changing and challenging environment.
During 2023 and until the publication of the present, the Company has, inter alia:
• Ensured the smooth (re)election of the BoD, in light of the expiration of the BoD’s term in mid June 2023, and revised
the Directors’ Suitability Policy;
• revised its Directors’ Remuneration Policy and adopted a Free Distribution of Own Shares Plan and a Stock Options
Plan;
• focused on ESG issues, working closely with the BoD Ethics and ESG Committee;
• engaged with stakeholders in order to enhance trust and transparency and to better understand their views and
concerns.
The main corporate governance goals for the following period include:
• ensuring implementation of an effective succession planning process for the BoD;
• ⁠the increase of our organisational investments in data quality, integrity, and completeness, associated with enhancing
further the Group’s business, new regulatory reporting requirements and controls across the three lines of defence;
• ⁠deepening the focus of our compliance function on strategic issues and further upgrading its risk assessment
methodology;
• ⁠For risk management, further investing in incorporating more accurately forward climate and environmental risks in
the credit granting process.
APPLICATION OF INSTITUTIONAL FRAMEWORK AND CORPORATE GOVERNANCE STRUCTURE AND OPERATING
REGULATIONS
The Company, in its capacity as a Société Anonyme listed on the Athens Stock Exchange, in parallel with the provisions of
corporate law and its Articles of Association, applies the provisions set out in Greek Law 4706/2020 on corporate governance
of sociétés anonymes.
Board of Directors' Report – 31 December 2023
53
In compliance with the provisions of art. 17 of said law, the Company has adopted by a Board resolution, the Hellenic Corporate
Governance Code, issued in June 2021 by the Hellenic Corporate Governance Council and complies with its provisions.
It is noted that the Company, as a financial holding company, authorized as such and supervised by the ECB, applies on a
consolidated basis the special provisions of Greek Law 4261/2014 and of the respective framework.
Furthermore, the Company has drawn up and applies its Internal Regulation. The Internal Regulation incorporates the
provisions and practices arising from the mandatory institutional framework (especially Greek Law 4706/2020 on corporate
governance, Greek Law 4548/2018 o n Sociétés Anonymes, Greek Law 4261/2014 “Access to the activity of credit institutions
and prudential supervision of credit institutions (transposition of Directive 2013/36/EU), repeal of Law 3601/2007, and other
provisions”).
The main objectives of the Internal Regulation are to:
i)
ensure transparency, integrity, functionality and efficiency of the existing system of the Company's corporate governance
and ICS;
ii)
enhance confidence in the Company for domestic and foreign investors, shareholders, employees and customers;
iii)
ensure the Company's continued compliance with the Greek Laws and regulations governing its organization and operation
and its activities;
iv)
develop a self-regulating framework within the Company by establishing rules for its administration, management and staff,
which complement the provisions of the existing regulatory framework and are being established with a view to enhancing
the Company's sound and responsible management and operations.
The organisational structure of the Company complies with the current principles of the institutional framework governing the
operation of listed companies and it is structured in such a way that it meets the needs of the key business sectors in which it
operates. Ensuring an effective organizational structure with a clear definition of the competencies and areas of accountability
of each administrative unit of the Company, constitutes the basis upon which the functions and operations of the Company
are founded. Particular emphasis is given to the setting up of a clear organizational structure with distinct, transparent and
consistent lines of responsibility, the establishment of efficient and detailed procedures for conducting the Company's
operations and of adequate control mechanisms in respect of such procedures, as well as to the identification, management,
monitoring and reporting risks which the Company assumes or may undertake within the framework of its activities.
The Company has developed and aims at continuously improving the ICS, both on a stand alone as well as on a Group level.
The ICS consists of well-documented, detailed control mechanisms and procedures, incorporating best practices of corporate
governance and covering on a continuous basis every activity and transaction of the Company, contributing to its efficient and
safe operation.
Moreover, in the context of being subject to the provisions of Greek Law 3864/2010, as same has been amended in mid-2022,
the Company follows a number of temporary corporate governance practices unique to the Greek banking system, including
the presence of an HFSF Representative on the BoD. Further details are outlined in the relevant sections of this Statement
relating to HFSF's role with the Company and the Bank.
Board of Directors' Report – 31 December 2023
54
I.
MANAGEMENT, ADMINISTRATIVE AND SUPERVISORY BODIES AND COMMITTEES
1. GM of Shareholders
Regarding the shareholders of the Company, as well as the convocation and meeting of shareholder’s GM, according to the
provisions of Greek Law 4548/2018 "Reform of the law of sociétés anonymes", the following are applicable:
1.1. Shareholder
The Shareholders exercise their rights through their participation at the GM. GM resolutions, adopted as prescribed by law,
are also binding on absent or dissenting shareholders. The shareholder status is verified through the direct electronic linkup of
the Company with the records of the Decentralized Securities System (“DSS”).
In case of shares held in omnibus accounts, the capacity of the shareholder vis-à-vis the Company is evidenced through the
registration of the shareholder in the books of the intermediary holding the omnibus account, in line with the legislative
provisions (L. 4548/2018, L. 4706/2020 and Regulation (EU) 2018/1212) as well as the Rulebook of the Hellenic Central
Securities Depository.
1.2. Shareholder structure
The Company’s shareholder structure presents great diversity. The total number of the Company’s common shareholders was
approximately 18,900 in December 2023. The HFSF held 27% of the outstanding common shares (1,250,367,223 of a nominal
value € 0.93 each). The remaining 73% is held by the private sector; circa 19% by Paulson & Co, circa 9% by Helikon Investments,
circa 39% by legal entities and circa 6% by individuals. Strong international presence is evidenced by the fact that significant
part of free float is held by foreign institutional investors.
In December 2023 the Company held directly 3,975,419 own shares, representing 0.32% of the share capital of the Company.
The shareholder structure of the Company (for descriptive, non-regulatory purposes) was as follows in December 202 3:
Board of Directors' Report – 31 December 2023
55
Shareholder Structure- December 2023
(1) Based on the information received from the investor, for which the investment community was informed by the
Company on 12 May 2021, through relevant corporate announcement (available here).
(2) Based on the information received from the investor, for which the investment community was informed by the
Company on 12 May 2021, through relevant corporate announcement (available here).
(3) (3) Based on the information received from the investor, for which the investment community was informed by the
Company on 11 August 2022, through relevant corporate announcement (available here).
1.3. Categories of GMs
The GM mandatorily convenes at the Company’s seat or in another municipality within the county of the seat or another
neighboring municipality or in the municipality of the Athens Stock Exchange seat, at least once every financial year and within
the time limit laid down by the provisions of the Law, as in force. Extraordinary sessions may also be called by:
a) the BoD, whenever so deemed advisable or necessary;
b) requisition of minority shareholders pursuant to paragraph 1 of article 141 of law 4548/2018 (for more information see
section 1.8 below);
c) the auditor of the Company upon request to the Chairman of the BoD.
1.4. Competences of the GM
According to article 117 of law 4548/2018, the GM has solely the authority to decide on:
• Amendments to Company’s articles of association, Share capital increases and reductions are being understood as
amendments thereto;
Board of Directors' Report – 31 December 2023
56
• Election of members of the BoD and auditors;
• Approval of the overall management activities according to article 108 of Law 4548/2018 and discharge of auditors;
• Approval of the annual and any consolidated financial statements;
• Distribution of the annual profits;
• Approval of remuneration paid and preliminary approval for remuneration, under article 109 of law 4548/2018;
• Approval of the remuneration policy and the remuneration report under articles 110 and 112 of law 4548/2018;
• Merger, split, conversion, revival, term extension or dissolution of the Company, according to law 4548/2018 and law
4601/2019, as in force;
• Appointment of liquidators.
It is noted that not coming under the provisions of the preceding paragraph are the following:
• Share capital increases or share capital readjustment acts explicitly vested in the BoD under the law, as well as
increases imposed under the provisions of other legislation;
• The amendment or harmonization of provisions in the articles of association by the BoD when so explicitly provided
by law;
• The election of directors in the place of directors who resigned, died or forfeited their office in any other manner, in
accordance with the article 82 of law 4548/2018;
• The option to distribute interim dividends pursuant to paragraphs 1 and 2 of art. 162 of Law 4548/2018;
• The option to distribute (under para. 3 of art. 162 of law 4548/2018) profits or voluntary reserves within the current
business year under a BoD resolution which is submitted to the publication formalities.
1.5. Invitation of GM
The invitation of the GM containing the minimum information required by law (including, inter alia, the date, place, time,
agenda, instructions for shareholders’ participation and rights) is published twenty (20) clear days minimum prior to the dat e
appointed for its session in the Company Record in the General Commercial Register (business registry) as well as at the
Company’ s website. It is also communicated within the said time period in a manner ensuring fast and non-discriminatory
access to it, by means of media which are reasonably reliable for the effective dissemination of the relevant information to
investors.
Every shareholder has the right to receive, upon request, personal notification by e-mail about impending GM sessions ten (10)
days minimum prior to the appointed day for the GM session.
Board of Directors' Report – 31 December 2023
57
1.6. Participation at the GM
Shareholders having the right to participate and vote in the GM (and the iterative) are those registered at the opening of th e
fifth (5) day prior to the date of the GM (Record Date). The said date of record is also applicable in the case of an adjourned or
iterative session, provided such adjourned or iterative session is not more than thirty (30) days from the date of record. If this
is not the case, or if in the case of an iterative GM a new notice is published, persons having shareholder status as at the start
of the third (3) day prior to the day of the adjourned or reiterative GM session may participate at the GM.
The BoD may resolve, in accordance with the articles of association and under the conditions of the law, as in force, that:
• the GM will not convene at any place but will convene in full with the participation of the shareholders remotely by
electronic means;
• any shareholder may participate in voting on items on the agenda of the GM at a distance by e-mail or by electronic
means, the vote held before the meeting.
Shareholders may participate at the GM in person or by proxy. A shareholder may appoint a proxy for a single or multiple GM
sessions and for a specified period. The proxy votes in accordance with the shareholder’s instructions, if any. A shareholder
may appoint up to three (3) proxies. The appointment of proxy may be freely revoked. The appointment and recall or
substitution of a proxy or representative shall be made in writing or by e-mail message or other electronic means and shall be
submitted to the Company forty-eight (48) hours minimum prior to the date appointed for the GM.
1.7. Quorum and majority at the GM
The GM is in quorum and validly held on the agenda when at least one fifth (1/5) of the paid-in share capital is present or
represented thereat.
Qualified quorum of ½ of the paid-in share capital is required in the case of resolutions concerning a change of the nationality,
a change of the business object, increase of shareholders’ obligations, ordinary increase of share capital unless imposed und er
the law or effected by means of capitalization of reserves, share capital reduction except when it is in accordance with para. 5
of article 21 of law 4548/2018 or para. 6 of article 49 of law 4548/2018, a change in the manner of appropriation of profits,
merger, split, conversion, revival, term extension or dissolution of the Company, the granting or renewal of power to the BoD
for share capital increase, pursuant to para. 1 of art. 24 of law 4548/2018, as well as in all other cases in which the law specifies
that the GM shall adopt resolutions under a qualified quorum and majority.
Required quorum and majority in first and iterative sessions is depicted below:
Board of Directors' Report – 31 December 2023
58
Quorum
First GM
Iterative session
Ordinary quorum
At least 20% of the paid-in share capital
One share
Qualified quorum
At least 50% of the paid-in share capital
At least 20%
Majority
First GM
Iterative session
Simple majority
At least 50% of votes represented +1 share
At least 50% +1 share
Qualified majority
At least 66.67% of votes represented
At least 66.67%
1.8. Minority Rights
According to law 4548/2018 and subject to the conditions and the deadlines prescribed by it:
Shareholders representing at least one-twentieth (1/20) of the paid-in share capital of the Company have the right to:
• call an extraordinary GM session (specifying the items of the agenda) and set a date for it not being more than forty-
five (45) days from the date such requisition was submitted to the chairman of the BoD;
• include additional items in the agenda of the GM, already convened;
• submit draft resolutions on items included in the original or any revised agenda of the GM;
• request the Chairman of the GM to adjourn, but only once, the adoption of resolutions on all or some of the agenda
items by the GM and fix a new session for deciding on such resolutions, on the date mentioned in the shareholders’
requisition which may not, however, be later than twenty (20) days from the day of such adjournment;
• request the BoD to inform the Ordinary GM of the amounts which were paid during the last two-year period by the
Company to each member of the BoD or to the managers of the Company as well as of any benefit provided by the
Company to the above persons for any reason or contract existing between the Company and such persons;
• demand an open vote at the GM on any agenda item or items;
• request extraordinary judicial review, if there is suspicion of any action which is contrary to the provisions of law or
the articles of association of the Company or to resolutions adopted by the GM;
• submit in writing to the BoD a requisition about the exercise of Company of claims pursuant to article 103 of law
4548/2018;
• when forming part of a minority of at least one tenth (1/10) of the share capital of the Company that opposed the
adoption of the relevant resolution by the GM, apply to the competent court within two (2) months as of the GM
approval, requesting a decrease of compensation or benefit paid or decided to be paid to a specific member of the
BoD, with the exception of emolument to BoD members for services rendered to the Company under a special
relationship, when under the existing circumstances it is considered exorbitant as per sound judgment.
Board of Directors' Report – 31 December 2023
59
Shareholders representing at least one tenth (1/10) of the paid-in share capital of the Company have the right to:
• request the BoD to provide to the GM information with regard to the progress of the corporate affairs and the status
of the corporate property.
Shareholders representing at least one fifth (1/5) of the paid-in share capital of the Company have the right to:
• request judicial review if from the whole course of the Company’s affairs or in light of indications in this respect it may
validly be assumed that the management of these affairs is not exercised as dictated by the principles of sound and
prudent administration.
Any shareholder has the right to:
• request the BoD to provide to the GM specific information regarding the affairs of the Company insofar as such
information concerns the agenda items;
• receive, upon request, personal notification by e-mail about impending GM sessions ten (10) days minimum prior to
the appointed day for the GM session.
Detailed information on the GM and shareholders rights are available in the Comp any’s website (Information on Shareholders
General meeting and Shareholders’ Rights)
1.9. GMs of 2023
During 2023, one GM meeting was held. The Annual Ordinary GM, held on 27 June 2023, was conducted remotely in real-time
via teleconference and was attended either in person or by proxy, by shareholders representing 940,335,843 shares,
corresponding to 75.20% of the total 1,250,367,223 shares. All the items of the agenda were approved by the Ordinary GM of
Shareholders.
The said items were the following:
1. Submission and approval of the Annual Financial Report (Company and Group) for the financial year 01.01.2022 -
31.12.2022, including the annual financial statements, along with the relevant BoD Report and Statements as well as
the Independent Auditor’s Report;
2. Approval of the overall management for the financial year 01.01.2022 – 31.12.2022, according to article 108 of Law
4548/2018 and release of the certified auditors from any liability for the financial year 01.01.2022 – 31.12.2022
according to article 117 par.1 case (c) of Law 4548/2018;
3. Appointment of Certified Auditors for the financial year 01.01.2023 - 31.12.2023 and approval of their fees;
4. Submission of the annual Audit Committee’s Report to the GM pursuant to article 44 par. 1 case (i) of Law 4449/2017;
5. Submission of the Independent Non-Executive Directors’ Report to the GM, according to article 9 par.5 of Law
4706/2020;
6. Approval of remuneration paid to members of the BoD in respect of the financial year 2022 and approval of advance
Board of Directors' Report – 31 December 2023
60
payment of remuneration in respect of the financial year 2023 in accordance with article 109 of Law 4548/2018;
7. Submission of the Remuneration Report of the year 2022 for discussion and vote by the GM, according to article 112
of Law 4548/2018;
8. Election of a new BoD and appointment of independent non-executive members in accordance with the provisions of
Law 4706/2020;
9. Determination of the type of the Audit Committee, the term of office, the number and the qualifications of its
members as per article 44 par. 1 case b) of Law 4449/2017;
10. Approval of amendment of the Directors’ Suitability Policy;
11. Approval of amendment of the Directors’ Remuneration Policy;
12. Granting of free common shares to executives and employees of the Company and affiliated entities within the
meaning of article 32 of Law 4308/2014, in accordance with the provisions of articles 114 of Law 4548/2018. Relevant
authorizations to the BoD;
13. Approval for the acquisition of the Company’s own shares (Share buy-back Programme) and granting of relevant
authorizations to the BoD;
14. Approval of the offsetting of the Company’s “Share premium” account against the general ledger account 42
“Accumulated losses carried forward”, for the write-off of an equivalent amount of prior years’ losses according to
article 35 par. 3 of Law 4548/2018, as currently in force, and granting of relevant authorizations;
15. Granting of permission, as per article 98 par. 1 of Law 4548/2018, to the Members of the BoD and Managers of the
Company, to participate on the BoD or in the management of the Compan y’s subsidiaries and affiliates;
16. Miscellaneous announcements (non-voting item).
The resolutions adopted at the Ordinary GM of Shareholders held on 27 June 2023 and the voting results have been posted on
the Company’s website.
2. The Board of Directors
2.1 Composition
In accordance with article 8 of its Articles of Association, as in force today, the Company is managed by a BoD consisting of
nine (9) to fifteen (15) members. Pursuant to Greek Law 4706/2020, the Board consists of executive and non-executive
members. The number of the non-executive members should not be less than one third (1/3) of the total number of members.
Among the non-executive members, at least two (2) should be independent within the meaning of art.9 of the aforementioned
Greek Law. Pursuant to Greek Law 3864/2010, a Representative of the HFSF participates as a Member to the BoD. His
responsibilities are determined in Greek Law 3864/2010.
It is noted that according to the regulatory framework of the SSM of the ECB, each Member of the Board is subject to a fit-and-
proper assessment by the SSM for the position held.
Board of Directors' Report – 31 December 2023
61
The BoD is elected by the GM of the Shareholders of the Company, which also appoints the independent non-executive
members.
The HFSF’s Representative to the Company’s Board may be appointed by a respective written notice addressed to the Chairman
of the Board, following which the Board proceeds to all necessary actions according to the Company’s Articles of Association
and corporate law for the completion of this appointment, including the required notification to the General Assembly.
The term of office for the members of the Company's BoD is three years and is extended until the annual GM which convenes
following the expiry of their term. The current BoD was elected on the GM held on 27 June 2023 and consequently its term of
office expires on 27 June 2026, to be extended according to the aforementioned.
According to the Company’s Articles of Association, if a Board member resigns, passes away or forfeits his/her office in any
way, or whose office is declared forfeited by resolution of the BoD due to unjustified absence from meetings for three (3)
consecutive months, the Board may continue to manage and represent the Company without replacing the missing members
if the remaining members are at least nine (9). Pursuant to Law 4706/2020, in case of unjustified absence of an independent
member at least two (2) consecutive sessions of the BoD, the Board member is deemed to have resigned. Further provisions
on Board attendance requirements are also included in the Board Attendance Policy.
On the date of publication of the 2023 Annual Financial Report, the BoD is composed of the following thirteen (13-) members:
Board of Directors' Report – 31 December 2023
62
BOARD OF DIRECTORS
George Handjinicolaou
Chairman of the Board, Non-Executive BoD Member
Year of birth: 1953 Nationality: Greek
Member since: November 2016
Chairman since: November 2016
Karel De Boeck
Vice Chairman of the Board, Independent Non-Executive BoD Member, Senior
Independent Director
Year of birth: 1949 Nationality: Belgian
Member since: June 2016
Vice- Chairman since: February 2017
Senior Independent Director since: June 2021
Christos Megalou
CEO, Executive BoD Member
Year of birth: 1959 Nationality: Greek/ British
Member since: March 2017
Vassileios Koutentakis
Executive BoD Member
Year of birth: 1963 Nationality: Greek
Member since: May 2020
Venetia Kontogouris
Independent Non-Executive BoD Member
Year of birth: 1951 Nationality: Greek/ American
Member since: June 2017
Enrico Cucchiani
Independent Non-Executive BoD Member
Year of birth: 1950 Nationality: Italian
Member since: November 2016
David Hexter
Independent Non-Executive BoD Member
Year of birth: 1949 Nationality: British
Member since: January 2016
Solomon Berahas
Independent Non-Executive BoD Member
Year of birth: 1953 Nationality: Greek
Member since: November 2016
Independent Non- Executive BoD Member
Board of Directors' Report – 31 December 2023
63
Andrew Panzures
Year of birth: 1958 Nationality: British, Canadian, American
Member since: June 2020
Anne Weatherston
Independent Non-Executive BoD Member
Year of birth: 1956 Nationality: British
Member since: June 2020
Alexander Blades
Non-Executive BoD Member
Year of birth: 1970 Nationality: New Zealand
Member since: January 2016
Maria Semedalas
Independent Non-Executive BoD Member
Year of birth: 1961 Nationality: Greek, American
Member since: February 2024
Periklis Dontas
Non-Executive BoD Member, Representative of the HFSF to the BoD pursuant to Greek
Law 3864/2010
Year of birth: 1957 Nationality: Greek
Member since: December 2019
62% Independent Non-Executive
(including a Senior Independent
Director)
23% Non-Independent Non-
executive
15% Executive
During 2023, the following amendments took place in the composition of the BoD: Ms. Francesca Tondi, Independent Non-
Executive Member, resigned from the BoD on 17 November 2023.
During 2024 and until the date of publication of the Annual Financial Report the following amendments took place in the
composition of the BoD: Ms. Μaria Semedalas Independen t Non-Executive Member joined the BoD on 22 February 2024.
Ms. Lydia Papadopoulou serves as Corporate Secretary and Secretary of the BoD as from 23 February 2023, replacing Ms.
Pallikari Dimitra who has resigned. Mrs. Lydia Papadopoulou has been working with the Group since 2017 offering services in
relation to the ICS, in a series of projects regarding the strengthening of the relevant structures and systems, the 3 LoD, OR,
regulatory compliance etc. She has served in the past for a number of years as the Secretary of the Audit Committee and Risk
Committee, and as Internal Audit Senior Manager, at another systemic Bank, as well as an external auditor at the EY audit firm
in UK and in Greece. In recent years, she provided independent support services to Board Committees of Growthfund and since
2019 she is the Audit Committee Chair in two entities, independent of the Group. Ms. Papadopoulou has studied Mechanical
Engineering at the National Technical University of Athens (1997), Business Administration (MBA-Finance) at Imperial College
London (1998) and has received the professional certification of Chartered Auditor/ Accountant from the Institute of Chartere d
Accountants of England & Wales (2001).
Board of Directors' Report – 31 December 2023
64
Board Skills and Expertise
The BoD of the Company consists of members with international leadership expertise and knowhow and particularly in the
areas of banking restructurings and the reduction of non-performing loans. Moreover, the members of the Board possess in
depth knowledge and experience of the banking market, actively contribute to the improvement of the corporate governance
framework and are driving the respective required amendments whilst participating in the creative debates and the quest for
solutions to the challenges faced by the Company and the Group.
The members have the necessary collective skills and knowledge required by the existing regulatory framework for financial
holding companies. In this way, the systemic stability, the good relationship of the Company with the Regulatory Authorities
and the avoidance of administrative gaps in the operation of the Company and its Group are promoted.
Curriculum Vitaes for the members of the BoD are set out below and are also available on the Company’s website.
Board of Directors' Report – 31 December 2023
65
George P. Handjinicolaou, Chairman of
the BoD, Non-Executive Member
Mr. George Handjinicolaou is the Non-Executive Chairman of the BoD of Piraeus
Financial Holdings (and Piraeus Bank S.A.).
He is Chairman, Non-Executive Member of the BoD of ATHEXGroup and BoD
Member of the Hellenic Energy Exchange S.A. He is also Chairman of Piraeus
Bank Group Cultural Foundation and Vice President of the Executive Committee
of the Council of Competitiveness of Greece. He held the position of Deputy CEO
and Member of the BoD in International Swaps and Derivatives Association in
London for the period 2011-2016. He also held the positions of Vice Chairman,
Member of the Management Committee and the BoD of the Hellenic Capital
Market Commission from 2009 to 2010. In addition, Mr. Handjinicolaou held the
position of Managing Director, Global Head, Debt Emerging Markets and
Member of Global Markets Management Group at Merrill Lynch, New York.
Mr. Handjinicolaou holds a BSc in Economics from University of Athens, Law
School, Department of Economics (1975), an MBA in Finance (1978) from New
York University, Graduate School of Business Administration and a PhD in Finance
& Economics (1983) from New York University.
Karel G. De Boeck, Vice-Chairman,
Independent Non-Executive Member,
Senior Independent Director
Mr. Karel De Boeck is Vice Chairman, Independent Non–Executive Member and
Senior Independent Director of the BoD of Piraeus Financial Holdings (and
Piraeus Bank S.A.), as well as Chairman of the Risk Committee, Vice Chairman of
the Board Ethics & ESG Committee, Member of the Audit Committee and
Member of the Nomination Committee.
He is also a Board Member of LAMIFIL NV and Willemen Group NV/SA, Belgium,
as well as Independent Non-Executive BoD Member at Ghelamco Invest NV in
Belgium. He held the position of CEO at Dexia Group, at Dexia NV in Belgium, at
Dexia Credit Local S.A. in France, as well as at Fortis Group in Belgium.
Mr. De Boeck holds a Master’s Degree in Mechanical / Civil Electronic Engineering
(magna cum laude) from KUL in Belgium (1972) and a Master’s Degree in
Economics from KUL in Belgium (1974).
Board of Directors' Report – 31 December 2023
66
Christos I. Megalou, CEO, Executive
Member
Mr. Christos Megalou is an Executive Member of the BoD of Piraeus Financial
Holdings (and Piraeus Bank S.A.), CEO and Chairman of the Group Executive
Committee.
Mr. Megalou is Chairman of the BoD of Snappi S.A., A’ Vice Chairman of the BoD
of Association of S.A. and Entrepreneurship and BoD Member of the American-
Hellenic Chamber of Commerce. He is also, Non-Executive BoD Member of the
HBA, in which he held the position of Deputy Chairman between 2013 to 2015.
Also, he was elected, for two consecutive runs, Chairman of the HBA in the UK
(2010-2013). He is a distinguished fellow in Global Federation Competitiveness
Councils in Washington, D.C., USA and an Independent Non-Executive Board
Member of Safe Bulkers Inc.
Mr. Megalou graduated with a BSc in Economics from the Athens University of
Economics in 1981 and holds an MBA in Finance from Aston University in
Birmingham, UK (1982).
Vasileios D. Koutentakis, Executive
Member
Mr. Vasileios Koutentakis is an Executive Member of the BoD of Piraeus Financial
Holdings (and Piraeus Bank S.A.). He is a Member of the Group Executive
Committee, as well as an Executive General Manager, Chief Retail Banking in
Piraeus Bank since 2017.
He is a Member of the BoD of Snappi S.A. and of Piraeus Agency Solutions S.A.,
Member of the Executive Committee of the HBA, as well as a Member and HBA
Representative of Liquidity Council of Ministry of Finance and Chairman of
INSEAD NAA in Greece. Also, he is a Member of the BoD at Piraeus Bank Group
Cultural Foundation. He was a Board Member of VISA Hellas from 2004 until
2012.
Mr. Koutentakis holds a Diploma in Electrical Engineering from the National
Technical University of Athens (1987) and an MBA from INSEAD in Fontainebleau,
France (1990).
Board of Directors' Report – 31 December 2023
67
Venetia G. Kontogouris, Independent
Non-Executive Member
Mrs. Venetia Kontogouris is an Independent Non-Executive Member of the BoD
of Piraeus Financial Holdings (and Piraeus Bank S.A.), as well as a Member of the
Nomination Committee and Member of the Board Ethics & ESG Committee.
Also, she is a Member of the BoD at Kaizen Private Equity, as well as Founder and
Managing Director of Venkon Group, LLC. She was Co-Managing Director at
Trident from 1995 to 2011. Mrs. Kontogouris is a technology-focused venture
capitalist, with over 20 years of experience. She was responsible for overseeing
management and making key decisions in over 25 companies from the initial seed
invest to the exit strategy.
Mrs. Kontogouris holds a BA from the Northeastern University (1974) and an
MBA from the University of Chicago (1977).
Enrico Tommaso C. Cucchiani,
Independent Non-Executive Member
Mr. Enrico Tommaso Cucchiani is an Independent Non-Executive Member of the
BoD of Piraeus Financial Holdings (and Piraeus Bank S.A.), as well as Vice
Chairman of the Nomination Committee, Member of the Remuneration
Committee and Member the Board Ethics & ESG Committee.
Mr. Cucchiani holds the position of Non-Executive Vice Chairman of the Board of
IllyCaffe, as well as the position of Non-Executive Member of the Board,
Chairman of the Remuneration Committee and Member of the Risk Committee
of Terna SPA. He is also Vice Chairman/Lifetime Director of Javotte Bocconi
Foundation and Member of the BoD at Bocconi University, ISPI - Institute for
International Political Studies, and Weizmann Institute of Science.
He served as Non-Executive BoD Member of TGI-Think Global Investments, as
well as Member of the Board of RSA Insurance Group in London from 2014 to
2021 and held the position of Member of the Executive Board of Allianz Group
being responsible for all business activities in most of Europe, Latin America and
Africa. In addition, he served as Group CEO of Intesa Sanpaolo. Mr. Cucchiani was
appointed Cavaliere del Lavoro, the highest honorary title by the President of
Italy, as well as Bocconi Man of the Year in 2006.
He holds an MBA (Fullbright Fellow) from Stanford Graduate School of Business,
USA and a Dottore in Economia (PhD in Economics) from Bocconi University, Italy.
He has completed his Research Activity on Multinational Corporations at Harvard
Business School, UK.
Board of Directors' Report – 31 December 2023
68
David R. Hexter, Independent Non-
Executive Member
Mr. David Hexter is an Independent Non-Executive Member of the BoD of Piraeus
Financial Holdings (and Piraeus Bank S.A.), as well as Chairman of the Nomination
Committee, Member of the Audit Committee and Member of the Board Ethics &
ESG Committee.
He is an Independent Member of the Supervisory Board of Santander Bank Polska
and Non-Executive Chairman of the Supervisory Board of PENM (Private Equity
New Markets), Copenhagen.
Mr. Hexter held the position of Deputy Vice President of the Banking
Department, as well as Chairman of the Equity Investment Committee and
Member of the Operations Committee at the European Bank of Reconstruction
and Development (1996-2004).
Mr. Hexter holds an MA in Philosophy, Politics and Economics from Oxford
University (1970), an MBA from the Cranfield School of Management (1973), an
MPhil from Birkbeck, University of London (2011) and a PhD from London
University (2016).
Solomon A. Berahas, Independent
Non-Executive Member
Mr. Solomon Berahas is an Independent Non-Executive Member of the BoD of
Piraeus Financial Holdings (and Piraeus Bank S.A.), as well as Chairman of the
Board Ethics & ESG Committee, Vice Chairman of the Audit Committee and
Member of the Remuneration Committee. Mr. Berahas is Chairman and
Managing Director of the BoD of Tiresias S.A. Bank Information Systems in
Athens. He is also Vice Chairman of the BoD at the Piraeus Bank Group Cultural
Foundation, Member of the BoD at ELEPAP, Member at Association of S.A. and
Entrepreneurship and Independent Non-Executive Member at Safe Growth
Investments AIFLNP LTD.
Between 2006 to 2012, Mr. Berahas held the position of Vice Chairman of the
BoD of Eurobank Financial Planning Services.
Mr. Berahas holds a BSc in Industrial Engineering and Management (1976), an
MSc in Industrial Engineering and Management Information Systems (1978) and
a DSc in Operations Research from the Technion Israel Institute of Technology
(1981).
Board of Directors' Report – 31 December 2023
69
Andrew D. Panzures, Independent
Non-Executive Member
Mr. Andrew Panzures is an Independent Non-Executive Member of the BoD of
Piraeus Financial Holdings (and Piraeus Bank S.A.), as well as Chairman of the
Remuneration Committee, Member of the Nomination Committee and Member
of the Risk Committee.
Mr Panzures is a Board Member of Interaudi Bank USA/ Private Equity Investor
and served as Principal-Senior Portfolio Manager at Graham Capital Management
in the Global Multi Sector Macro-Graham Capital Management LLC (2011-2016).
Between 2009 through 2011, Mr. Panzures was Co-CIO and a Managing Partner
at Medley Macro Fund Management. From 2003 through to 2008, Mr. Panzures
held the position of Managing Director and CIO of the Americas-New York at
JPMorgan Chase.
Mr. Panzures graduated from Ontario Scholar in 1977 and from York Unive rsity’s
Schulich School of Business—BBA Finance in 1981.
Anne J. Weatherston, Independent
Non-Executive Member
Mrs. Anne Weatherston is an Independent Non-Executive Member of the BoD of
Piraeus Financial Holdings (and Piraeus Bank S.A.), as well as Chair of the Audit
Committee and Member of the Risk Committee.
Mrs. Weatherston is also a Board Member of ALBA Bank and a Board Member
and Chair of the Operations & Technology Committee at AIB UK. She held the
position of Board Member and Audit Chair of Mint Payments until April 2023.
Mrs. Weatherston was also Board Member of Archa Neo – Bank from 2018 to
2022, CIO at Bank of Ireland, Group CIO of Australia and New Zealand Banking
Group and Chief Transformation Officer & CIO at Energy Australia.
Mrs. Weatherston holds an MA in Archaeology from Glasgow University and an
MBA from Strathclyde University Business School. She has also completed a 4-
year Government scheme (UK program) in IT programming, is a graduate of the
Australian Institute of Directors and Chair mentoring programme and has
completed the Executive Leadership Training from Harvard & London Business
School.
Board of Directors' Report – 31 December 2023
70
Alexander Z. Blades, Non-Executive
Member
Mr. Alexander Blades is a Non-Executive Member of the BoD of Piraeus Financial
Holdings (and Piraeus Bank S.A.), as well as Member of the Risk Committee, the
Nomination Committee, the Remuneration Committee and the Board Ethics &
ESG Committee.
Mr. Blades is Member of the BoD of Snappi S.A. He is also a Partner at Paulson &
Co. Inc., New York since 2009, as well as a Member of the New York State Bar
Association and a barrister and solicitor of the High Court of New Zealand.
Mr. Blades holds a BA (1993) and LLB (Hons) (1994) from Victoria University of
Wellington and an LLM from the University of Chicago (1997).
Maria I. Semedalas, Independent Non-
Executive Member
Mrs Maria Semedalas is an Independent Non - Executive Member of the BoD of
Piraeus Financial Holdings (and Piraeus Bank S.A.), as well as a Member of the
Board Ethics & ESG Committee, Remuneration Committee, Audit Committee and
Risk Committee.
She is also Member of the Board of Trustees and Honorary Treasurer at the
Quintin Hogg Trust in London.
Mrs Semedalas held the positions of International Head of Third Party
Governance and Chief Administrative Officer International Finance at ΒΝΥ Mellon
in London from 2016 to 2021 and of Executive Director, ΕΜΕΑ Corporate &
Investment Bank and Global Cash Management at JP Morgan Chase in London
from 2011 to 2015.
She served as Partner at PS Advisory Services in Athens from 2010 to 2011, Senior
Country Operations & Technology Director at Citibank International Plc in Athens
from 2003 to 2009, as well as Vice President, Chief of Staff/Finance, Global
Corporate Bank and Global Consumer Bank at Citibank N.A. in London from 1997
to 2002.
She holds a Master of Science in Management, Boston University Brussels,
Belgium (1986) as well as a Bachelor of Business Administration, Public
Accounting from Loyola University of Chicago (1983).
Board of Directors' Report – 31 December 2023
71
Periklis N. Dontas, Non-Executive
Member, HFSF Representative
Mr. Periklis Dontas is a Non-Executive Member of the BoD and the HFSF
Representative under Law 3864/2010 of Piraeus Financial Holdings (and Piraeus
Bank S.A.), as well as a Member of the Risk Committee, Audit Committee,
Remuneration Committee, Nomination Committee and the Board Ethics & ESG
Committee.
He is also an Independent Non-Executive Board Member of FF Group. From 2008
to 2012, Mr. Dontas held the position of Deputy CEO and Executive Member of
the BoD of EFG Eurobank S.A. (Poland). From 2016 to 2018, he was Director of
Risk Consulting and Business Development in KPMG Advisors S.A.
Mr. Dontas has Bachelor of Arts in Economics from The American College of
Greece (1979) and an MA in Economics from Essex University, UK (1981).
Other professional commitments of Board members
Board of Directors' Report – 31 December 2023
72
BOARD MEMBER
(of Piraeus Financial
Holdings S.A. and Piraeus
Bank S.A.)
RESPONSIBILITIES IN
OTHER LISTED
COMPANIES
RESPONSIBILITIES IN OTHER
UNLISTED COMPANIES
RESPONSIBILITIES IN NON
PROFIT COMPANIES
George Handjinicolaou,
Chairman, Non-Executive
Member
HELLENIC EXCHANGES -
ATHENS STOCK
EXCHANGE - Chairman,
Non-Executive Member
HELLENIC CENTRAL SECURITIES
DEPOSITORY - Chairman, Non-
Executive Member
PIRAEUS BANK GROUP
CULTURAL FOUNDATION –
Chairman
COUNCIL OF
COMPETITIVENESS OF
GREECE - Vice President of
the Executive Committee
ATHENS EXCHANGE CLEARING
HOUSE (ATHEXClear) - Chairman,
Non-Executive Member
HELLENIC ENERGY EXCHANGE S.A. -
BoD Member
EnEx CLEARING HOUSE S.A.
(EnExClear) - Non-Executive BoD
Member
Christos Megalou,
Managing Director (CEO)
SAFE BULKERS INC. –
Independent Non-
Executive BoD Member
SNAPPI S.A. - Chairman
HBA - Non-Executive BoD
Member
ASSOCIATION OF S.A. AND
ENTREPRENEURSHIP– A’
Vice Chairman
AMERICAN-HELLENIC
CHAMBER OF
COMMERCE, BoD Member
Alexander Blades,Non-
Executive Member
SNAPPI S.A. – Non-Executive BoD
Member
David Hexter,
Independent Non-
Executive Member
SANTANDER BANK
POLSKA - Independent
Member of the
Supervisory Board
PRIVATE EQUITY NEW MARKETS -
COPENHAGEN - Non-Executive
Chairman of the Supervisory Board
Karel De Boeck, Vice
Chairman, Independent
Non-Executive Member,
Senior Independent
Director
LAMIFIL NV – Non-Executive Board
Member
WILLEMEN GROEP NV/SA – Non-
Executive Board Member
GHELAMCO INVEST NV -
Independent Non-Executive Board
Member
Board of Directors' Report – 31 December 2023
73
Solomon Berahas,
Independent Non-
Executive Member
TIRESIAS S.A. - Chairman & CEO
SAFE GROWTH INVESTEMENTS
AIFLNP LTD - Independent Non-
Executive BoD Member
ELEPAP - Non-Executive
BoD Member
ASSOCIATION OF SA AND
ENTREPRENEURSHIP –
Non-Executive BoD
Member
PIRAEUS BANK GROUP
CULTURAL FOUNDATION -
Vice Chairman
Board of Directors' Report – 31 December 2023
74
Enrico Tommaso
Cucchiani, Independent
Non-Executive Member
TERNA SPA – Non-
Executive BoD Member
ILLY CAFFE – Non-Executive Vice
Chairman of the Board
BOCCONI UNIVERSITY - BoD
Member
JAVOTTE BOCCONI
FOUNDATION - Vice
Chairman of the Board
AMICI NORMALE DI PISA
UNIVERSITY - Vice Chairman
of the Board
TRILATERAL COMMISSION -
Chairman of the Italian
delegation
ISPI – INSTITUTE FOR
INTERNATIONAL POLITICAL
STUDIES – BoD Member
WEIZMANN INSTITUTE OF
SCIENCE- BoD Member
Venetia Kontogouris,
Independent Non-
Executive Member
VENKON GROUP LLC -
Managing Director
MONTEREY CAPITAL –
Non-Executive Director
Periklis Dontas, HFSF
Representative under Law
3864/2010, Non-Executive
Member
FF GROUP (under
suspension) - Independent
Non-Executive BoD
Member
Vasileios Koutentakis,
Executive Member
PIRAEUS AGENCY
SOLUTIONS S.A. - BoD
Member
SNAPPI S.A. – Non-
Executive BoD Member
INSEAD NAA – Chairman
PIRAEUS BANK GROUP CULTURAL
FOUNDATION – BoD Member
Andrew Panzures,
Independent Non-
Executive Member
INTERAUDI BANK USA -
Independent Non-
Executive BoD Member
Board of Directors' Report – 31 December 2023
75
Anne Weatherston,
Independent Non-
Executive Member
AIB UK – Independent
Non-Executive BoD
Member
ALBA BANK – Non-
Executive BoD Member
Maria Semedalas,
Independent Non-
Executive Member
QUINTIN HOGG TRUST –
Member of the Board of
Trustees & Honorary
Treasurer
Below is a table with the number of shares of the Company held by members of the BoD and members of the Group Executive
Committee as at 31 December 2023.
Board of Directors' Report – 31 December 2023
76
BOARD OF DIRECTORS
Number of
shares
% of the share capital
George P. Handjinicolaou, Chairman of the BoD, Non-Executive Member
50,000
0.0040%
Karel G. De Boeck, Vice-Chairman, Independent Non-Executive Member,
Senior Independent Director
20,000
0.0016%
Christos I. Megalou, CEO, Executive Member (and Chairman of the Group
Executive Committee)
150,446
0.0120%
Vasileios D. Koutentakis, Executive Member (and member of the Group
Executive Committee)
60,420
0.0048%
Venetia G. Kontogouris, Independent Non-Executive Member
-
0.0000%
Solomon A. Berahas, Independent Non-Executive Member
-
0.0000%
Alexander Z. Blades, Non- Executive Member
-
0.0000%
Enrico Tommaso C. Cucchiani, Independent Non-Executive Member
-
0.0000%
David R. Hexter, Independent Non-Executive Member
-
0.0000%
Andrew D. Panzures, Independent Non-Executive Member
-
0.0000%
Anne J. Weatherston, Independent Non-Executive Member
-
0.0000%
Periklis N. Dontas, Non-Executive Member, HFSF Representative
-
0.0000%
Maria I. Semedalas, Independent Non-Executive Member
-
0.0000%
GROUP EXECUTIVE COMMITTEE
Gnardellis Theodoros
63,813
0.0051%
Margaritis Charalampos
44,870
0.0036%
Stamoulis Ioannis
46,595
0.0037%
Vlachopoulos Panagiotis
-
0.0000%
Total
436,144
0.0349%
Board of Directors' Report – 31 December 2023
77
2.2 Director Suitability Policy
In compliance with article 3 of Law 4706/2020, the Company has adopted, following a BoD proposal upon respective
recommendation of the Board Nomination Committee (“NomCo”), the Director Suitability Policy (the "Policy") which sets the
framework and specifies the suitability requirements for election to the BoD.
The Policy takes into consideration the applicable legislative and regulatory framework and aims to describe the general
principles and the criteria for the nomination of BoD members.
For each new nomination, the Company’s business strategy and the overall risk strategy, including the Company’s risk culture,
risk appetite and framework are taken into consideration. To this end, the NomCo outlines the necessary profile/ competencies
for each Director having a clear view on the medium-term objectives, challenges and risks and the Company’s succession
planning.
In order for a person to be considered as suitable candidate by the BoD and the NomCo, such person:
i) must meet the suitability criteria (fit and proper, “FAP”) defined in the Policy (reputation, honesty and integrity/ previous
experience/ independence of mind);
ii) should not have any existing or foreseeable conflicts of interest with the Company;
iii) should be able to commit sufficient time to the BoD of the Company depending on the position for which they are
recommended. Pursuant to the provisions of the applicable regulatory provisions which are incorporated in the Policy,
Directors may not hold more than one (1) of the following combinations of directorships at the same time: (a) one (1) executive
directorship with two (2) non-executive directorships; and b) four (4) non-executive directorships;
iv) should possess one (1) or more of the knowledge, skills and experience criteria detailed in the Policy. The desired Director
Profile is outlined by a variety of factors, including indicatively skills such as leadership, strategic acumen, communication,
customer and quality-orientation as well as academic qualifications and proven experience in large banking or financial firms,
management of large balance-sheet companies, RM, audit etc.
Directors must also satisfy the requirements envisaged in par. 7 of article 10 of Law 3864/2010 as in force from time to time.
In addition, depending on the position sought to fill, additional criteria may also apply.
The Company ensures individual and collective suitability at all times. Suitability is monitored on an on-going basis in order to
identify, in the light of any relevant new incident, situations where suitability should be re-assessed (including if there is any
event having material impact on the reputation of a Board member or of the Company or materially affecting the suitability of
the individual Board member or the collective suitability, if there is a material change in the business model, risk appetite or
risk strategy or structure of the Company, at individual and group level etc.).
The Policy is reviewed on a biannual basis, or ad-hoc in the event of changes in the legal and/ or regulatory framework, in order
to be updated as required. Non-material amendments of the Policy are approved by the BoD. In preparing, amending or
reviewing this Policy, the NomCo and the BoD shall take into account recommendations or findings of other Board Committees
and competent departments, especially the internal control functions.
Since the adoption of the Policy in mid 2021, a number of significant changes have taken place in the applicable relevant
framework. In particular, among others:
Board of Directors' Report – 31 December 2023
78
• In July 2021, the EBA and the ESMA published their revised final joint Guidelines on the assessment of the suitability
of members of the management body and key function holders (EBA/GL/2021/06);
• In December 2021, the ECB published its revised ECB Guide to FAP assessments, following which the BoG Executive
Committee Act 205/1/18.05.2022 “Adoption of the Questionnaire for the Fit and Proper Assessment of Members of
the Board of Directors and Key Function Holders of Significant Institutions” was published, incorporating the new FAP
questionnaire;
• On 16 June 2022 the HFSF Law (Law 3864/2010) was amended by Law 4941/2022 (in force as of 16 June 2022). The
amendments refer, inter alia, to the abolition of the strict suitability criteria provided for the Company’s BoD
members.
All of the a bove include important provisions relating to BoD members’ suitability/ eligibility criteria and therefore, following
relevant recommendation of the BoD and the NomCos, the 2023 Annual GM approved the amended the Policy of the Company.
The Policy is availa ble in the Company’s website (Investor Relations | Piraeus Financial Holdings) (piraeusholdings.gr).
2.3 Succession Policy for the BoD
The Succession Policy for the BoD (hereinafter “the Policy”) aims to provide a framework and lay out policies which ensure th e
stability, continuity and proper integration of the Company’s BoD through the identification and selection of potential
candidates, in the event of permanent, planned or unforeseen departure of any of its members, particularly for Directors
serving in leadership positions (chairmen of the Board and Committees).
The Board succession planning is a continuous forward-looking process. The aim is to make the Board a strategic asset for the
Company and to ensure that the Board always has the talent and experience it needs. The NomCo ensures that a roster of
suitable and interested candidates with different profiles is built up over time and held current. To reduce future risks, a long-
term ambition for the Company is to have a Board with an optimal mix of new Directors, those with medium tenures and those
with long tenures.
The process of succession planning is summarized below.
Identification and evaluation of current and future needs: an internal evaluation of the Board and the principal Committees’
future needs is carried annually by the NomCo. At least every second year, each member is interviewed by the Chairmen of
the BoD and NomCo, in order to get their perspective on important issues relating to succession planning. Additional input
from other stakeholders (e.g. major shareholders and management team) is collected. Additionally, an independent evaluation
of the Board will be held at a minimum every three (3) years from 2020 onwards by an appointed specialist third party.
Profile matrix: the result of the above exercise will be summarized and presented to NomCo in the form of a document in
which required skills, competences and diversity needs are mapped against the Board’s current composition. This document,
in combination with the Directors’ exit plans should form the basis for a long-term recruitment plan and research for new
directors.
Search, selection and appointment: In identifying possible candidates, the NomCo should base its search on the criteria
described in the Policy (which, inter alia, incorporate the FAP criteria of HFSF and ECB). The NomCo may use a variety of internal
and external sources for identifying potential candidates. In case of a new appointment, the list of potential candidates is
reviewed by the NomCo with the aim to narrow the search and produce a shortlist. When the shortlisting process has been
Board of Directors' Report – 31 December 2023
79
finalized, the NomCo should meet with the candidates prior to the final recommendation to the Board. Following Board
approval, meetings with the CEO and other Directors are organized prior to the candidate’s formal appointment.
Diversity and inclusion: The NomCo reviews a broad spectrum of complementary skills, personalities and competencies, when
searching for Non-Executive Directors, considering diversity as one of the factors when recommending for a new appointment.
Board composition and succession planning is about inclusion in terms of skills, knowledge and viewpoints. Traditional
dimensions of diversity, such as race, gender and tenure are important, but the members of the Board should collectively
possess a diverse range of skills, expertise, industry knowledge, business and other experience (inclusion), necessary for the
effective oversight of the Company.
Succession planning process for the CEO
The Succession Planning process for the CEO is governed by a separate policy, namely the CEO Succession Planning Process.
Said process is based, amongst others, on the following principles:
• Issues related to the CEO succession should be addressed proactively and therefore the succession plan is an ongoing
activity with a long-term perspective.
• Except where the CEO departs unexpectedly, the CEO is an active participant, and it is his/her responsibility to ensure
that there is an internal process for developing talent for the top executive roles.
• The succession planning includes, inter alia, an annual review by NomCo during which the CEO and the Group HR lay
out the forward-looking leadership factors against which the talent should be evaluated as well as an external
benchmarking.
The process is partially differentiated depending on whether the departure of the current CEO is planned or unplanned.
In case of anticipated succession, the process briefly includes the following phases:
• Identification and evaluation of needs: The process begins with determining the Company’s future strategy, which
serves as a baseline for the type of skills, and experience that is needed from the new CEO in order to meet the
Company’s goals.
• Selection criteria: The NomCo, in collaboration with the CEO, distills the abovementioned considerations into a set of
criteria that are the most critical for assessing and selecting suitable candidates.
• Search and selection: The NomCo should seek to sustain a pool of external and internal talent from which to identify
potential candidates.
• Nomination: The NomCo reviews the list of potential candidates and produces a shortlist. Then, the Committee meets
subsequently the potential candidates and assesses them, also examining incompatibilities and disqualifications of
legal nature. Based on the results of the assessment, the NomCo recommends the best candidate to the Board.
In case of an unanticipated succession, the whole process is handled by the NomCo. The NomCo prepares a ready-to use list
of potential candidates from which the Board could choose the individual who can run the Company as an interim CEO (in case
there is no apparent successor identified and immediately available). Preferably, such an interim CEO should be selected from
the pool of internal candidates. In case the Board believes there are no internal candidates there are ready for the position of
Board of Directors' Report – 31 December 2023
80
the CEO, an external search for a permanent replacement follows.
2.4 Diversity of the BoD members
Upon suggestion of the Board NomCo, the BoD has adopted the BoD Diversity Policy. The policy is applied in conjunction with
the Director Suitability Policy, as mentioned above and is also considered in the implementation of the Board members and
CEO succession planning.
The Company recognizes and embraces the importance and the benefits of diversity for safeguarding and improving its
competitive advantage and innovation as well as for achieving maximum team performance and effectiveness. In this context,
when nominating new Board members or top management executives, a combination of elements is taken into consideration,
including inter alia: skills, abilities, qualifications, knowledge, experience, educational background, professional training,
professional experience, the gender, the age and other qualities, which may vary depending on the identified weaknesses and
the business or strategy needs of the Company.
All areas of knowledge and experience required for the Company's business activities are covered by the BoD. The Company
has a highly diversified BoD in terms of educational and professional experience backgrounds, bringing in a variety of
perspectives that can be key to an organization's success. Such education and professional backgrounds include indicatively
finance, economics, business administration, mechanical/ electrical engineering, philosophy, politics, law as well as extensive
banking and financial services experience and certifications, training and prior experience in accounting, audit, risk and IT.
In addition, the current BoD is consisted of members of seven (7) different nationalities (Greece, Britain, Italy, New Zealand,
USA, Belgium, Canada).
Having a wide range of perspectives in the boardroom means that the status quo is constantly challenged and critically
reassessed and that information is carefully evaluated. The achieved diversity of the Board members effectively contributes to
the expression of different views, to the avoidance of “group thinking” and to the constructive dialogue between members,
thus succeeding the final decisions to be taken on the basis that the non-executive members of the Board Members exercise
appropriate oversight to the Management.
The Company is compliant with the law requirement/ threshold (25%) for the adequate representation of females in the BoD,
according to the provision of the article 3 par. 1 lit. b΄ of Law 4706/2020, with the participation of three (3) women-members
of the BoD (25% x 13 members = 3.25, rounded to the nearest whole number). Following the unexpected resignation of a
female independent member in November 2023 the Company committed and immediately initiated the respective process to
replace the resigned member with another suitable female member. The Company proceeded to the selection of such a person
appointing her as an Independent Non Executive Member of the Board at the BoD meeting of 22 February 2024, thus ensuring
compliance with the threshold (25%) for the adequate representation of females in the BoD. The Company will work further
in enhancing gender diversity to the BoD and is committed to maintain compliance with the legislative and the regulatory
requirements.
The Group also aspires to increase percentage of women in upper management positions to 35% by 2025 (currently at 32%).
2.5 Operation
The BoD, immediately after its election by the GM, forms into body and elects a Chairman and one or more Vice-Chairmen and
Managing or Executive Directors from amongst its members. According to the current legal framework and international best
Board of Directors' Report – 31 December 2023
81
practices, the Chairman of the Company shall not at the same time serve as Managing/ Executive Director.
The Chairman is head of the Board and presides over its meetings. In the event of his absence or not being in a position to
perform his duties, he is substituted by one of the Vice-Chairmen of the Board; they, in turn, are substituted by another
director, appointed by a resolution of the Board. Secretarial duties of the BoD are performed by one of its members or any
other third party appointed by the Board. The Board has assigned the support of its operations of the BoD to a capable,
specialized and experienced Corporate Secretary, who is appointed by it.
The Senior Independent Director, appointed by the BoD from amongst its independent non- executive Board members, has
the following duties and responsibilities:
1. lead the Non-Executive Directors and serve as a trusted intermediary for them, when required;
2. support the Chairman and other Directors or shareholders, in exceptional circumstances, to resolve any significant
issues, including any potential conflicts of interest between the Chairman of the Board and the Company;
3. in exceptional circumstances, request for a special meeting of the BoD and define its agenda.
In the exceptional circumstances under paragraph 2 above, the Senior Independent Director may:
• organize meeting of Non-Executive Directors and reflect their concerns to the Chairman and the CEO;
• act as intermediary and facilitator between the Non-Executive Directors and the Chairman, as necessary;
• request that a Board meeting is convened as per paragraph 3 above.
The BoD is convoked by its Chairman or his deputy and convenes at least once a month at the Company’s seat or by
teleconference, in accordance with the provisions of its Articles of Association and of corporate law, as in force. The BoD may
validly convene anywhere in Greece or abroad, where the Company pursues business activities.
Subject to the provisions of art. 5 para.3 of Law 4706/2020, stipulating that sessions of the BoD are quorate when at least two
(2) independent non-executive members are present for matters regarding the preparation of the financial statements or items
for the approval of which a decision by the GM by increased quorum and majority according to Law 4548/2018 is required, the
Board is in a quorum and convenes validly when at least half of its members plus one (1) are present or represented. However,
the number of members personally present may never be less than five (5). Fractions are omitted in determining whether a
quorum is achieved. When the BoD convenes by teleconference, the members participating are considered physically present.
Resolutions of the BoD shall be taken by absolute majority of the present and represented members unless otherwise provided
by Greek Law, the Articles of Association and the Regulation of the Company. Drawing up and signing of minutes by all Board
members or their representatives equals a resolution of the BoD, even if no meeting has been held.
2.6 HFSF role in the Company
Pursuant to the provisions of Greek Law 3864/2010, the HFSF’s Representative in the BoD has the following rights:
a)
to veto any decision of the Company’s BoD:
i.
in respect of the distribution of dividends and the remunerations and bonuses policy for the Chairman, the
Managing Director and the other members of the BoD, as well as for those persons holding the position of or
exercising the duties of general managers as well as their deputies when the ratio of NPEs to total loans of the credit
Board of Directors' Report – 31 December 2023
82
institutions, as calculated according to item (ii) of case g of paragraph 2 of article 11 of Commission Implementing
Regulation (EU) 2021/451 of 17 December 2020, exceeds 10%; it is noted that this provision is not currently
applicable to the Company;
ii.
in respect of decisions to amend the articles of association, including the increase or decrease of capital or the
provision of relevant authorization to the BoD, merger, division, conversion, revival, extension of the duration or
dissolution of the Company, transfer of assets, including the sale of subsidiaries, or for any another issue requiring
an increased majority in accordance with the provisions of Law 4548/2018 and which decision is likely to significantly
affect the HFSF's participation in the share capital of the Company;
b)
to request an adjournment of a Board meeting for three (3) business days in order to receive instructions from the CEO
of HFSF. This right may be exercised until the end of the relevant BoD meeting;
c)
to convene the BoD of the Company.
According to the Tripartite Relationship Framework Agreement (“RFA”) dated 22 February 2024 and entered into between
HFSF, the Company and the Bank, an HFSF Observer assists the HFSF Representative and may attend BoD and BoD Committees’
meetings on which the HFSF Representative participates, without voting or other rights.
In addition, in accordance with the RFA, until the later of (i) the end of term of the present BoD, or (ii) 31 December 2025, the
HFSF’s Representative may be appointed as a member of one or more of the following BoD Committees of the Company: Audit
Committee, Risk Committee, the Remuneration Committee, and the Nomination Committee.
In exercising his rights, the HFSF Representative shall respect the Company’s business autonomy.
The BoD held seventeen (17) meetings during the year 2023.
The following table presents the percentage of the Board and Committees members’ participation in the respective meetings
for the reporting period.
Board of Directors' Report – 31 December 2023
83
BoD
Risk Committee
NomCo
Remuneration
Committee
Audit Committee
Board Ethics &
ESG
Committee
Average
participation
100%
100%
100%
98%
98%
100%
Total number of
meetings
17
12
6
7
17
3
Name
Attendance
Meetings
Attendance
Meetings
Attendance
Meetings
Attendance
Meetings
Attendance
Meetings
Attendance
Meetings
George
Handjinicolaou
100%
17/17
-
-
-
-
-
-
-
-
-
-
Karel De Boeck
100%
17/17
100%
12/12
100%
6/6
-
-
100%
17/17
100%
3/3
Christos
Megalou
100%
17/17
-
-
-
-
-
-
-
-
-
-
Vasileios
Koutentakis
100%
17/17
-
-
-
-
-
-
-
-
-
-
Venetia
Kontogouris
100%
17/17
-
-
100%
6/6
-
-
-
-
100%
3/3
Enrico Cucchiani
100%
17/17
-
-
100%
6/6
100%
7/7
-
-
100%
3/3
David Hexter
100%
17/17
-
-
100%
6/6
-
-
94%
16/17
100%
3/3
Solomon
Berahas
100%
17/17
100%
12/12
-
-
86%
6/7
100%
17/17
100%
3/3
Anne
Weatherston
100%
17/17
100%
12/12
-
-
-
-
100%
17/17
-
-
Andrew
Panzures
100%
17/17
100%
12/12
100%
6/6
100%
7/7
-
-
-
-
Francesca
Tondi
1
100%
16/16
-
-
-
-
100%
6/6
94%
15/16
100%
3/3
Alexander
Blades
100%
17/17
100%
12/12
100%
6/6
100%
7/7
-
-
100%
3/3
Board of Directors' Report – 31 December 2023
84
Periklis Dontas
100%
17/17
100%
12/12
100%
6/6
100%
7/7
100%
17/17
100%
3/3
1. Ms. Francesca Tondi resigned from the BoD in November 2023.
2.7 Roles and Responsibilities
Pursuant to Article 15 of the Company's Articles of Association, the BoD represents the Company and is authorized to resolve,
without restriction, on any issue relating to the Company's management, administration of its property and the pursuit of its
business objectives in general. The BoD may not resolve on issues, which in accordance with the Greek Law and the Articles of
Association, fall within the exclusive responsibility of the GM.
Under Article 16 of the Company's Articles of Association, the Company is represented by its BoD, which may delegate authorit y
relating to the representation of the Company and also the exercise of all or some of its powers or responsibilities, except
those requiring collective action, to one or more persons whether members of the BoD or not, setting out the extent of the
powers conferred upon them. Under the above provisions of the Articles, the Board determines the system for representing
the Company and the limits within which the authorized representatives can act.
The Company's Internal Regulation states that the prime obligation and duty of the Board Members is the continuous pursuit
of enhancing the Company's long-term economic value and the protection of the general corporate interests. The BoD is
responsible for drawing up and adopting a detailed Business Strategy extending for at least one year defining clear business
objectives, both for the Company itself and for the Group. The Internal Regulation further outlines on the role and
responsibilities of the BoD as a whole as well as of executive, non-executive and independent non-executive members.
Principal activities and significant issues considered during 2023
In the performance of its duties for 2023, the Company’s BoD inter alia:
In relation to Corporate Governance issues
• Proposed to the Annual GM the re-election of the thirteen (13) members of the BoD and the type, size, term of office and
qualifications of the members of the Audit Committee;
• prepared and convoked the Annual GM of Shareholders held on 27 June 2023 and approved the respective
documentation;
• was updated on the results of the annual review of the independence of Board Members and confirmed that all
Independent BoD members meet the independence requirements of the law;
• performed the annual CEO’s evaluation for 2022 and the mid-year CEO’s evaluation for 2023;
• was updated on the progress of the Board Members’ Succession Plan;
• approved amendments in the Director’s Remuneration Policy, the Annual Remuneration Report for the year 2022 and
the BoD’s remuneration for the years 2022-2023;
• approved the amendment of the Directors Suitability Policy and submitted it for approval by the Annual GM;
Board of Directors' Report – 31 December 2023
85
• approved the revision of the NomCo’s Terms of Reference;
• approved the adoption of the Distribution Policy;
• approved the introduction of a Long – Term Incentive Programme;
• was updated on the final decision of the Annual SREP 2022.
In relation to Audit and Compliance issues, the BoD approved the following:
• the revision of the Audit Committee’s Terms of Reference;
• the Action Plans for the year 2023 of Group’s Internal Audit and Compliance Units;
• the revision of the Code of Conduct and Ethics of the Company.
The BoD was also updated on the progress of the spe cial audits of the Internal Audit Unit (“IAU”).
In relation to RM issues, the BoD approved the following:
• the Capital and Liquidity Adequacy Statements (“CAS”/ “LAS”) for 2022 as well as the ICAAP and ILAAP 2022;
• the Group Risk and Capital Strategy & the RAF for 2023;
• the annual review of the Company’s Recovery Plan.
In relation to corporate actions and granting authorizations the BoD approved the following:
• the VES for 2023.
In relation to business monitoring, financial information, Company’s policies and relevant updates the BoD
approved the following:
• the 2022 annual financial statements and the 2023 interim financial statements;
• the Group annual budget for 2024;
• the NPE Plan for the year 2023 and the Group Business Plan for the years 2023-2025.
The BoD was also updated on the assignment of non-audit services to the Company’s statutory auditors.
2.8 Induction and training of Board members
Aiming to ensure that new members of the BoD are provided with all the information and training necessary to enable them
to contribute appropriately to the operations of the BoD from the time of their election and to the accomplishment of its
mission, the Company has adopted a Board Induction and Training Policy. In this context, it implements an induction procedure
for newly elected/ appointed Board members aiming to facilitate the Board members’ understanding of the Group and the
Company’s structure, business model, risk profile, governance arrange ments and the role of the member(s) within them.
Board of Directors' Report – 31 December 2023
86
Upon the election of a new member by the GM of Shareholders or appointment by the BoD, a letter of congratulations and
welcome is addressed to her/him by the Company Secretary, accompanied by a detailed induction pack (a living document
which provides them with a wide range of information about the Company and the Board, comprising of material such as the
articles of association, the internal regulation, information on the obligations deriving from their membership, the Board
meetings schedule for the year etc.).
Prior to attending their first Board meeting, members are welcomed by the Chairman of the Board and meet with the CEO and
the top executive management of the Company, with the opportunity to ask questions with reference to the Company and its
operations. New members are also briefed on issues the BoD is dealing with at the moment or will be looking at in the future.
In case of multiple new memberships, induction day seminars are organized and attended by the new members.
Following the FAP suitability assessment the new members are submitted to, it is expected and recognized that they possess
sufficient knowledge, experience and expertise to fulfill their role. Nevertheless, they are not necessarily experts in all
disciplines, business areas or governance aspects. Therefore, training is a key driver of continued board effectiveness and a n
ongoing commitment of Board members and the Company.
The Company makes available the financial and human resources to implement proper induction and training programs and
encourages initiatives aiming to improve the collective or individual skills, knowledge or competence of Board members on an
ongoing or ad-hoc basis. The Corporate Secretary, in collaboration with the Group HR, is responsible for producing the annual
training schedule. The NomCo sponsors and oversees the training schedule for the members of the Board, on an ongoing basis.
In addition, regular presentations by management and staff to the Board and Committees are performed in order to educate
or keep them informed on changes within the Company or on legal, regulatory, market and industry requirements and
standards. Personalised educational programs may be designed and implemented, where needed.
In addition, once a year, Board members attend (one-day/two days) Strategy Seminars where top executive management
presents the results, goals, challenges faced by the organization.
During 2023, taking into consideration the market trends and needs as well as the previous Board self-assessment outcomes,
the training initiatives for the BoD members were focused on topics related to ESG, cyber risk, anti-money laundering and
artificial intelligence, and were conducted by subject matter experts from international and Greek companies.
2.9 Assessment of the BoD
According to the Company’s “Self-Assessment Policy for the BoD, Board members and Board Committees”, taking into
consideration relevant provisions of the Suitability Policy and other related policies of the Board, the applicable regulatory
provisions and best practices on corporate governance, the BoD, assisted by the NomCo, conducts a self- assessment exercise
on an annual basis in order to, inter alia, identify strengths, weaknesses and training needs, to promote accountability of the
Board and its members in the performance of their duties and to improve effectiveness.
The scope and the criteria of the assessment are defined by the NomCo and include, without limitation, the structure
(composition, diversity, skillset, experience etc.), dynamics and operation (meeting frequency and procedures, availability and
adequacy of information etc.), understanding and contribution to the Company’s operations, level of candor, impartiality,
transparency and other behaviors within the Board. The specific parameters and criteria may vary each year depending on the
aspects on which emphasis is placed each time.
The NomCo deliberates on the format, content and methodology to be adopted for the assessment, including the engagement
of external consultants at least every three years, to submit recommendation or to conduct the assessment in whole or in part,
Board of Directors' Report – 31 December 2023
87
the use of questionnaires and/ or interviews and/ or alternative methodologies.
The conclusions of the self-assessment are summarized by the NomCo in a report together with any recommendation or
changes the Committee deems appropriate and are presented to the Board. A brief summary of the results is also included in
the annual Corporate Governance Statement.
2023 BoD self assessment
In January 2024, the Company has conducted a self-assessment exercise to review the effectiveness of the Board for the year
2023, which involved all members of the Board and its Committees.
All Board members participated in the exercise by completing a questionnaire covering a wide range of areas, such as strategy,
risk governance, internal control, strategic HR issues and remuneration, sustainability and stakeholder engagement, Board
nomination and composition, Board functioning and dynamics, Board secretariat support, information flows, Board Chair
performance, interaction with management, and effectiveness of the Board Committees.
The results of the aforementioned Board self-assessment exercise reflect an overall positive picture of the functioning of the
Board and its Committees. Board members are committed to their role, work well together and provide a constructive
challenge and oversight to Management proposals and decisions. The strengths highlighted in this year’s assessment include,
inter alia, the highly effective collaboration of the Board with the CEO, the appropriate empowerment of the CEO to execute
the strategy and business plan agreed with the Board, the excellent performance of the Board Chairman, the productive and
open communication of the Board with senior management, and the effective operation of the Board Committees that
adequately and constructively support the Board’s mandate, with clear roles and terms of reference.
Considering areas for attention and further improvement, the Board members focused on the Board succession plan,
considering that some Independent Members reach independence limits in the upcoming years, the improvement of
remuneration levels in order to be able to retain and attract talent both at senior management and at Board level, the further
enrichment of the Board diversity, and the closer monitoring of the ongoing key strategic initiatives.
2.10 Board Remuneration
Board members’ remuneration is approved by the Annual GM of Shareholders, upon respective recommendation of the BoD
(non-executive members) following proposal by the Remuneration Committee. The proposal is formulated taking into
consideration market practice, international best practice, the legal and regulatory framework applicable to the Company as
well as the Directors’ Remuneration Policy which sets the principles and describes the elements and governance of
remuneration paid to BoD members. The Annual GM of Shareholders held on 27 June 2023: a) approved (by 99.56%) the
remuneration paid to members of the BoD in respect of 2022 and gave preliminary approval for remuneration to be paid for
the year 2023, b) casted a positive vote (99.49%) for the Remuneration Report of year 2022, in accordance with the provisions
of article 112 of Law 4548/2018. Said report provides detailed information on the remuneration of the members of the BoD
and is available in the Company’s website and finally c) approved (by 91.85%) the proposed amendments to the Directors’
Remuneration Policy. The revised Policy is available in the Company’s website.
2.11 Committees
Aiming to constantly improve the effectiveness of the management of the Company and the Group, responsibilities for certain
areas requiring expert competence have been delegated to BoD or Executive Committees.
Board of Directors' Report – 31 December 2023
88
3. BoD Committees
•
Audit Committee
On the date of the publication of the 2023 Annual Financial Report, the composition of the Audit Committee is as follows:
AUDIT COMMITTEE
Anne Weatherston
Chairman, Independent Non-Executive BoD Member
Member since: July 2020, Chair since: July 2021
Solomon Berahas
Vice-Chairman, Independent Non-Executive BoD Member
Member since: February 2017
Karel De Boeck
Member, Independent Non-Executive BoD Member
Member since: August 2016
David Hexter
Member, Independent Non-Executive BoD Member
Member since: August 2016
Maria Semedalas
Member, Independent Non-Executive BoD Member
Member since: February 2024
Periklis Dontas
Member, Non-Executive BoD Member, HFSF Representative pursuant to Law
3864/2010
Member since: December 2019
83% Independent Non-Executive
17% Non-independent
During 2023, the following change was made to the composition of the Committee: On 17 November 2023, Ms. Francesca
Tondi ceased to be a member of the Committee, following her resignation from the BoD.
During 2024 and until the date of publication of the Annual Financial Report the following amendments took place in the
composition of the Committee: Ms. Μaria Semedalas Independent Non-Executive Member was appointed member of the
Committee on 22 February 2024.
Governance - Operation
The Audit Committee is comprised of Non-Executive members of the Board, the majority of which are independent within the
meaning of the provisions of Greek Law 4706/2020. The HFSF Representative participates as a member in the Audit Committee,
with full voting rights. The operation of the Committee is governed by article 44 of Greek Law 4449/2017, as amended by Greek
Law 4706/2020, the respective notices, explanations and recommendations of the Supervisory Authorities and additionally by
Board of Directors' Report – 31 December 2023
89
its Terms of Reference.
It is noted that the Chair of the Audit Committee, Ms. Anne Weatherston is an Independent Non-Executive member of the BoD
and has, inter alia, extended experience in internal audit and finance within the meaning of Greek Law 4449/2017. The
Committee as a whole possesses appropriate competence and experience for the effective performance of its duties.
The Chief Financial Officer (“CFO”), the Head of Internal Audit, Compliance and Risk Officer, the Group Controller, the Senio r
Advisor on Internal Control and audit matters and other Executives of Senior Management are invited to attend the Audit
Committee meetings. The Group’s statutory auditors are invited to attend all meetings. Τhe Audit Committee Chair maintained
regular contact with the statutory audit partner throughout the year.
The Audit Committee reviewed and submitted to the Board for its approval, the updated Terms of Reference of the
Committee, on 16 November 2023.
Based on its Terms of Reference, the Audit Committee meets at least eight (8) times a year, and extraordinarily, if the
circumstances so require.
In 2023, the Audit Committee convened 17 times and all its decisions were taken unanimously based on the thorough
examination of supporting material and further clarifications provided during these meetings by the competent managerial
officers, statutory auditors and other experts. Members’ attendance rates in the Committee meetings are depicted in the
Members Participation in the BoD and the respective Committees’ table above. It is noted that the statutory auditors attended
all Audit Committee’s meetings following respective request.
Roles and responsibilities
The main duties of the Audit Committee are:
• Supervising and evaluating of the drafting processes of the annual and interim financial statements of the Group and the
Company prior to their publication;
• Supervising of the audit and review of the Group and the Company's annual financial statements and mid-year interim
financial information conducted by the statutory auditors and cooperation with the statutory auditors on a regular basis;
• Ensuring the independence of the statutory auditors in accordance with applicable Greek Laws;
• Proposing to the Board the selection of statutory auditors and whenever deemed appropriate, proposing their
replacement or rotation; conducting the tender procedure for the appointment of the auditors in accordance with article
16 of Regulation (EU) 537/2014 in conjunction with article 44 of Greek Law 4449/2017;
• Monitoring and annual evaluation of the adequacy and effectiveness of the ICS of the Group and the Company;
• Evaluating the work of the Internal Audit, focusing on issues related to the degree of its independence, the quality and
scope of its audits, the priorities determined by changes in the economic environment, the systems and in the level of
risks and the overall efficiency of its operation;
• Determining the scope and appointing the latest every three (3) years, an external audit firm, other than the statutory
auditors to assess the adequacy of the ICS;
Board of Directors' Report – 31 December 2023
90
• Monitoring and evaluating on an annual basis the work of the Compliance function.
How the Committee discharged its responsibilities during 2023
Regarding Financial Statements and relevant notifications, the Audit Committee:
• Reviewed the Group and the Company’s critical accounting estimates and judgments and their application to the Group
and the Company's quarterly interim financial statements as well as annual financial statements;
• Reviewed the quarterly interim financial statements, half-year interim financial statements and annual financial
statements prior to their publication, discussing and asking for clarifications on the accounting standards implemented
and suggested to the Board their approval;
• Met regularly with Management and the statutory auditors to discuss any changes in accounting policies, critical
accounting estimates, one-off items impacting the financial statements and any other significant issues;
• Was updated regularly and reviewed legal and tax matters which could significantly impact the judgments made by
Μanagement when preparing the financial statements;
• Was updated regularly and reviewed financial reporting issues that could significantly affect the annual and interim
financial statements, prior to their publication.
Regarding External Audit, the Audit Committee:
• Reviewed the statutory auditor's audit plan and methodology for the interim review and the annual audit, the extended
independent auditor’s report and audit findings;
• Ensured appropriate rotation of the statutory auditors after five (5) consecutive years and proposed to the BoD the
appointment of Deloitte as the Group’s statutory auditor for the financial year 2023;
• Reviewed and proposed to the Board the fees for audit and permissible non-audit services to Deloitte for the year ended
31 December 2023, as disclosed in Note 48 of the annual financial statements;
• Considered Deloitte’s independence, in accordance with professional ethical standards. Deloitte provided the Audit
Committee with written confirmation of its independence for the financial year 2023;
• Was informed of the update of Deloitte’s audit plan and audit approach.
Regarding the ICS, the Audit Committee:
• Promoted the continuous strengthening of the ICS as a strategic priority for the BoD and Management of the Group and
the Company, as well as the procedure for the development and integration of the appropriate internal control
mechanisms, with the objective of the further improvement of the OR that the Group face in its operations;
• Assessed the effectiveness of the ICS and the developments affecting it. In order to carry out its assessment, the Audit
Committee discussed with Management the internal control deficiencies as well as the implementations of remediation
actions, following recommendations of the internal and statutory auditors as well as the Supervisory Authorities;
Board of Directors' Report – 31 December 2023
91
• Reviewed and approved the report on the Assessment of the adequacy of the ICS required by the Law 4706/2020 on listed
entities performed by the audit firm Grant Thornton S.A..
Regarding IAU, the Audit Committee:
• Monitored the implementation of the Internal Audit Annual Action Plan for year 2023 and concluded that the Internal
Audit was effective;
• Was notified of the Internal Audit Annual Action Plan for year 2024, staff related issues and budget. Pre-approved its
implementation and submitted it for further approval to the BoD;
• Was notified on the significant audit findings (regular and special audits) and Management’s responses in relation to the
timing and activities of remediation plans.
Regarding Compliance Function, the Audit Committee:
• Monitored the implementation of the Compliance Annual Action Plan for year 2023 and concluded that Compliance
function was effective;
• Was notified of the Compliance Annual Action Plan for year 2024, pre-approved its implementation and submitted it for
approval to the BoD;
• Reviewed and approved the updated Group Compliance Policy;
• Reviewed and preapproved the Annual report of Money Laundering Responsible Officer (“MLRO”), on Anti-Money
Laundering and Counter-Terrorism Financing for 2022 and submitted it for approval to the BoD;
• Reviewed the updated Code of Conduct and Ethics;
• Reviewed the new Policy against violence and harassment.
Information on the current composition of the Audit Committee, its operation and responsibilities are available on the
Company’s website.
The Annual Audit Committee’s Report pursuant to article 44 par. 1 (case i) of Law 4449/2017 will be published together with
the Annual Financial Report (to which is incorporated by reference) and will be available in the Company’s website.
•
Risk Committee
Οn the date of publication of the 2023 Annual Financial Report the composition of the Risk Committee is as follows:
Board of Directors' Report – 31 December 2023
92
RISK COMMITTEE
Karel De Boeck
Chairman, Independent Non-Executive BoD Member, Senior Independent Director
Chairman since: August 2016
Andrew Panzures
Member, Independent Non-Executive BoD Member
Member since: July 2020
Anne Weatherston
Member, Independent Non-Executive BoD Member
Member since: June 2021
Alexander Blades
Member, Non-Executive BoD Member
Member since: February 2017
Maria Semedalas
Member, Independent Non-Executive BoD Member
Member since: February 2024
Periklis Dontas
Member, Non-Executive BoD Member, HFSF Representative
Member since: December 2019
67% Independent Non Executive
33% Non-Independent
During 2023 Mr Solomon Berahas, an Independent non executive BoD member, was also a member of the Risk Committee and
its elected Vice Chairman. On 31 January 2024 the BoD decided that Mr Berahas ceases to be a member of the Risk Committee
and joins, as Chairman the BoD Ethics and ESG Committee.
During 2024 and until the date of publication of this Report the following amendments took place in the composition of the
Committee: On 31 January 2024 the BoD decided that Mr Berahas ceases to be a member of the Risk Committee and joins, as
Chairman the BoD Ethics and ESG Committee.Ms. Μaria Semedalas Independent Non-Executive Member was appointed
member of the Committee on 22 February 2024.
Governance - Operation
The Risk Committee consists of non-executive BoD members appointed by the BoD. The number of Committee Members
cannot be lower than three (3) and cannot exceed 40% (rounded to the nearest integer number) of the total number of the
BoD members. The majority of the Members (rounded to the nearest integer number and excluding the HFSF Representative)
should meet the criteria for the independence of Board Members, in accordance with greek legislation. The Representative of
the HFSF participates as a Member in the Risk Committee with full voting rights.
The Chairman of the Committee is appointed by the BoD. The capacity of the BoD’s Chairman is incompatible with the capacity
of the Risk Committee’s Chairman, while the Chairman of the Risk Committee cannot be the Chairman of Piraeus Financial
Holdings’ Audit Committee at the same time.
Board of Directors' Report – 31 December 2023
93
The Chairman of the Risk Committee, Mr. Karel De Boeck has, inter alia, extended experience in RM. The Members of the Risk
Committee should possess adequate knowledge and previous experience in the financial services and banking industry, with
at least one (1) member having solid risk and capital management experience, as well as familiarity with the local and
international regulatory framework.
The Compliance and Risk Officer has been designated as the Executive Secretary by the BoD. The Executive Secretary is
independent, reports directly to the Risk Committee and is subject to audit by the Internal Audit.
The Committee convenes, upon its Chairman’s invitation, on a monthly basis and exceptionally when this is deemed necessary.
In order to fulfill its duties, the Risk Committee held 12 meetings during 2023.
The mission of the Risk Committee is, inter alia, to ensure that:
• The Company and its Group has a well-defined Risk and Capital Strategy and RAF, in line with its business goals as well
as with the available human and technical resources. The risk appetite of the Company and the Group is articulated
and clearly communicated in a set of quantitative and qualitative statements, including specific limits for the material
risks;
• All risks connected to the activity of the Company and the Group are effectively identified, assessed, measured,
controlled, mitigated and monitored;
• The RM and control framework in place, including policies, methods and tools, complies with Risk and Capital Strategy
and and RAF as well as with regulatory and supervisory requirements.
Roles and Responsibilities
For the achievement of its goal, the Committee undertakes, inter alia, the following duties and responsibilities:
• Monitors, assesses and provides update to the BoD with respect to the compliance with supervisory requirements,
the risk profile and the adherence to the approved risk appetite limits and early warning levels of the Company and
the Group;
• Evaluates the adequacy and effectiveness of the RM & control framework to ensure that it remains comprehensive,
adequate and proportionate to the nature, extent and complexity of the Company and its Group current activities;
• Oversees (jointly with the Audit Committee) and provides update to the BoD with respect to the implementation
progress of the major initiatives related to OR as well as internal control enhancements.
How the Risk Committee discharged its responsibilities during 2023
• Evaluated and made recommendations to the BoD in respect to major risks related to strategic/ priority actions that
required the approval of the latter, including, indicatively and not exhaustively, the:
−
2023 Risk and Capital Strategy and RAF;
−
revisions of selected indicators and limits of 2023 RAF;
−
NPE Plan 2023-2025;
Board of Directors' Report – 31 December 2023
94
• Assessed the adequacy and effectiveness of the OR and control framework and relevant policies;
• Obtained an overview and provided update to the BoD on the 2023 Company’s Risk Annual Plan, and informed on the
2024 Annual Plan;
• Obtained an overview and provided update to the BoD on Company’s Risk reports regarding the operational losses,
the evolution and profile of the key risks undertaken, the 2023 Risk Identification Annual Report, the Operational Risk
and Control Assessment and Effectiveness and the respective results at a Company level;
• Obtained an overview, jointly with the Board Ethics and ESG Committee, on the environmental and climate risks of
the Group;
• Evaluated and provided recommendation to the BoD when required, in respect to the development, documentation,
re-assessment and monitoring of the:
−
Implementation process of the 2022 ICAAP and CAS and of the 2022 ILAAP and LAS;
−
2023 Recovery Plan;
−
2022 Risk Capital and Risk Management Regulatory Disclosures on a Consolidated Basis ;
−
2024 Risk Identification Annual Report;
• Evaluated, and provided recommendation to the BoD in respect to the regular revision of risk related policies and
documents, including indicatively, the RAF, the ICAAP Framework, the ILAAP Framework, the Stress Testing
Framework, Risk Capital and Risk Management Regulatory Disclosures Policy, SRT Policy, Simple Transparent and
Standardized (“STS”) Synthetic Securitizations Policy, Climate Risk Classification Document, Group Anti-Fraud Policy,
and Group Operational Risk and Internal Control Policy.
More information on the current composition of the Committee, its operation and responsibilities is available on the
Company’s website.
•
Remuneration Committee
On the date of publication of the 2023 Annual Financial Report, the composition of the Remuneration Committee is as follows:
Board of Directors' Report – 31 December 2023
95
REMUNERATION COMMITTEE
Andrew Panzures
Chairman, Independent Non-Executive BoD Member
Vice Chairman since: June 2021 & Chairman since: June 2022
Enrico Cucchiani
Member, Independent Non-Executive BoD Member
Member since: March 2017
Solomon Berahas
Member, Independent Non-Executive BoD Member
Member from: February 2017 to September 2017 and reappointed as a Member
since: July 2020
Alexander Blades
Member, Non-Executive BoD Member
Member since: August 2016
Maria Semedalas
Member, Independent Non-Executive BoD Member
Member since: February 2024
Periklis Dontas
Member, Non-Executive BoD Member, HFSF Representative
Member since: December 2019
67% Independent Non-Executive
33% Non- Independent
During 2023, the following change was made to the composition of the Committee: On 17 November 2023, Ms. Francesca
Tondi ceased to be a member of the Committee following her resignation from the BoD.
During 2024 and until the date of publication of the Annual Financial Report the following amendments took place in the
composition of the Committee: Ms. Μaria Semedalas Independent Non-Executive Member was appointed member of the
Committee on 22 February 2024.
Governance - Operation
According to its Terms of Reference, the Remuneration Committee is appointed by the BoD of the Company and consists of at
least three (3) members of the BoD, while the total number of its members should not exceed 40% of the BoD Members
including the HFSF Representative who participates with full voting rights. The majority of the members must be independent.
The Committee, as a body, should have knowledge, expertise and professional experience in remuneration related issues, RM
and control activities. At least one (1) member of the Committee should also be a member of the Risk Committee to oversee
alignment of the Remuneration Policy with the Company's Risk and Capital Strategy.
The Remuneration Committee shall meet at the invitation of the Chairman whenever he/she deems it necessary for the
execution of its remit, but no less than four (4) times in each calendar year. Resolutions may only be adopted when a quorum
of at least half of its members are present. Resolutions of the Committee are adopted by majority vote of the members present.
The Remuneration Committee held seven (7) meetings during 2023. Members’ attendance rates in the Committee meetings
Board of Directors' Report – 31 December 2023
96
are depicted in the Board Members Participation in the BoD and the respective Committees table above.
Roles and Responsibilities
The mission of the Remuneration Committee is to design, monitor the implementation and periodically review the Group’s
remuneration policy, in accordance with the applicable legislative and regulatory framework and the alignment with the
Company’s strategic goals. In the execution of its duties, the Remuneration Committee takes into account the RAF of the
Company, the long-term interests of shareholders, investors and other stakeholders. Within the scope of responsibilities of the
Remuneration Committee the following activities are included: a) the monitoring of the implementation of a framework that
objectively evaluates performance and is directly linked to the determination of the remuneration of employees, b) the
overview of the Group´s talent management and succession planning policies as well as c) the implementation of strategies
aiming at building a corporate culture that will support the Company´s objectives and vision.
The Remuneration Committee, inter alia:
• Reviews annually the Group's Remuneration Policy;
• Evaluates on a regular basis the remuneration of Executive and Non-Executive BoD Members, as well as the senior
executive management;
• Makes a recommendation to the BoD, on an annual basis, regarding the remuneration of Executive and Non-Executive
BoD members for the coming period;
• Assesses the compliance of proposed variable remuneration schemes to current legislation, as well as their
consistency with the Company´s RAF and strategies;
• Assesses whether the p roposed remuneration packages for senior executives of the Company´s independent control
functions are compliant with the Group´s remuneration policy;
• Regularly monitors pay equality and presence of discrimination based on gender, age or Bank of origin;
• Reviews and proposes to the BoD the goals and objectives relevant to the CEO compensation and evaluate the CEO’s
performance in light of these goals and objectives.
How the Remuneration Committee discharged its responsibilities during 2023
• Reviewed and recommended to the BoD for approval: a) the Annual Variable Incentive Schemes for Performance Year
2022, b) the introduction of: i) the Retention Scheme for Senior Management, and ii) a Long-term Incentive Plan
(“LTIP”) to further enhance the Group’s ability to retain and attract talent in senior management levels; The Boston
Consulting Group, an external remuneration consultant with no relationship with the Company or with members of
the Board, has advised the Company on remuneration issues related to the LTIP, ensuring that parameters selected
are in accordance with international best practices, adhere to EBA guidelines and are compatible with the
organization’s other variable remuneration schemes.
• Reviewed and recommended to the BoD for approval the 2023 VES of the Group;
• Recommended to the BoD for approval the updated Identification Process of Material Risk Takers (“MRTs”);
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97
• Reviewed and recommended to the BoD for approval the Annual Remuneration Report for 2022;
• Recommended to the BoD for approval the update o f the Group and the Directors’ Remuneration Policies;
• Recommended to the BoD to request from the 2023 Annual GM to approve:
− the BoD’s remuneration paid for 2022 and the advance payment of 2023;
− the free distribution of common shares of the Company to executives and employees of the Company and its affiliated
companies within the meaning of Article 32 of Law 4308/2014, in accordance with the provisions of article 114 of Law
4548/2018 and the Direc tors’ and the Group Remuneration Policies;
• Recommended to the BoD for approval the terms and conditions of a five (5) year stock option plan (“Plan”) for
executives and employees of the Company and its affiliated companies within the meaning of article 32 of Law
4308/2014.
More information on the current composition of the Committee, its operation and responsibilities is available on the
Company’s website.
•
Nomination Committee
On 31 December 2023 and on the date of the authorization for issuance of the 2023 Annual Financial Report, the composition
of the BoD Members NomCo is as follows:
Board of Directors' Report – 31 December 2023
98
NOMINATION COMMITTEE
David Hexter
Chairman, Independent Non-Executive BoD Member
Member from February 2016 to July 2020|Chairman since: June 2021
Enrico Cucchiani
Vice-Chairman, Independent Non-Executive BoD Member
Member since: February 2017
Venetia Kontogouris
Member, Independent Non-Executive BoD Member
Member since: July 2020
Andrew Panzures
Member, Independent Non-Executive BoD Member
Member from July 2020 to July 2021 and reappointed since: June 2022
Karel De Boeck
Member, Independent Non-Executive BoD Member, Senior Independent Director
Ex officio Member since: December 2021
Alexander Blades
Member, Non-Executive BoD Member
Member since: February 2016
Periklis Dontas
Member, Non-Executive BoD Member, HFSF Representative
Member since: December 2019
71% Independent Non-Executive
29% Non- Independent
Governance - Operation
The NomCo is comprised of at least three (3) Members of the BoD. All members are non-executive with the majority being
independent non-executive. The HFSF Representative is a member of the Committee with full voting rights. The Senior
Independent Director serves as an ex officio member of the NomCo.
The NomCo ensures that the BoD possesses, as a body, adequate knowledge and experience in at least the main activities of
the Company in order to be able to exercise oversight over all its functions, either directly or indirectly through the various
BoD Committees set up mandatorily or at the discretion of the Company.
The Committee convenes as required on a need-to-meet basis but at least twice every calendar year. The quorum necessary
for holding a meeting is at least 2/3 of the total number of Committee members. Decisions of the Committee are taken with
the majority of the members present or represented at the meeting.
The NomCo held six (6) meetings during 2023. Members’ attendance rates in the Committee meetings are depicted in the
Board Members Participation in the BoD and the respective Committees table in section 2.6.
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99
Roles and Responsibilities
The NomCo is responsible for performing the duties set out in Greek Law and its Terms of Reference.
NomCo is, inter alia, responsible to:
• Identify and nominate suitable candidates to be proposed by the Board to the GM for election or re-election or as
replacements for Board positions which become vacant;
• Re-evaluate the independence of the incumbent independent non-executive Board members annually, by running an
appropriate independence review, to confirm compliance with applicable Greek corporate law and relevant EBA
guidelines;
• Review at least annually the structure, size and composition (including the aggregate skillset, knowledge,
independence, experience and diversity) of the Board and of its Committees, and make recommendations to the
Board with regard to any adjustments that are deemed necessary;
• Design the succession planning for the Board and top executive management in order to ensure Board and
Management continuity, and monitor its implementation;
• Adopt and periodically review a Director Suitability Policy for Board members;
• Adopt a Diversity Policy for Board members and review it on a biannual basis;
• Conduct an annual assessment of the effectiveness of the Board, the Board Chair and the Board Committees, which
shall be facilitated by an external consultant at least every three (3) years;
• Under the lead of the Board Chair, the Committee shall ensure that an annual performance evaluation is conducted
for the CEO and the other Board executives which will be reported to the Board;
• Adopt, periodically review and monitor the implementation of an Induction and Training Policy for Board members;
• Oversee the induction and training programs for members of the Board.
How the NomCo discharged its responsibilities during 2023
• Performed the self-evaluation process of the BoD and its Committees for 2022, with the support from an external
consultant (Nestor Advisors) and reviewed its results;
• Assigned the performance of a Board skills matrix and benchmarking exercise to an external consultant and reviewed
the results of the respective report;
• Reviewed and ensured that no conflicts of interest exist between the Company and the BoD;
• Assessed the independence criteria for Board Members;
• Assigned to a specialized consulting firm the search for new candidates to fill vacancies in the BoD taking into
consideration the strengthening of Boards skills and the enhancement of its diversity (2023-2025 Board Directors
Board of Directors' Report – 31 December 2023
100
Nomination Program);
• Reviewed the Succession Planning process of the Board Committees’ composition and discussed in detail the
succession planning of the Board Committees and the optimal Board size;
• Conducted and completed the CEO’s Evaluation for 2022 and the CEO’s Mid-Year Assessment for 2023;
• Reviewed and approved the updated CEO targets for 2023;
• Discussed and concluded on the Board Training initiatives for 2023 (4 training sessions were completed in 2023);
• Reviewed the attendance of the BoD Members for the previous year (2022) and the respective Attendance Policy;
• Submitted to the BoD its recommendations regarding the election of a new BoD (size, term of office, composition) as
well as the election of the Audit Committee members;
• Reviewed and approved the updated Directors Suitability Policy.
More information on the current composition of the Committee, its operation and responsibilities is available on the
Company’s website.
•
Board Ethics and ESG Committee
On the date of publication of the 2023 Annual Financial Report, the Committee’s composition was the following:
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101
BOARD ETHICS AND ESG COMMITTEE
Solomon Berahas
Chairman, Independent Non-Executive BoD Member
Chairman since: January 2024 and Member since: October 2021
Karel De Boeck
Member, Independent Non-Executive BoD Member
Member since: October 2021
David Hexter
Member, Independent Non-Executive BoD Member
Member since: October 2021
Venetia Kontogouris
Member, Independent Non-Executive BoD Member
Member since: October 2021
Enrico Cucchiani
Member, Independent Non-Executive BoD Member
Member since: October 2021
Alexander Blades
Member, Non-Executive BoD Member
Member since: October 2021
Maria Semedalas
Member, Independent Non-Executive BoD Member
Member since: February 2024
Periklis Dontas
Member, Non-Executive BoD Member, HFSF Representative
Member since: October 2021
75% Independent Non-Executive
25% Non- Independent
During 2023, the following changes were made to the composition of the Committee: Ms. Franscesca Tondi ceased to be Chair
of the Committee following her resignation from the BoD οn 17 November 2023.
During 2024 and until the date of publication of this Report the following amendments took place in the composition of the
Committee: Mr Solomon Berahas was elected by the BoD as Chairman to the Committee on 31 January 2024 .Ms. Μaria
Semedalas Independent Non-Executive Member was appointed member of the Committee on 22 February 2024.
Governance – Operation
The Committee consists of Non-Executive Board Members and Independent Non-Executive Board Members. The HFSF
Representative is a member of the Committee with full voting rights. Depending on the items of the agenda and, if deemed
necessary, other Group Executives may be present.
The Committee convenes following the Chairman's invitation, as many times as required necessary for the fulfillment of its
Board of Directors' Report – 31 December 2023
102
mission and at least quarterly.
The Committee meets with a quorum of at least half of its members (any decimal number is rounded to the next integer) and
decides by a majority of 2/3 of the present members.
Roles and Responsibilities
The main objective of the Committee is to support the Board and Board Committees by proactively setting, monitoring,
supporting and overseeing policies and strategies applied by Management, aiming at generating right values and culture, so
that the Company operates with moral integrity.
The Board Ethics and ESG Committee has, inter alia, the following responsibilities:
With regard to Ethics related policies:
• Submits recommendations to the Board with respect to any revisions to the Company's Code of Conduct;
• is informed by Compliance, in relation to significant revisions to the Conflict of Interest Policy and on matters of
policies regarding:
−
the fair treatment of customers (products and services design and suitability, sales processes, transparency of fees);
−
compliance with laws and regulations;
−
politically exposed persons;
−
related party transactions.
With regard to Sound Governance related topics:
• Reviews cases of alleged misconduct, relating to Board and Executive Committee members;
• Provides advice and makes recommendations to the BoD and Management on ethical matters;
• Provides advices to the NomCo regarding cases of conflicts of interest involving BoD members;
• Is informed by Group Internal Audit (“GIA”) on matters regarding the Whistleblowing framework;
• Is updated periodically on the Complaints and Grievances procedures, so as to encourage the fair treatment of
customers and the proper conduct of business.
With regard to Corporate Social Responsibility, community, environmental related topics:
• Makes recommendations to the Board and/ or relevant Board Committees with respect to the Strategy and policies
for the above matters;
• Is updated on the action plans and their progress by the pertinent Management Committee;
• Supports the NomCo, if requested, in the evaluation of the knowledge, competence and experience of the Board
Members in the area of ESG risks, in its assessment of the collective suitability of such members and to further arrange
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103
the education of the Board Members in relation to all the above;
• Oversees the process for the preparation of the Annual Sustainability and Business Report and makes
recommendations to the Board regarding the approval of the final report;
• Promotes best practices and ethical behavior considering interests of customers, personnel and society.
How the Board Ethics and ESG Committee discharged its responsibilities during 2023
• Was informed on the strategy on society and culture issues;
• Was informed on the energy transition project;
• Was informed about the Science Based Targets Initiative validation;
• Was updated on the Group’s MSCI ESG score;
• Was updated on environmental and climate risks of the Group;
• Was informed about the Greek energy transition landscape (opportunities and challenges);
• Was informed about the Group’s actions addressing critical social issues;
• Was updated on the communication strategy around social and cultural initiatives;
• Was informed on the development of a standardized KPIs framework for assessing social and cultural initiatives.
More information on the current composition of the Committee, its operation and responsibilities is available on the
Company’s website.
•
Group Executive Committee
On the date of the authorization for issuance of the 2023 Annual Financial Report, the composition of the Group Executive
Committee is as follows:
Board of Directors' Report – 31 December 2023
104
GROUP EXECUTIVE COMMITTEE
Christos Megalou
Chairman, Managing Director, CEO
Vasileios Koutentakis
Member, Executive Board Member, Executive General Manager, Chief Retail
Banking – Piraeus Bank
Theodoros Gnardellis
Member, Executive General Manager, Group CFO – Piraeus Bank
Charalampos Margaritis
Member, Executive General Manager, Group Chief Operating Officer (“COO”) –
Piraeus Bank
Ioannis Stamoulis
Member, Executive General Manager, Group CRO – Piraeus Bank
Panagiotis Vlachopoulos
Member, Chief Investment Officer – Piraeus Bank
Following BoD resolutions, Ioannis Stamoulis, Group CRO – Piraeus Bank and Panagiotis Vlachopoulos, Chief Investment
Officer – Piraeus Bank were appointed members of the Group Executive Committee on 4 May 2023 and 31 January 2024,
respectively.
Governance- Operation
The Group Executive Committee consists of senior executives of the Group and is chaired by the CEO, Executive Member of
the BoD.
In order for the Group Executive Committee to reach a decision, a quorum of at least 50% of its members present in person
either at the meeting location or at another location via teleconferencing is required. Decisions are taken with a 2/3 majority
of the members present and represented.
Roles and Responsibilities
Authorised by the BoD, the Group Executive Committee has, inter alia, the following responsibilities, which it may delegate or
assign to administrative Committees, Committee Members or Company executives:
• Monitors the implementation of both the Business Plan of the Company and the Group and makes the necessary decisions
for achieving the Plans' goals;
• Establishes the directions of the budget and proposes the Annual Budget to the BoD;
• Approves the introduction of new and significant changes to existing products and services of the Company, as well as
restructuring products, and defines their pricing policy before they are made available to clients;
• Approves the marketing strategy and monitors its implementation and effectiveness;
• Approves the Group's technological infrastructure strategy;
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105
• Approves HR programs (voluntary departure, fees, insurance and other contributions);
• Sets, within the range of its own approval limits, the approval limits of the Company's Management Committees and
executives.
More Information on the current composition of the Group Executive Committee and short Curriculum Vitaes of its members
(excluding those of Mr. Megalou and Mr. Koutentakis which are mentioned in a previous section of this Statement) are set out
below and are also available on the Company’s website.
Theodoros Gnardellis, Executive General Manager
Mr. Theodore Gnardellis (born 1975) joined Piraeus Bank in 2018.
He is Executive General Manager - Group CFO. He has also served
as Deputy General Manager, PLU Strategy (2018-2019).
In the past, he served as Chief Strategy and Transformation Officer
at NN Group, Greece (2017-2018), Head of Strategy &
Transformation at Emirates Islamic Bank, Un. Arab Emirates (2013-
2017), Chief of Staff, First Deputy Group Chief Executive Officer at
Bank of Cyprus, Greece (2010-2013), Associate Partner (2009-
2010), Engagement Manager (2007-2009) and Associate (2005-
2007) at McKinsey & Company, Greece, Aquatics Results Manager,
Olympic Games, Athens 2004 at ATOS Origin, Greece, (2002-2004),
Senior Associate Consultant, Mars & Co Consulting at MARS & Co,
Gr. Britain (2001-2002) and IT Engineer at the Ministry of
Development (1999-2000).
He holds a MEng in Computer Engineering & Informatics from the
University of Patras, Greece (1998) and an MBA from the Imperial
College, UK (2001).
Charalambos Margaritis, Executive General Manager
Mr Charalampos Margaritis (born 1972) joined Piraeus Bank in
2020. He is Executive General Manager – Group COO. He also
served as Group CIO (2020 – 2022).
In the past he served as Solutions Delivery Manager at Datamedia
(1997 - 2003), Head of Enterprise Applications Delivery at
Unisystems (2003 - 2008), Head of Group IT Architecture at
Eurobank EFG, (2008 - 2013), Head of Enterprise Architecture and
Analytics at Commercial Bank of Qatar (CBQ) (2013 - 2016), Chief
Technology Officer at Commercial Bank of Dubai (CBD) (2016 -
2018) and Chief Information Officer at Commercial Bank of Dubai
(CBD) (2018 - 2020).
Mr Margaritis was also a Member of the UAE Banking Federation IT
Committee (2018-2020).
He holds a B.Sc. in Physics, University of Athens, Greece and a B.Sc.
in Physics, Thesis titled “Superconductivity computer modeling”,
University of Portsmouth, UK. He also holds an M.Sc. in
Communication Systems & Networks, University of Athens, Greece
and he has done a Research towards a Ph.D. titled “Security
Board of Directors' Report – 31 December 2023
106
4. Internal Control System (ICS) and Risk Management
Piraeus Group has developed and continuously improves its ORMF and its ICS. The development and continuous improvement
of the ORMF / ICS is a key objective of the BoD and the Senior Management.
framework for extended enterprises”, University of Athens.
Ioannis Stamoulis, Executive General Manager
Mr Ioannis Stamoulis (born 1975) joined Piraeus Bank in 2007. He is
Executive General Manager – Group CRO and he also served as
Senior Manager, Retail Credit Risk Division (2007–2011), Senior
Director, Group Credit Risk Division (2011-2017) και Deputy CRO
(2017-2020).
In the past he provided Consulting Services at Quantos Ltd. (2002 –
2003), he was Head of the Greek Office at Statistical Decisions Ltd
(2003–2006) and held the position of Senior Officer of Collections
Division at National Bank of Greece (2006–2007).
He holds a B.Sc. in Mathematics, Aristotle University of Thessaloniki
(1996), a M.Sc. in Statistics, Athens University of Economics &
Business and Catholic University of Leuven (1999) and he also
fulfilled the Transition to General Management Program at INSEAD,
France (2017).
Panagiotis Vlachopoulos, Chief Investment Officer
Mr Panagiotis Vlachopoulos (born 1968) joined Piraeus Bank in
2023. He is Chief Investment Officer.
In the past he held the position of Head of Strategic Positioning in
the Global Macro investment team at Canada Pension Plan
Investment Board (2018 - 2022) and Senior global macro portfolio
manager at Moore Capital (2015 - 2018). He also served at
JPMorgan, Chief Investment Office in London (2007 - 2015), at Old
Lane in the sector Macro Trading & Commodities (2006 - 2007) and
at Trident Group in the sector Macro Trading (2005 - 2006). Mr
Vlachopoulos was Treasurer at EFG Group (2003 - 2005), Managing
Director at Merrill Lynch (1997 - 2003) and he served at Salomon
Brothers (1994 – 1997).
He holds a Diploma/MSc in Mechanical Engineering, National
Technical University, Athens (1991) and a MSc in Environmental
Engineering, Stanford, USA.
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ICS is a set of recorded and documented control mechanisms and processes that integrates best practices of corporate
governance and covers on an ongoing basis every activity and transaction, contributing to the organization’s pursuit of
objectives. It provides reasonable assurance that the Group will maintain efficient and effective operations, contain risks to
acceptable low levels, safeguard its assets, produce reliable financial reporting and comply with applicable laws and
regulations. The Management has decided to adopt COSO (Committee of Sponsoring Organizations) framework in
implementing the ICS. Other standards, such as PCAOB (Public Company Accounting Oversight Board) and COBIT (Control
Objectives for Information and Related Technologies) can be used as guidance in implementing specific controls. The
Operational Risk Management (“ORM”) and internal control framework are reviewed on a regular basis.
A sound ICS incorporates five components that are integral to the risk and control environment:
• Control environment;
• Risk assessment;
• Control activities;
• Information and communication, and
• Monitoring.
The ORM and Internal Control framework includes the following main components:
• The Risk and Capital Strategy : The Risk and Capital Strategy constitutes the cornerstone of the RM Framework aiming
to define the principles, according to the BoD’s guidelines, of a comprehensive RM Framework, which ensures
effective risk and capital management processes and promotes risk and control culture and awareness across the
Group;
• The Organizational Structure: The ORM and internal control organizational structure depicts the roles and
responsibilities of all parties involved as well as the reporting lines and the resources required;
• Policies, Methodologies and Processes regarding the:
▪ Identification, assessment, measurement, mitigation, monitoring and reporting of OR;
▪ Establishment, allocation and monitoring of suitable OR appetite limits;
▪ Establishment of the main principles on Information Communication Technology (“ICT”) RM (via the
overarching ICT risk policy and the core ICT risk policies);
▪ Identification, assessment, monitoring and reporting of internal controls and ICS effectiveness;
▪ Assessment of OR exposure level;
▪ OR incidents and losses data collection and management;
▪ Calculation of OR VaR and capital requirements (Pillar I, II, III);
• The required Infrastructure regarding:
▪ IT systems and infrastructure required to support risk and control assessment and management, internal loss
data collection, centralized data repository, regulatory and internal reporting etc.
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Operational Risk Management and Internal Control Objectives
Piraeus Group, through the development and implementation of the ORM and internal control framework, aims at:
• Establishing a strong ORM and internal control corporate culture that supports and provides appropriate standards
and incentives for professional and responsible behavior, throughout the Group;
• The timely and thorough identification, assessment, measurement, mitigation, monitoring and reporting of OR and
potential impacts in all Group’s business activities, products, processes and IT systems;
• Establishing an OR measurement framework to support risk assessment, monitoring, reporting, limit setting and
allocation;
• Adjusting to an evolving risk landscape to timely address and manage emerging risks that the Group is exposed to,
i.e., ICT risks, cyber security risks, by introducing and incorporating into the existing framework additional controls to
monitor these risks effectively (e.g., governance structures, key risk indicators (“KRIs”), risk-specific policies and
procedures);
• Maintaining and enhancing processes to monitor OR profile and material exposures. The associated risk-reporting
framework conveys timely, complete and accurate information on actual and potential risks to support proactive
management of OR;
• An adequate, documented ORM and internal control framework that mitigates impacts or reduces occurrence
frequency of OR, providing at the same time, reasonable assurance for the ICS effectiveness and the achievement of
the organization’s strategic, business, operating, compliance and reporting objectives;
• Allowing Management to enable the full potential of the organization by containing OR and making decisions based
on reliable and comprehensive risk information.
Operational Risk Management and Internal Control Governance
The Group aims to establish ORM/internal control as an integral part of every process and activity. All employees should
perform their duties taking into consideration the risks generating, the risk mitigation responses as well as timely
communication of risks to the competent bodies.
ORM and internal control governance is organized in two main dimensions that generate a governance matrix in which all
management bodies, Committees and Units are allocated according to:
• The LoD where their activities belong to;
• Their hierarchical level upon which these activities take place.
More specifically, the first governance dimension comprises three LoD, as follows:
The 3LoD model has been adopted. Units are allocated to distinct LoD based on their role and responsibility in the ORM and
internal control framework. Independence among different LoD is ensured, in order for OR and control processes to operate
as intended.
• Units belonging to the 1st LoD are the risk and control owners. They are responsible for the RM and internal controls
in their respective areas. The CEO as well as the committees with responsibilities falling under the 1st LoD perform
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such activities at the tactical level, while the BoD and its Committees perform respective activities at the strategic
level;
• Units belonging to the 2nd LoD have a guidance, review and challenge role on the work of the Units of the 1st LoD.
The units/functions belonging to the 2nd LoD are the RM and Compliance. The Group Risk and Compliance Officers
with responsibilities falling under the 2nd LoD perform such activities at the tactical level, while the BoD and its
Committees perform respective activities at the strategic level;
• Internal Audit forms the 3rd LoD and is responsible for providing reasonable independent and objective assurance to
the BoD on the effectiveness of governance, RM and internal controls. Internal Audit performs independent audit/
assessment (ex-post) of the overall RM and internal control framework of the Group and reports any audit findings
and recommendations as well as pending and closed issues to the Management and Audit Committee of each entity
at the Group. The Chief Audit Executive with responsibilities falling under the 3rd LoD performs such activities at the
tactical level, while the BoD and its committees perform respective activities at the strategic level.
It is noted that the committees may engage in ORM and internal control activities, which belong to more than one LoD.
The second governance dimension is comprised of three levels:
• Strategic level (BoD / BoD Committees): RM functions performed by the BoD. They are assigned with the
responsibility to provide guidelines, monitor and supervise the establishment and implementation of the ORM and
internal control framework;
• Tactical level (CEO / Executive, Administrative and other Committees and Councils / CRO / CCO): RM functions
performed by the Senior Management. They are assigned with the approval of policies and processes for identifying
and managing OR and establishing adequate systems and internal controls to ensure that the overall risk profile
remains within the RAF or other strategic limits appropriately approved by the BoD, as well as any regulatory
restrictions;
• Operational level: RM functions performed by all units, i.e. business units including units with primary role in
decision-making process, support units as well as the units of RM, Compliance and Internal Audit. RM, at this level, is
implemented by means of appropriate internal controls incorporated into the relevant operational procedures and
guidelines approved by the BoD or the Senior Management.
Under the current institutional framework, the ICS is supported by an integrated communications and Management
Information System, also by inter-complementary mechanisms, forming an integrated system for controlling and auditing the
Company and its Group organizational structure and operations.
The Audit Committee of the Company monitors and evaluates on a yearly basis the adequacy and effectiveness of the ICS at a
Company and at Group level, based on the relevant data and information of the GIA Unit, Compliance and the findings and
observations of the statutory auditors and supervisory authorities.
Periodically and at least every three years, upon recommendation of the Audit Committee, an independent chartered public
auditor, other than the Group and the Bank’s external statutory auditor, is appointed to assess the adequacy of the ICS.
In March 2023, Grant Thornton presented to the Audit Committee members the scope, findings and methodology followed for
their assessment of the adequacy of the ICS of the Company for the period from 17 July 2021 to 31 December 2022 in
accordance with the BoG Governor’s Act 2577/9.3.2006 (“the BoG Act”) and respective provisions of Law 4706/2020. Based
on the work performed, there were no indications that the ICS, at the given time of the assessment, was not in compliance
with all material aspects of the requirements of the BoG Act. Furthermore, n othing has come to Grant Thornton’s attention,
which would lead to the conclusion that material weaknesses exist with respect to the ICS adequacy of the Company, as of 31
December 2022.
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RM and ICS with respect to financial reporting
The ICS sets out mechanisms and procedures relating to the activities of the Company on a stand alone and on a consolidated
level in order to ensure complete and reliable data required for the preparation of reliable Financial Statements.
The accounting policies are in conformance with the IFRS and are followed with consistency throughout the preparation of the
Interim and the annual financial statements.
The Audit Committee:
i. supervises, evaluates and reviews the financial statements reporting process of the interim and annual separate and
consolidated financial statements of the Company and the Group, in order to ascertain the presentation, accuracy
and completeness of the information contained in them and expresses its opinion;
ii. reviews the adequacy and effectiveness of internal controls over financial reporting and disclosures, taking into
consideration any significant deficiencies identified by either the statutory auditor, the internal audit function or any
regulatory or other competent authority, while monitors the remediation actions undertaken by the Management;
iii. reviews and discusses the representation letter requested from Management by the statutory auditors.
Based on the assessment of the results of the above review, the Audit Committee recommends to the BoD the approval of
the Interim and annual financial statements.
The Group Finance Division regularly updates the Audit Committee on significant or unusual transactions occurring within the
reporting period having significant impact on the financial statements and relevant disclosures, significant adjustments,
Management’s estimates for the recognition of provisions, consistency of, and any changes to, significant account ing policies
and critical accounting estimates and legal matters which might have a significant impact in the financial statements.
Group Internal Audit
The Internal Audit function within the Group is carried out exclusively by the GIA unit of the Company with the support of
Group Internal Audit of Piraeus Bank (“GIA-PB”). The IAUs Officers which operate in the Group's subsidiaries in Greece and
abroad as well as the GIA-PB have their own Charters, which are in alignment with the Group’s Charter and adapted to the
respective legal and regulatory requirements.
The main mission of GIA unit is to provide reasonable, objective and independent assurance regarding the adequacy and the
effectiveness of the Group’s ICS. Moreover, it contributes to the protec tion and enhancement of the economic value of the
organization as well as the accomplishment of its objectives by bringing a systematic and professional approach to evaluate
and improve the effectiveness of governance, RM , and control processes.
GIA unit exercises high supervision of GIA-PB’s activity, while is overall responsible for the entire Internal Audit function of the
Company and the rest of its subsidiaries. In this respect, GIA unit and GIA-PB are responsible for supervising and coordinating
the activity of the IAUs of their Group's subsidiaries respectively.
The Head of GIA unit (Chief Audit Officer – “CAO”) reports periodically to the Senior Management and the Audit Committee
the conformance of the Unit with the Code of Ethics and the Standards. CAO reports functionally to the BoD through the Audit
Committee and administratively to the CEO.
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GIA unit:
• Is administratively independent from other Group units and abstains from any executive and operational responsibilities;
• Occupies full-time and exclusive staff, which does not subordinate to any other Group unit.
GIA unit assesses, inter alia:
• Whether the risks related to the achievement of the strategic objectives are identified and managed in an appropriate
manner;
• Whether the established policies and procedures are consistent with the Group’s risk strategy as well as the Management’s
decisions;
• Whether the staff actions comply with the established policies, procedures and the general corporate governance
framework, as well as regulatory and legislative framework in force;
• Whether operations are carried out effectively and (if auditable) efficiently;
• The adequacy, quality and effectiveness of the control mechanisms as well as the reports produced by Business Units,
Control Units, RM and Compliance;
• Whether financial or non-financial information and the data used to identify, measure, analyze, classify, and report it are
reliable, accurate and complete;
• Whether resources and assets are managed safely.
GIA unit also provides recommendations on the prevention and detection of fraud.
The CAO issues reports to the auditable units, incorporating the audit results and findings resulting from the audits performed,
integrating the corrective actions for strengthening the control environment and the corporate governance framework, as well
as improving the effectiveness of RM processes. The audit reports are appropriately communicated to the Senior Management.
In addition, the CAO submits reports at least every three (3) months to the Audit Committee, including the significant findings
and the remedial actions within its duties, which the Audit Committee presents and submits to the BoD along with its
comments.
The Audit Committee, the BoD and the Senior Management ought to safeguard:
• The independence of the Internal Audit and the resolution of any issue related to its independence;
• The provision of adequate and prompt updated information to the Internal Audit through relevant procedures and
mechanisms, especially in case of significant problems and emergencies;
• The adequacy of the internal control tools and risk assessment methods of GIA unit, considering the size, nature, scope
and complexity of Group as well as the risks associated with Group’s business model, activities and cultur e.
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The Internal Auditors:
• Have unimpeded access to all activities, units and sites, as well as to any data and information (documents, records,
business emails, accounts, portfolios, systems, applications, minutes of meetings of all type of Committees and
Bodies, etc.) of the Group;
• May communicate unimpededly with any executive, body and staff of the Group using all available means (e.g.
meeting, email, conference call, video conference);
• May request and receive the written position/opinion/statement from any Group’s audited execut ive, senior officer,
or employee within the scope of their audit;
• May request and receive from any source (e.g. staff, systems, physical archives etc.) all information, data and
explanations required for carrying out their audit mission using all available means. In the case of highly confidential
or sensitive information, only the CAO is notified.
The BoD, the Audit Committees and the Senior Management of the Group’s subsidiaries ensure that the required information
is provided immediately to the internal auditors by the individual units.
The auditors may participate through their advisory role, upon request of the Management, in various stages of the
development of processes, policies, procedures and information systems and significant internal projects, generally providing
their opinion on the on-going improvement and development of an adequate ICS. This participation as well as the respective
results, are not considered an audit engagement.
Such consulting activity is conducted given that the objectivity and the independence of GIA unit are not impaired.
The planning of audit engagements is the outcome of a risk assessment process. Additionally, the Audit Cycle, within which
the audit areas are covered depending on the significance of the respective risk, is determined, giving priority to high-risk areas.
Also, the Audit Cycle is approved and amended only upon decision of the BoD of the Company, following the recommendation
of the Audit Committee.
The Annual Audit Plan incorporates the subsidiaries that are going to be covered within the reference year, the annual audit
targets, the scheduled audit engagements on Group's activities and on critical outsourced activities, the needs in terms of audit
staff, the transportation costs, the training plan and the related costs, the assessment on the coverage of the Group's activities
according to the significance of the respective risks as well as the budget. The Annual Audit Plan should also take into account
the execution of unforeseen engagements following respective requests by the regulatory authorities, the Audit Committee
and the Senior Management as well as any other reason that may be deemed valid by the CAO.
The Company expects from GIA unit staff to demonstrate good faith, sound judgment and due diligence while exercising their
duties. Internal auditors ought to comply with the Company’s Code of Conduct, Internal Audit Charter and the International
Standards for internal auditors. The strict adherence to the operational framework contributes to the achievement of internal
audit function’s consistency, cohesion, stability and reliability.
Internal auditors are expected to apply and uphold the following principles:
• Integrity
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• Objectivity
• Confidentiality
• Competency
Risk and Compliance at the Company
Risk Management
The Company places particular emphasis on the effective monitoring and management of risk, at Company and Group level
with a view to maintain stability and continuity in its operations. In this context, the competent bodies of the Group regularly
monitor and assess the Group Business Strategy by defining, monitoring and managing risk and distinguish transactions and
customers by level of risk. The Group competent bodies determine the appropriate maximum acceptable limits of risk-taking
overall by each type of risk, refining each of these limits; set limits for discontinuing loss-making activities and take other
corrective actions.
The Company also assures the establishment and implementation of reliable, effective and comprehensive policies and
procedures in order to assess and maintain on an ongoing basis the amount, composition and distribution of its equity, that
the Group management each time deems adequate to cover the level and nature of risk it undertakes or might undertake. The
Company’s RM internally reviews these policies and procedures on a regular basis to ensure that they remain comprehensive,
adequate and proportionate to the nature, extent and complexity of the Group’s current activities.
The Company’s Risk Officer is independent with direct reporting to the Risk Committee of the Company to which he/she
provides unbiased risk oversight and update on the level and the management of risks, the compliance with the adopted risk
policies, the risk assessment results, the functioning of the RM and response processes to the identified risks and the results
of the risk monitoring process. The Company’s Risk Officer is designated by the BoD as the Executive Secretary of the Risk
Committee.
Compliance
The Company’s Compliance follows the international best practices to ensure that the Group complies with the applicable legal
and regulatory framework. The Company’s Compliance Officer is independent with direct reporting to the BoD and Audit
Committee of the Company to which he/she provides unbiased compliance oversight, update on the latest changes of the
regulatory framework, on the level and the management of the compliance risk, the adopted internal policies implementation
status, the level of the Compliance Annual Plan and Policy implementation. He/she is selected by the Senior Management,
possesses sufficient knowledge and experience and has unrestricted access to all data and information necessary to carry out
his/her duties.
The Company’s Compliance is, inter alia, responsible for:
• The establishment and the implementation of the appropriate procedures and policies, the preparation of the Annual
Compliance Plan and the regular monitoring of the level of its implementation, in order to achieve the timely and
continued compliance of the Company with the current regulatory framework provisions and the provisions of the
Compliance Policy;
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• The assurance that the Company and its subsidiaries comply with the applicable legal and regulatory framework that
governs the preventing of the use of the financial system for money laundering and terrorist financing;
• The provision of information and update to the Audit Committee and BoD on compliance issues through its quarterly and
ad hoc reports;
• The assurance that the Company’s staff is co ntinuously informed on developments related to the regulatory framework
and the policies related to their duties, by establishing appropriate procedures, updates and training programs in
collaboration with the Group HR;
• The monitoring, identification and effective management of compliance risks and the assessment of non-compliance risks.
5. Other governance issues
5.1 IT security risks
The Group and the Company face significant IT security risks (including cyber security) from the growing dependence on
information and integrated information systems. The growing systems’ interfaces with clients and third parties, the ongoing
organizational and technological changes imposed by business needs, the daily appearance of new technological and other
internal and external factors, create a critical threat environment.
Information and telecommunication Systems are critical components for the achie vement of the Group’s and the Company’s
business objectives and strategies and decisively contribute to the implementation and management of its business functions.
The use of networks and systems creates several risks, especially in regards to security of the data being routed. In order to
protect confidentiality and ensure availability and integrity of data and systems, the Group has designed and implemented a
strict and comprehensive Information Security Framework aiming to govern its IT assets. The Information Security Framework,
which is applied to the whole Group wherever applicable, also ensures that the appropriate compliance and regulatory
requirements are implemented, and their efficiency and effectiveness is closely monitored.
In order to minimize the aforementioned risks and protect its IT assets, management has designed and implemented strong IT
security controls in order to create peripheral protection in a multi-layer architecture. These controls include but are not limited
to the following areas:
• Design, development, implementation and monitoring of an Information Security Framework;
• IT Security Strategy and Policy;
• Regular awareness and training campaigns (including e-learning programs) on cyber security issues to all personnel;
• Developing and testing of a Security Incident Response Mechanism;
• Performance of periodic Risk Assessment and Data Classification on Information Assets;
• Performance of a large number of penetration tests and vulnerability assessments;
• Continuous review and monitoring of the effectiveness of security controls;
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• Strict User Access Management policies and procedures over applications, operating systems and databases;
• Implementation of a Centralized User Access Management Provisioning System (IAM);
• Implementation of special security mechanisms in order to manage, log and monitor, privileged access rights;
• Change Management processes governing changes to applications and systems;
• Use of a sophisticated Security Operations Centre (“SOC”) which is monitoring system logs on a 24/7 basis;
• Anti DDoS protection system;
• Internal and external Firewalls;
• IDS and IPS systems;
• Network Segmentation;
• Web Applications Firewalls;
• AntiVirus and AntiSpam systems;
• Web filtering and internet access control systems;
• Maintenance of international security standards and certifications (such as PCI DSS, ISO 27001 and Swift Security
Controls Framework).
In addition to the above, the Group has an effective Disaster Recovery Plan activated in case of catastrophic events as well as
an Alternative Data Center that can support, if required, the full operation of the Group. The Disaster Recovery Plan is tested
on a regular basis.
5.2 ESG governance
The Group has established a concrete governance structure, factoring sustainability and the guidelines of the Principles of
Responsible Banking into its everyday operational and business model. The following ESG governance structure provides
leadership on ESG matters, increasing effectiveness, efficiency and accountability The Group strives to be a banking leader in
building a sustainable future for the Company, employees, customers, shareholders, society, and the environment.
BoD: Responsible for ensuring a business model, governance arrangements, including a risk management framework that takes
into account all risks, including climate-related and environmental risks and the implications of the transition to a more
sustainable economy as well as exercising effective oversight of same. In discharging the aforementioned responsibilities, it is
supported by the BoD Committees which report regularly to the BoD on issues related to their responsibilities.
Audit Committee: Responsible for overseeing the integrity of the Group’s financial and non-financial/ESG disclosures within
the Annual Report. It monitors the effectiveness of the ICS and RM systems and of the Internal Audit function, also with respect
to ESG-related issues (e.g. fraud, whistleblowing, violence and harassment, etc.).
Risk Committee: Responsible for advising and supporting the BoD regarding the mo nitoring of the Group’s overall actual and
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future risk strategy and risk appetite, taking into account all types of risks (including climate and ESG risks), in order to ensure
that they are in line with the business strategy, objectives, corporate culture and values of the Group. The Committee has
responsibility to oversee the implementation of the Group’s risk strategy and the corresponding limits set and to review a
number of possible scenarios, including stressed scenarios, to assess how the Group’s risk profile would react to external and
internal events. In 2023, the Risk Committee reviewed the 2023 Risk Identification Annual Report, including the Group’s
strategic approach on the front of climate-related and environmental risks and opportunities. It subsequently approved the
2023 Risk and Capital Strategy and RAF.
Remuneration Committee: Responsible for ensuring that the Group remuneration policy is consistent with the objectives of
the Group’s business and risk strategy, including ESG risk-related objectives, corporate culture and values and long-term
interests of the Group. The Committee has responsibility for aligning executive directors’ and senior management’s
remuneration with strategic priorities, including in relation to climate and sustainability matters. In 2023, following respective
proposal of the Remuneration Committee to the BoD, an amended version of the Directors’ Remuneration Policy was approved
by the 2023 Annual GM of Shareholders.
Board Ethics and ESG Committee: Responsible for considering the material ethical and ESG issues relevant to the Group’s
business activities and for supporting the Group in maintaining its position as a reference leader in ethical and ESG
(environment, society, governance) issues. The Committee works closely, also by holding joint sessions, with the other Board
Committees for ESG issues which are also related to their mandate. It is furthermore supported in its work by respective
management committees of the Group, namely the ESG and Corporate Responsibility Committee of the Bank.
For the discharge of responsibilities of the Committee in 2023, refer to the respective section of this Statement.
The Bank follows a similar ESG governance structure at BoD and BoD Committees level with the exception of the BoD Ethics
and ESG Committee which is only established at the parent company.
ESG special governance arrangements and related actions for the reporting year at the Bank include:
• On a monthly basis, a risk appetite monitoring report (CRO Statement Appendix | RAF Monitoring) is submitted to the
Bank’s Risk Committee, including ESG and climate-related indicators established in the 2023 RAF;
• A special sub-section “ESG Risks” has been created in the structure of the Bank’s Risk Committee agendas, reflecting the
importance and the frequency these issues are expected to have in the BoD Risk Committee’s work;
• ECB Climate Stress Test.
ESG and Corporate Responsibility Committee (Piraeus Bank): In the context of the enforcement and coordination of
management commitment to ESG purpose, the ESG and Corporate Responsibility Committee is established at the Bank. The
Committee is chaired by the Group’s CEO and is composed by all members of the Bank’s Executive Committee and two
additional members, the Group General Counsel and the Bank Head of Group Cultural and Social Initiatives. The composition
of the Committee, reflects the prominent role the management of the Group is expected to play in shaping the Group’s
approach to managing sustainability issues and integrating the Climate & ESG criteria into the Bank's strategy, recognizing that
this is a key factor in ensuring long-term success and reflecting the fact that these issues are becoming materially relevant to
the Group as well as to key stakeholders, such as clients, shareholders and regulators.
The new Committee is the management level “mirror” of the BoD Committee for ESG & Ethics matters, aiming to ensure the
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existence of a holistic Group ESG and Corporate Responsibility strategy plan with tangible and defined medium and long-term
goals.
The purpose of this Committee is to promote and monitor Responsible and Sustainable Banking by adopting ESG criteria that
combine growth and economic performance with culture, social well-being and environmental sustainability. The Committee
ensures the existence of a holistic ESG strategy plan for the Group, with axes:
• the energy transition;
• the zero balance of CO2 emissions (net zero);
• the strengthening and promotion of culture;
• the support of women, children and young people, as well as vulnerable social groups in matters of education,
employment and social stereotypes;
• the promotion of governance principles with an emphasis on diversity and inclusion.
Specifically, the Committee assesses, approves, recommends and monitors:
• ESG policies and strategies that harmonise the Group’s governance and business decisions with the UN SDGs;
• actions that contribute to the management and adaptation to the regulatory requirements on climate and environmental
risks and to the reduction of the environmental footprint of both the Group and its clients / partners;
• the implementation of the Group’s values and the creation of a culture that strengthens the role of employees in achieving
the Principles of Responsible Banking;
• programmes, collaborations, initiatives that promote culture and boost social cohesion;
• actions that reinforce transparency, meritocracy and corporate responsibility and strengthen the Group’s extroversion.
In this context, it monitors Corporate Responsibility & ESG issues and informs and/or makes recommendations to the BoD and
ESG and Ethics Committee of the Company.
The Committee meets regularly at least on a quarterly basis and on an extraordinary basis whenever required at the invitation
of its Chairman.
More information on ESG related issues are/will be included in the Company’s Sustainab ility Report and other ESG disclosures.
6. Information provided pursuant to Directive 2004/25/EU of the European Parliament and Council
The information of Directive 2004/25/EU of the European Parliament and Council, required pursuant to para.1 d) of art. 152
of Greek Law 4548/2018 are included in the Explanatory Report to the Annual GM of the Shareholders, which is a special
section of the BoD’s Report.
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7. Information according to article 10 of Law 4961/2022 on “Emergi ng information and communication technologies,
strengthening digital governance and other provisions”
Data ethics is about the responsible and sustainable use of data. Ethical data management involves transparency and
accountability in decisions and processes involving the use of data, as well as promoting the values of respect, integrity, and
justice.
The principles that define the use of data within the Group from an ethical point of view and aim to promote a healthy and
ethical data culture within the Group and outside it, in business relationships, are summarized below:
• The Group takes all necessary steps to comply with the provisions of the current legislation on the protection of banking
secrecy and the personal data it collects and processes (e.g., data resulting from the drawing up of a contract, financial
behavior data, CCTV images, telephone conversations, etc.);
• All customer and employee information is used to carry out the purposes for which it was collected and processed or
for other reasons permitted by law;
• The Group is legally processing personal data, provided that this process:
−
is necessary for servicing, supporting and monitoring business transactions and proper execution of any
agreements between the data subject and the Company/ Group;
−
is necessary in order for the Group to comply with any legal obligations or for the purposes of the legitimate
interests pursued by it;
−
is necessary for the performance of a task carried out in the public interest, in the context of the current legislative
and regulatory framework;
−
is based on prior explicit consent of the data subject, if processing is not based on any of the aforementioned legal
processing bases;
• During systems and processes designing, ensures that data is used in a responsible manner and is aware of the effects
that the use of data may have on employees, customers, shareholders, and society;
• The Company / Group, in compliance with the current legislative framework, has taken all the necessary actions,
applying the appropriate technical and organizational measures for the legal observance, processing and safe keeping
of the personal data file, committing to ensure and protect in every way the processing of personal data from loss or
leakage, alteration, transmission or their unlawful processing in any other way, while maintaining a register of artificial
intelligence processing systems;
• All employees of the Group are obliged to protect the personal data of the customers from other people's use and to
protect their interests;
• In case of outsourcing of activities to third parties by the Group, all necessary measures are taken, in accordance with
the current legislative framework, to protect the data subjects during the processing of their personal data;
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• With the exception of the cases in which the legal conditions for the possibility of providing information concerning
them to third parties are met, employees demonstrate due diligence and the required confidentiality when using
information that comes to their knowledge at any stage of the provision of their services, before, during or after the
termination of the contractual relationship and take every reasonable and feasible measure to legally and securely
maintain the information, in accordance with the applicable legislation.
Athens, 27 February 2024
Non-Executive
Chairman of BoD
Managing Director (CEO)
Executive BoD Member
George P. Handjinicolaou
Christos I. Megalou
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EXPLANATORY REPORT
This explanatory report of the BoD of the Company is addressed to the Ordinary GM of its Shareholders and contains detailed
information on the matters of paragraph 7 of article 4 of Greek Law 3556/2007 with reference date the 31 December 2023.
1. Structure of the share capital of the Company
On 31 December 2023 the Company’s share capital amounted to one billion one hundred sixty-two million eight hundred forty-
one thousand five hundred seventeen Euros and thirty-nine cents, (€ 1,162,841,517.39) divided into one billion two hundred
fifty million three hundred sixty-seven thousand two hundred twenty-three (1,250,367,223) ordinary registered voting shares
with a nominal value of ninety-three cents of Euro (€ 0.93) each. The ordinary shares of the Company are dematerialized and
listed on the Athens Stock Exchange.
Subject to the provisions of Greek Law 3864/2010 setting forth special rights and restrictions for the ordinary shares held b y
the HFSF (see details below under 4 and 5), each ordinary share of the Company incorporates all the rights and obligations
stipulated by Greek Law and its Articles of Association, and especially:
 The right to participate and vote in the GM of shareholders;
 The right to receive dividend from the Company’s annual profits;
 The right to receive a pro rata share of the Company’s net liquidation proceeds or all or part of the nominal value of any
shares in the event of a total or partial redemption of the Company’s share capital pursuant to a relevant resolution of the
GM of the Company’s shareholders. The GM of the shareholders retains all of its rights during the liquidation procedure;
 A pre-emptive right in each increase of the Company’s share capital in cash and issuance of new shares unless the GM
resolves otherwise;
 The right to receive prior to the Ordinary GM copies of the Annual Financial Report.
2. Restrictions on the transfer of shares of the Company
Transfer of the Company’s ordinary shares is carried out as prescribed by Greek Law. The Company’s Articles of Association do
not impose any restrictions in respect thereof.
The disposal of the shares held by the HFSF is subject to the provisions of art. 8 of Greek Law 3864/2010, as in force (codified
text of the law is available in HFSF’s website, https://hfsf.gr/en/how-we-decide/hfsf-law-as-in-force/) and is based on a
divestment strategy with a specific time horizon of definite and full implementation which is determined in accordance with
art. 8 and in principle does not extend beyond the HFSF’s termination, i.e. 31 December 2025.
3. Significant direct and indirect shareholdings within the meaning of Greek Law 3556/2007
On 31 December 2023 the HFSF directly held a total of 337,599,150 ordinary shares of the Company representing 27% of the
total voting rights of the Company.
Furthermore, on 31 December 2023, pursuant to the notifications received by the Company according to Law 3556/2007:
 Mr. John A. Paulson held indirectly through Paulson & Co. Inc., a company controlled by him, 232,758,919 common
registered shares with equal voting rights, corresponding to 18.62% of the Company’s total common shares. Paulson & Co.
Inc. is the investment manager of the funds that hold directly the shares in the Company and as manager it exercises the
Board of Directors' Report – 31 December 2023
121
voting rights on behalf of the funds.
 Helikon Investments Limited held indirectly through Helikon Long Short Equity Fund Master ICAV:
- 54,373,407 voting rights attached to an equal number of common, registered, voting, dematerialized shares (i.e. 4.348%
of the total voting rights of the Company) and
- 29,607,188 (i.e. 2.368% of the total voting rights of the Company) and 33,271,381 (i.e. 2.661% of the total voting rights
of the Company) voting rights deriving from financial instruments (cash settled equity swap), according to ar. 11 para. 1b)
of law 3556/2007, as in force, with expiration dates 4 February 2025 and 4 November 2024 respectively.
As a result, the voting rights held indirectly by Helikon Investments Limited, deriving from common shares and financial
instruments (cash settled equity swap), amount in total to 117,251,976 or 9.377% of the total voting rights of the Company.
Pursuant to the records kept by the Company, as at 31 December 2023 no other shareholder (individual or legal person) holds
on an individual basis (directly or indirectly) more than 5% of the total number of ordinary shares of the Company.
4. Shares granting special control rights
With the exception of the ordinary shares held by the HFSF, which carry the rights arising from the provisions of Greek Law
3864/2010 and the RFA between the Company, Piraeus Bank S.A. and the HFSF, there are no shares of the Company granting
special control rights to their holders.
The ordinary shares held by the HFSF in the share capital of the Company carry the special rights of Article 10 of Greek Law
3864/2010, as amended and in force, including:
 the right of the HFSF to be represented with one member on the BoD. The Representative of the HFSF has the right:
a)
to veto any decision of the Company’s BoD:
i) in respect of the distribution of dividends and the remunerations and bonuses policy for the Chairman, the
Managing Director and the other members of the BoD, as well as for those persons holding the position of or exercising
the duties of general managers as well as their deputies when the ratio of NPEs to total loans of the credit institution,
as calculated according to item (ii) of case g of paragraph 2 of article 11 of Commission Implementing Regulation (EU)
2021/451 of 17 December 2020, exceeds 10%. It is noted that this provision is not currently applicable to the Company;
ii) in respect of decisions to amend the articles of association, including the increase or decrease of capital or the
provision of relevant authorization to the BoD, merger, division, conversion, revival, extension of the duration or
dissolution of the Company, transfer of assets, including the sale of subsidiaries, or for any another issue requiring an
increased majority in accordance with the provisions of Law 4548/2018 and which decision is likely to significantly
affect the HFSF's participation in the share capital of the Company;
b)
to request an adjournment of a Board meeting for three (3) business days in order to receive instructions from the CEO
of HFSF. This right may be exercised until the end of the relevant BoD meeting;
c)
to request that the BoD of the Company is convened;
 the right to access the books and records of the Company through executives and consultants of its choice for the purposes
of the effective disposal of the shares or other financial instruments it holds in the Company.
Board of Directors' Report – 31 December 2023
122
The HFSF ensures that, in exercising their rights, the HFSF and the HFSF Representative shall respect the Company’s business
autonomy and independence in the decision making of the Company.
5. Restrictions on Voting Rights
The Company’s Articles of Association do not impose restrictions on the voting rights or the exercise periods of voting rights
attached to its ordinary shares.
6. Shareholders’ Agreements
The Company is not aware of any agreements between its shareholders regarding restrictions in the transfer of the Company’s
ordinary shares or the exercise of the voting rights attaching to such shares.
7. Rules regarding the appointment and replacement of Board members and amendments to the Articles of Association
The rules set out in the Company’s Articles of Association regarding members’ appointment and repl acement, as well as
amendments of the provisions of the Articles of Association, do not deviate from the corresponding provisions of Greek Law
4548/2018 and Greek Law 4706/2020. BoD members are elected from the GM of Shareholders. Pursuant to art. 10 para. 2 of
Greek Law 3864/2010, the HFSF is represented with one member on the BoD of the Company with the aforementioned rights.
The appointment or replacement of the members of the BoD or the renewal of their term of office is subject to their suitability
assessment by the SSM pursuant to Law 4261/2014 and respective legislation.
Provisions related to the appointment and replacement of members of the BoD are also included in the Internal Corporate
Governance and Operating Regulation of the Company as well as the related Policies of the BoD (see relevant sections of the
Corporate Governance Statement).
8. Authority of the BoD to issue new or to acquire own shares
Pursuant to the provisions of Greek Law 4548/2018 and its Articles of Association, the Company may increase its share capital
by virtue of a resolution of the GM of Shareholders or of the BoD.
On 7 April 2021, the Extraordinary GM of the Shareholders of the Company authorized, according to article 24 para. 1 of Law
4548/2018, the BoD to resolve, with the quorum and majority required by law, the increase of the share capital of the Company
by an amount that cannot exceed three times the paid up capital on the date of delegation of these powers to the BoD, namely
up to € 14,959,064,952 with the issuance of new common registered voting shares, and to determine the specific terms and
time plan of the increase in accordance with the applicable provisions of Law 4548/2018. The BoD may exercise the above
power once or partially in several transactions. The above authorisations are valid for three (3) years, i.e. until 07 April 2024.
In addition, the abovementioned Extraordinary GM granted authorization to the BoD of the Company, valid for five years, to
establish a five (5) year stock option plan in accordance with the provisions of article 113 para.4 of Law 4548/2018 to executives
and employees of the Company and its affiliated companies, within the meaning of article 32 of law 4308/2014, in the form of
stock option rights (stock options), by increasing the share capital with the issuance of new shares and to determine, without
prejudice to the provisions of the Law 3864/2010, the terms of the stock options, at its discretion, in accordance with the
provisions of article 113 of Law 4548/2018. The maximum nominal value of all shares that may be awarded through the plan
will correspond to 1.5% of the paid-up share capital of the Company on the date of the establishment of the plan by the BoD
of the Company. Pursuant to the aforementioned authorization, the BoD proceeded on its meeting held on 16 November 2023,
Board of Directors' Report – 31 December 2023
123
to the establishment of a stock option plan (“Plan”) for executives and employees of the Company and its affiliated companies,
in the form of stock option rights (“Options”). The Plan will serve as a means of payment of remuneration payable in
instruments, to employees and executives of the Company and its affiliated entities, on the terms and conditions provided in
the Directors’ and the Group Remuneration Policies and the particular remunera tion schemes adopted from time to time.
However, no stock options have yet been granted.
Furthermore, the Company following (a) the decision of the Annual GM of its Shareholders dated 27 June 2023, pursuant to
which, the establishment of a share buyback program in accordance with article 49 of Law 4548/2018 (the "Program" and the
"Own Shares" respectively) was approved, (b) the relevant ECB authorization for the Program and (c) the relevant decision of
its BoD dated 21 September 2023, implemented the Program in the context of which it acquired 5,283,004 own shares traded
on the Athens Stock Exchange in the period from 22 September 2023 up to and including 29 September 2023, representing
0.42% of the share capital of the Company.
Subsequently, in implementation of the decision of the Annual GM of the shareholders of the Company dated 27 June 2023
and of the respective delegated resolution of the BoD dated 19 October 2023 for the approval of the Terms of a Free Dis
tribution of Company’s Shares Plan to execut ives and employees of the Company and its affiliated companies (the "Benefi-
ciaries"), 1,307,585 in total own, common registered voting shares of the Company were distributed free of charge to 137 Be-
neficiaries, under the applicable variable remuneration schemes, through over-the-counter transactions. After the aforemen-
tioned distribution, the Company owns a total of 3,975,419 own shares, which correspond to a percentage of 0.32% of its
total shares.
According to paragraph 1 of article 16C of Greek Law 3864/2010, during the period of participation of the HFSF in the share
capital of the Company, the Company is not permitted to acquire own shares without the approval of the HFSF.
9. Significant agreements which enter in force, are amended or terminated in the event of change of control following a
public takeover bid
There are no significant agreements of the Company, which come into force, are amended or terminated upon a change of
control of the Company following a public takeover bid.
10. Agreements between the Company and members of its BoD or its staff providing for compensation in the event of
resignation or dismissal without good reason or termination of their term of office or employment due to a public offer
Contracts with BoD members, reviewed on a case-by-case basis, may enclose explicit clauses for the provision of specific
severance payments approved by the GM of Shareholders. Moreover, contracts with BoD members may be terminated for
good reason, without any severance payment due and with no minimum prior notice. In all cases, severance payments are in
compliance with regulatory restrictions.
It is noted that the 2020 Annual GM of Shareholders approved the Company’s Severance Policy, which applies t o the senior
management of the Company, and to the executive members of the BoD and provides for severance payments related to the
early termination of an employment contract in good terms, based on their tenure in the Group.
Board of Directors' Report – 31 December 2023
124
There are no agreements between the Company and the members of its BoD or its staff which provide for their compensation
in the event of their departure as a result of a public takeover bid.
Athens, 27 February 2024
Non-Executive
Chairman of BoD
Managing Director (CEO)
Executive BoD Member
George P. Handjinicolaou
Christos I. Megalou
Board of Directors' Report – 31 December 2023
125
ALTERNATIVE PERFORMANCE MEASURES (“APMs”) AT GROUP LEVEL
In addition to the financial information reported under IFRS, the Group presents certain financial metrics as APMs, aligning
with the guidelines issued by the ESMA on 5 October 2015, which have been in force since July 3, 2016. According to the ESMA’s
definition, an APM is a measure of historical or future financial performance, financial position, or cash flows, other than a
financial measure defined or specified in the applicable financial framework. These measures are not required by, nor are the y
recognised under or presented in accordance with, IFRS or accounting principles generally accepted in Greece.
The below APMs provide a basis for monitoring the Group’s periodic financial performance and results of operations through
metrics which, although they are commonly used to convey the management’s view to the end user, they are not explicitly
defined under IFRS. These APMs are intended to provide investors and the Group’s management with additional information
to assist them in evaluating the Group’s financial position and performance.
The Group uses APMs in the context of making decisions regarding its financial, operational and strategic planning, as well a s
for the evaluation and publication of its performance. These APMs should be considered as supplemental in nature and not as
a substitute to the IFRS measures. They are not always comparable with measures used by other companies.
Below the Group presents the tables including APM indicators calculated pursuant to its audited consolidated financial
statements as at and for the years ended 31 December 2022 and 2023.
Α. APMs
No
APM
APM Definition – Calculation –Relevance of use
FY 2022
1
FY2023
1
Cost of Risk, organic
Impairment charges (as defined herein) excluding (-) ECL
impairment on loans and advances related to NPE
securitizations and sales (/) Net loans seasonally adjusted (as
defined herein).
Relevance of use: Asset quality metric
0.8%
0.8%
2
Cost-to-core income
ratio
Recurring Operating expenses (as defined herein) over (/) core
income.
Core income equals Net interest income plus (+) net fee and
commission income plus (+) income from non-banking
activities including rental income from investment property,
minus (-) extraordinary net fee and commission income.
Extraordinary expenses are defined herein.
Relevance of use: Efficiency metric
45.2%
31.1%
Board of Directors' Report – 31 December 2023
126
No
APM
APM Definition – Calculation –Relevance of use
FY 2022
1
FY2023
4
Financial Assets
The sum of financial assets at FVTPL, financial assets
mandatorily measured at FVTPL, loans and advances to
customers measured mandatorily at FVTPL, and investment
securities.
Relevance of use: Standard banking terminology
€ 12,523
million
€ 13,938
million
5
Loans to Deposits Ratio
(LDR)
Seasonally adjusted net loans (as defined herein) by (/)
Deposits (as defined herein).
Relevance of use: Liquidity metric
61.5%
61.5%
6
Net Fee Income over
Assets
Net fee income (NFI) recurring over (/) average total assets
adjusted as defined herein (average being balance of Q4.22
and balance of Q4.23 divided by 2 for FY.2023 and balance of
Q4.21 and balance of Q4.22 divided by 2 for FY.22).
NFI recurring equals Net fee and commission income plus (+)
income from non-banking activities (includes also rental
income from investment property)
Relevance of use: Profitability income
0.6%
0.7%
7
Net Interest Margin
(NIM)
Net interest margin equals net interest income over (/)
average total assets adjusted as defined, herein (average
being balance of Q4.22 and balance of Q4.23 divided by 2 for
FY.2023 and balance of Q4.21 plus balance of Q4.22 divided
by 2 for FY.22).
Relevance of use: Profitability metric
1.8%
2.7%
8
Net Profit, normalized
Net profit normalized is the profit / (loss) attributable to the
equity holders of the parent minus (-) extraordinary items
defined herein, i.e., extraordinary other income, extraordinary
expenses, and impairment charges on loans and advances
related to NPE securitizations and sales, defined at any given
period and adjusted for the projected effective corporate tax
rate of 2023 at 26%. Adjustment for the effective corporate
tax rate as of the second quarter of 2023 has been used for
quarters with tax normalization, based on Piraeus Bank’s
Business Plan assumptions for 2023.
Relevance of use: Profitability metric
€ 531
million
€ 1,047
million
9
Non-Performing
Exposures (NPEs)
On balance sheet credit exposures before ECL allowance for
impairment on loans and advances to customers at amortised
cost that include: a) loans measured at amortised cost
classified in stage 3; plus (+) b) purchased or originated credit
impaired (“POCI”) loans measured at amortised cost that
continue to be credit impaired as of the end of the reporting
€ 2,624
million
€ 1,329
million
Board of Directors' Report – 31 December 2023
127
No
APM
APM Definition – Calculation –Relevance of use
FY 2022
1
FY2023
period; plus (+) c) loans to customers mandatorily measured
at FVTPL that are credit impaired as of the end of the
reporting period.
Relevance of use: Asset quality – credit risk metric
10
NPE Ratio
NPEs over (/) gross loans (as defined herein)
Relevance of use: Asset quality – credit risk metric
6.8%
3.5%
11
NPE (cash) coverage
ratio
ECL allowance for impairment losses on loans and advances to
customers at amortised cost over (/) NPEs
Relevance of use: Asset quality – credit risk metric
54.5%
61.6%
12
Other Assets
Total Assets minus (-) Net Loans (as defined herein) minus (-)
Financial Assets
Relevance of use: Standard banking terminology
€ 24,756
million
€ 24,985
million
13
Other Income
Total net Income minus (-) Net Interest Income minus (-) Net
Fee and Commission Income and minus (-) income from non-
banking activities including rental income from investment
property
Relevance of use: Profitability metric
€ 744
million
€ 58
million
14
Other Liabilities
Total Liabilities minus (-) Due to Banks minus (-) Customer
Deposits
Relevance of use: Standard banking terminology
€ 3,507
million
€ 4,912
million
15
Performing Exposures
Gross loans (as defined herein) excluding (-) NPEs (as defined
herein) excluding (-) senior tranches of NPE securitizations
bearing Greek state Guarantee under the Hercules Scheme
excluding (-) OPEKEPE seasonal agri loan
Relevance of use: Asset quality – credit risk metric
€ 28,634
million
€ 30,134
million
16
Recurring Operating
Expenses
Total operating expenses minus (-) Extraordinary expenses (as
defined herein)
Relevance of use: Efficiency metric
€ (828)
million
€ (793)
million
17
Return on average
tangible book value
(RoaTBV), normalized
Normalized net profit (as defined herein) minus (-) AT1
coupon payment over (/) average Tangible Book Value (TBV)
(average of Q4.23 and Q4.22 for FY.2023 and average of
Q4.21 and Q4.22 for FY.2022)
9.1%
16.6%
Board of Directors' Report – 31 December 2023
128
No
APM
APM Definition – Calculation –Relevance of use
FY 2022
1
FY2023
TBV equals capital and reserves attributable to equity holders
of the parent excluding other equity instruments, i.e.,
Additional Tier 1 (AT1) capital and intangible assets
Relevance of use: Efficiency metric
18
Total Regulatory Capital
(fully loaded) on a pro
forma basis
Total capital, as defined by Regulation (EU) No 575/2013, for
FY.2023 subtracting (-) from the denominator the RWA of
Monza, Delta and Solar NPE portfolios, classified as HFS and
the capital accretion from the new issuance of Tier 2 in Jan.24
for FY.23 and for FY.2022, subtracting (-) from the
denominator the RWA of Sunrise III and Solar NPE portfolios
Relevance of use: Capital position regulatory metric
16.5%
18.2%
19
CET1 Capital Ratio (fully
loaded) on a pro forma
basis
CET1 capital, as defined by Regulation (EU) No 575/2013,
subtracting (-) from the denominator the RWA of Monza,
Delta and Solar NPE portfolios, classified as HFS for FY.23 and
for FY.2022, subtracting (-) from the denominator the RWA of
Sunrise III and Solar NPE portfolio s
Relevance of use: Capital position regulatory metric
11.6%
13.3%
1
As restated for the projected tax rate of 2023
Β. APMs Components
Balance Sheet
No
APM Component
APM Definition – Calculation
2
31/12/2022
3
31/12/2023
1
Deposits or Customer
Deposits
Due to customers
€ 58,372 million
€ 59,567 million
2
ECL Allowance grossed up
with PPA adjustment and
FV adjustment
ECL allowance grossed up with PPA adjustment)
and fair value adjustment on loans and advances to
customers mandatorily measured at FVTPL
corresponding to € 11 million for 31/12/2022 and €
0 million for 31/12/2023
€ (1,431) million
€ (819) million
Board of Directors' Report – 31 December 2023
129
No
APM Component
APM Definition – Calculation
2
31/12/2022
3
31/12/2023
3
Gross Loans or Customer
loans
Net loans (as defined herein) plus (+) ECL
allowance (grossed up with PPA adjustment)
€ 38,850 million
€ 38,398 million
4
Net Loans
Loans and advances to customers at amortised
cost, plus (+) loans and advances to customers
mandatorily measured at FVTPL
€ 37,418 million
€ 37,579 million
5
Seasonally Adjusted Net
Loans
Net loans (as defined herein) minus (-) OPEKEPE
seasonal funding facility of € 1,517 million as at 31
December 2022 and € 951 million as at 31
December 2023. The OPEKEPE seasonal agri loan
refers to the loan facility provided to the
beneficiaries related to subsidies by OPEKEPE.
€ 35,901 million
€ 36,629 million
6
Total Assets adjusted
Total assets excluding (-) the seasonal agri loan
(OPEKEPE) in December each year.
The seasonal agri loan refers to the loan facility
provided to the beneficiaries related to subsidies
by OPEKEPE, a public sector organization aiming to
the prompt distribution of EU subsidies to Greek
farmers
€ 73,128 million
€ 75,500 million
2
Relevance of use: Standard Banking terminology
3
Certain comparative APMs and APMs’ components have been restated to reflect the reclassifications performed in the
Statement of Financial Position during the current period. Further information on the reclassications of comparatives is
presented in Note 49.
Board of Directors' Report – 31 December 2023
130
Income Statement
No
APM Component
APM Definition – Calculation – Relevance of use
FY 2022
FY 2023
1
Impairment charges
Impairment (losses) on loans and advances to customers at
amortised cost plus (+) Other credit-risk related expenses on
loans and advances to customers at amortised cost. For 2023,
plus (+) loss on option agreement included in other provision
charges/(releases).
Relevance of use: Standard banking terminology
€ (615)
million
€ (559)
million
2
Net Result/ net Profit
Profit / (loss) attributable to the equity holders of the parent.
Relevance of use: Profitability metric
€ 899
million
€ 788
million
3
Extraordinary expenses
Extraordinary items for 2022 include € 57 million voluntary
redundancy costs booked in staff costs and € 4 million
extraordinary depreciation charges related to the carve-out
and sale of cards merchant acquiring business unit
transaction in the first quarter of 2022 booked in
administrative expenses.Extraordinary expenses for 2023
include € 62 million voluntary redundancy costs, € 4 million
for talent retention and € 15 million reversal of talent
retention accruals due to share buyback and € 4 million
subsidies to low compensated employees all booked in staff
costs, and € 15.5 million donation for extreme weather
phenomena booked in G&A costs.
Relevance of use: Efficiency metric
€ (61)
million
€ (71)
million
4
Extraordinary other
income
In 2022 extraordinary other income related with (i) the gain
from the disposal of the merchant acquiring business in the
first quarter of 2022, amounting to € 282 million booked in
trading income (ii) non-recurring gain derivatives of € 282
million that were booked in net gains/(losses) from financial
instruments measured at FVTPL and (iii) recycling of the
FVTOCI reserve to income statement amounting to € 109
million, which was recognised in net gains/(losses) from
financial instruments measured at FVTOCI. No extraordinary
other income was booked in 2023
Relevance of use: Profitability metric
€ 672
million
€ 0
million
Board of Directors' Report – 31 December 2023
131
No
APM Component
APM Definition – Calculation – Relevance of use
FY 2022
FY 2023
5
Extraordinary net fee
income
In 2022 extraordinary net fee income included acquiring fees
of € 6 million related with the cards merchant acquiring
business unit that has been carved-out (Thalis transaction)
booked in net fee and commission income. No extraordinary
net fee income was booked in 2023
Relevance of use: Profitability metric
€ 6
million
€ 0
million
6
Extraordinary share of
profit/ (loss) of
associates and joint
ventures
In 2022, € 26 million related with the sale of RES infrastructure
booked in net gains from disposal of associates. No
extraordinary share of profit/(loss) of associates and joint
ventures was booked in 2023
Relevance of use: Profitability metric
€ 26
million
€ 0
million
7
Extraordinary
impairments
€ 320 million in 2022 and € 253 million in 2023 impairment
losses on loans and advances to customers which relate to
NPEs sold in the year or classified in held for sale, in the
context of the NPE reduction plan.
Relevance of use: Standard banking terminology
€ (320)
million
€ (253)
million
8
Operating Expenses
(OpEx)
Total operating expenses
Relevance of use: Efficiency metric
€ (889)
million
€ (863)
million
.
The BoD Report contains financial information and measures as derived from the Group and the Company’s annual financial
statements for the years ended 31 December 2022 and 31 December 2023, which have been prepared in accordance with
IFRSs, as endorsed by the EU. Additionally, it contains financial data which is compiled as a normal part of our Financial
Statement Closing Process and management information systems. Management believes that the non-IFRS financial measures
used, presents a more meaningful analysis o f the Group’s financial condition and results of operations.
Board of Directors' Report – 31 December 2023
132
Appendix A - reporting templates in accordance with Delegated Regulation (EU) 2021/2178, Annexes VI and XII
0.Summary of KPIs to be disclosed by credit institutions under Article 8 Taxonomy Regulation
Total environmentally
sustainable assets****
Total environmentally
sustainable assets*****
KPI****
KPI*****
% coverage
(over total
assets)***
% of assets excluded
from the numerator of
the GAR (Article 7(2) and
(3) and Section 1.1.2. of
Annex V)
% of assets excluded
from the denominator
of the GAR (Article 7(1)
and Section 1.2.4 of
Annex V)
Main KPI
Green asset ratio (GAR)
stock
385
1,249
0.90%
2.91%
56.20%
34.97%
43.80%
Total environmentally
sustainable activities****
Total environmentally
sustainable
activities*****
KPI
KPI
% coverage
(over total
assets)
% of assets excluded
from the numerator of
the GAR (Article 7(2) and
(3) and Section 1.1.2. of
Annex V)
% of assets excluded
from the denominator
of the GAR (Article 7(1)
and Section 1.2.4 of
Annex V)
Additional
KPIs
GAR (flow)
166
482
6.32%
18.32%
Trading book*
N/A
N/A
N/A
N/A
Financial guarantees
5
17
8%
31%
Assets under management
-
-
-
-
Fees and commissions
income**
N/A
N/A
N/A
N/A
(*) For credit institutions that do not meet the conditions of Article 94(1) of the CRR or the conditions set out in Article 325a(1) of the CRR.
(**) Fees and commissions income from services other than lending and Assets under Management (“AuM”).
Instutitons shall dislcose forward-looking information for these KPIs, including information in terms of targets, together with relevant explanations on the methodology applied.
(***) % of assets covered by the KPI over banks´ total assets.
(****) based on the Turnover KPI of the counterparty.
(*****) based on the CapEx KPI of the counterparty, except for lending activities where for general lending Turnover KPI is used.
Fees and Commissions and Trading Book KPIs shall only apply starting 2026. SMEs´inclusion in these KPI will only apply subjec t to a positive result of an impact assessment.
Board of Directors' Report – 31 December 2023
133
1.Assets for the calculation of GAR based on Turnover
Million EUR
2023
Total [gross]
carrying
amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which towards taxonomy
relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which environmentally
sustainable (Taxonomy-
aligned)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of
which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for
GAR calculation
16,228
9,198
376
105
66
48
58
8
-
-
9,256
385
105
66
48
2
Financial undertakings
1,557
239
23
-
3
-
18
3
-
-
257
26
-
3
-
3
Credit institutions
1,096
145
-
-
-
-
-
-
-
-
145
-
-
-
-
4
Loans and advances
23
3
-
-
-
-
-
-
-
-
3
-
-
-
-
5
Debt securities, including UoP
1,065
141
-
-
-
-
-
-
-
-
141
-
-
-
-
6
Equity instruments
8
1
-
-
-
-
-
-
1
-
-
-
7
Other financial corporations
461
94
23
-
3
-
18
3
-
-
112
26
-
3
-
8
of which investment firms
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10
Debt securities, including UoP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
12
of which management companies
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14
Debt securities, including UoP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
16
of which insurance undertakings
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17
Loans and advances
-
-
-
-
-
-
-
-
-
-
--
-
-
-
-
18
Debt securities, including UoP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
20
Non-financial undertakings
3,508
1,299
257
9
5
48
40
6
-
-
1,339
263
9
5
48
21
Loans and advances
3,359
1,227
257
9
5
48
40
6
-
-
1,267
262
9
5
48
22
Debt securities, including UoP
124
61
1
-
-
-
-
-
-
-
61
1
-
-
-
23
Equity instruments
25
11
-
-
-
-
-
-
11
-
-
-
Board of Directors' Report – 31 December 2023
134
Million EUR
2023
Total [gross]
carrying
amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which towards taxonomy
relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which environmentally
sustainable (Taxonomy-
aligned)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of
which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
24
Households
9,299
6,026
96
96
58
-
-
-
-
-
6,026
96
96
58
-
25
of which loans collateralised by
residential immovable property
5,555
5,224
38
38
-
-
-
-
-
-
5,224
38
38
-
-
26
of which building renovation loans
653
653
58
58
58
-
-
-
-
-
653
58
58
58
-
27
of which motor vehicle loans
233
150
-
-
-
-
150
-
-
-
-
28
Local governments financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
29
Housing financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30
Other local government financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31
Collateral obtained by taking
possession: residential and commercial
immovable properties
1,863
1,634
-
-
-
-
-
-
-
-
1,634
-
-
-
-
32
Assets excluded from the numerator for
GAR calculation (covered in the
denominator)
26,738
33
Financial and Non-financial
undertakings
20,439
34
SMEs and NFCs (other than SMEs) not
subject to NFRD disclosure obligations
17,627
35
Loans and advances
16,261
36
of which loans collateralised by
commercial immovable property
6,158
37
of which building renovation loans
-
38
Debt securities
-
39
Equity instruments
1,366
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
2,812
41
Loans and advances
2,791
42
Debt securities
21
43
Equity instruments
-
44
Derivatives
-
45
On demand interbank loans
507
46
Cash and cash-related assets
729
Board of Directors' Report – 31 December 2023
135
Million EUR
2023
Total [gross]
carrying
amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which towards taxonomy
relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which environmentally
sustainable (Taxonomy-
aligned)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of
which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
47
Other categories of assets (e.g.
Goodwill, commodities etc.)
5,063
48
Total GAR assets
42,965
9,198
376
105
66
48
58
8
-
-
9,256
385
105
66
48
49
Assets not covered for GAR calculation
33,485
50
Central governments and Supranational
issuers
22,846
51
Central banks exposure
9,839
52
Trading book
800
53
Total assets
76,450
9,198
376
105
66
48
58
8
-
-
9,256
385
105
66
48
Off-balance sheet exposures - Undertakings subject to NFRD
disclosure obligations
54
Financial guarantees
54
6
5
-
-
2
-
-
-
-
6
5
-
-
2
55
Assets under management
4,379
-
-
-
-
-
-
-
-
-
-
-
-
-
-
56
Of which debt securities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
57
Of which equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1. This template includes information for loans and advances, debt securities and equity instruments in the banking book, towards financial corporates, non-financial corporates (“NFC”), including SMEs, households
(including residential real estate, house renovation loans and motor vehicle loans only) and local governments/municipalities (house financing).
2. The following accounting categories of financial assets are considered: Financial assets at amortised cost, financial assets at fair value through other comprehensive income, investments in subsidiaries, joint ventures
and associates, financial assets designated at fair value through profit or loss and non-trading financial assets mandatorily at fair value through profit or loss, and real estate collaterals obtained by credit institutions by
taking possession in exchange of cancellation of debts.
3. For motor vehicle loans, exposures generated after the date of application of the disclosure are included.
Board of Directors' Report – 31 December 2023
136
1.Assets for the calculation of GAR based on CAPEX
Million EUR
2023
Total [gross]
carrying
amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which towards taxonomy
relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which environmentally
sustainable (Taxonomy-
aligned)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of
which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for
GAR calculation
16,228
10,354
1,247
105
126
50
4
1
-
1
10,358
1,249
105
126
51
2
Financial undertakings
1,557
334
142
-
22
-
2
1
-
1
336
143
-
22
1
3
Credit institutions
1,096
145
-
-
-
-
-
-
-
-
145
-
-
-
-
4
Loans and advances
23
3
-
-
-
-
-
-
-
-
3
-
-
-
-
5
Debt securities, including UoP
1,065
141
-
-
-
-
-
-
-
-
141
-
-
-
-
6
Equity instruments
8
1
-
-
-
-
-
-
1
-
-
-
7
Other financial corporations
461
189
142
-
22
-
2
1
-
1
191
143
-
22
1
8
of which investment firms
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10
Debt securities, including UoP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
12
of which management companies
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14
Debt securities, including UoP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
16
of which insurance undertakings
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18
Debt securities, including UoP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
20
Non-financial undertakings
3,508
2,360
1,010
9
46
50
2
-
-
-
2,362
1,010
9
46
50
21
Loans and advances
3,359
2,250
989
9
44
49
2
-
-
-
2,252
989
9
44
49
22
Debt securities, including UoP
124
99
20
-
1
1
-
-
-
-
99
20
-
1
1
23
Equity instruments
25
11
1
1
-
-
-
-
11
1
1
-
Board of Directors' Report – 31 December 2023
137
Million EUR
2023
Total [gross]
carrying
amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which towards taxonomy
relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which environmentally
sustainable (Taxonomy-
aligned)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of
which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
24
Households
9,299
6,026
96
96
58
-
-
-
-
-
6,026
96
96
58
-
25
of which loans collateralised by
residential immovable property
5,555
5,224
38
38
-
-
-
-
-
-
5,224
38
38
-
-
26
of which building renovation loans
653
653
58
58
58
-
-
-
-
-
653
58
58
58
-
27
of which motor vehicle loans
233
150
-
-
-
-
150
-
-
-
-
28
Local governments financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
29
Housing financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30
Other local government financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31
Collateral obtained by taking
possession: residential and commercial
immovable properties
1,863
1,634
-
-
-
-
-
-
-
-
1,634
-
-
-
-
32
Assets excluded from the numerator for
GAR calculation (covered in the
denominator)
26,738
33
Financial and Non-financial
undertakings
20,439
34
SMEs and NFCs (other than SMEs) not
subject to NFRD disclosure obligations
17,627
35
Loans and advances
16,261
36
of which loans collateralised by
commercial immovable property
6,158
37
of which building renovation loans
-
38
Debt securities
-
39
Equity instruments
1,366
40
Non-EU country counterparties not
subject to NFRD disclosure obligations
2,812
41
Loans and advances
2,791
42
Debt securities
21
43
Equity instruments
-
44
Derivatives
-
45
On demand interbank loans
507
46
Cash and cash-related assets
729
Board of Directors' Report – 31 December 2023
138
Million EUR
2023
Total [gross]
carrying
amount
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which towards taxonomy
relevant sectors (Taxonomy-
eligible)
Of which towards taxonomy relevant sectors
(Taxonomy-eligible)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which environmentally
sustainable (Taxonomy-
aligned)
Of which environmentally sustainable
(Taxonomy-aligned)
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of
which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
47
Other categories of assets (e.g.
Goodwill, commodities etc.)
5,063
48
Total GAR assets
42,965
10,354
1,247
105
126
50
4
1
-
1
10,358
1,249
105
126
51
49
Assets not covered for GAR calculation
33,485
50
Central governments and Supranational
issuers
22,846
51
Central banks exposures
9,839
52
Trading book
800
53
Total assets
76,450
10,354
1,247
105
126
50
4
1
-
1
10,358
1,249
105
126
51
Off-balance sheet exposures - Undertakings subject to NFRD
disclosure obligations
54
Financial guarantees
54
18
17
-
-
4
-
-
-
-
18
17
-
-
4
55
Assets under management
4,379
-
-
-
-
-
-
-
-
-
-
-
-
-
-
56
Of which debt securities
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
57
Of which equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1. This template includes information for loans and advances, debt securities and equity instruments in the banking book, towards financial corporates, non-financial corporates (NFC), including SMEs, households
(including residential real estate, house renovation loans and motor vehicle loans only) and local governments / municipalities (house financing).
2. The following accounting categories of financial assets are considered: Financial assets at amortised cost, financial assets at fair value through other comprehensive income, investments in subsidiaries, joint
ventures and associates, financial assets designated at fair value through profit or loss and non-trading financial assets mandatorily at fair value through profit or loss, and real estate collaterals obtained by credit
institutions by taking possession in exchange of cancellation of debts.
3. For motor vehicle loans, exposures generated after the date of application of the disclosure are included.
Board of Directors' Report – 31 December 2023
139
2. GAR sector information based on Turnover
Breakdown by sector -
NACE 4 digits level
(code and label)
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
Mn
EUR
Of which
environmentally
sustainable (CCM)
Mn
EUR
Of which
environmentally
sustainable (CCM)
Mn
EUR
Of which
environmentally
sustainable (CCA)
Mn
EUR
Of which
environmentally
sustainable (CCA)
Mn
EUR
Of which
environmentally
sustainable (CCM +
CCA)
Mn
EUR
Of which
environmentally
sustainable (CCM +
CCA)
1
C.12.00
-
-
-
-
-
-
2
C.19.20
3
3
-
-
3
3
3
C.20.20
-
-
-
-
-
-
4
C.22.19
-
-
-
-
-
-
5
C.22.21
-
-
-
-
-
-
6
C.23.51
-
-
38
6
38
6
7
C.24.10
4
2
-
-
4
2
8
C.24.20
21
19
-
-
21
19
9
C.24.42
59
3
-
-
59
3
10
C.24.44
5
-
-
-
5
-
11
C.25.92
-
-
-
-
-
-
12
C.27.20
15
15
-
-
15
15
13
C.27.32
20
18
-
-
20
18
14
C.32.99
9
8
-
-
9
8
15
D.35.11
246
25
-
-
246
25
16
D.35.12
-
-
-
-
-
-
17
D.35.13
2
-
-
-
2
-
18
D.35.14
1
1
-
-
1
1
19
D.35.23
-
-
-
-
-
-
20
F.42.11
162
9
-
-
162
9
21
F.42.22
137
137
-
-
137
137
22
F.43.99
-
-
-
-
-
-
23
G.45.20
-
-
-
-
-
-
24
G.46.47
1
-
-
-
1
-
25
G.46.51
-
-
-
-
-
-
26
G.46.71
1
1
-
-
1
1
27
G.47.19
53
-
-
-
53
-
28
G.47.52
-
-
-
-
-
-
29
G.47.59
1
-
-
-
1
-
30
G.47.71
-
-
-
-
-
-
31
G.47.91
-
-
-
-
-
-
32
H.50.10
113
-
-
-
113
-
33
H.50.20
141
9
-
-
141
9
34
H.52.21
16
3
-
-
16
3
35
J.62.01
-
-
-
-
-
-
Board of Directors' Report – 31 December 2023
140
Breakdown by sector -
NACE 4 digits level
(code and label)
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
Mn
EUR
Of which
environmentally
sustainable (CCM)
Mn
EUR
Of which
environmentally
sustainable (CCM)
Mn
EUR
Of which
environmentally
sustainable (CCA)
Mn
EUR
Of which
environmentally
sustainable (CCA)
Mn
EUR
Of which
environmentally
sustainable (CCM +
CCA)
Mn
EUR
Of which
environmentally
sustainable (CCM +
CCA)
36
J.62.02
-
-
-
-
-
-
37
J.62.09
2
-
-
-
2
-
38
L.68
2
-
-
-
2
-
39
L.68.20
146
-
-
-
146
-
40
L.68.32
27
-
-
-
27
-
41
M.70.22
-
-
-
-
-
-
42
N.77.11
109
5
2
-
111
5
43
R.92.00
-
-
-
-
-
-
1. Credit institutions disclose in this template information on exposures in the banking book towards those sectors covered by the Taxonomy (NACE sectors 4 levels of detail), using the relevant NACE Codes on the basis of the
principal activity of the counterparty.
2. The counterparty NACE sector allocation is based exclusively on the nature of the immediate counterparty. The classification of the exposures incurred jointly by more than one obligor is done on the basis of the characteristics
of the obligor that was the more relevant, or determinant, for the institution to grant the exposure. The distribution of jointly incurred exposures by NACE codes is driven by the characteristics of the more relevant or determinant
obligor. Institutions disclose information by NACE codes with the level of disaggregation required in the template.
Board of Directors' Report – 31 December 2023
141
2. GAR sector information based on CAPEX
Breakdown by sector -
NACE 4 digits level (code
and label)
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
Mn
EUR
Of which
environmentally
sustainable (CCM)
Mn
EUR
Of which
environmentally
sustainable (CCM)
Mn
EUR
Of which
environmentally
sustainable (CCA)
Mn
EUR
Of which
environmentally
sustainable (CCA)
Mn
EUR
Of which
environmentally
sustainable (CCM +
CCA)
Mn
EUR
Of which
environmentally
sustainable (CCM +
CCA)
1
C.12.00
-
-
-
-
-
-
2
C.19.20
344
271
-
-
344
271
3
C.20.20
1
1
-
-
1
1
4
C.22.19
-
-
-
-
-
-
5
C.22.21
-
-
-
-
-
-
6
C.23.51
36
10
-
-
36
10
7
C.24.10
8
3
-
-
8
3
8
C.24.20
20
17
-
-
20
17
9
C.24.42
75
19
-
-
75
19
10
C.24.44
9
-
-
-
9
-
11
C.25.92
-
-
-
-
-
-
12
C.27.20
18
18
-
-
18
18
13
C.27.32
19
17
-
-
19
17
14
C.32.99
9
8
-
-
9
8
15
D.35.11
769
238
-
-
769
238
16
D.35.12
-
-
-
-
-
-
17
D.35.13
37
-
-
-
37
-
18
D.35.14
75
69
-
-
75
69
19
D.35.23
1
1
-
-
1
1
20
F.42.11
139
56
-
-
139
56
21
F.42.22
161
161
-
-
161
161
22
F.43.99
1
1
-
-
1
1
23
G.45.20
-
-
-
-
-
-
24
G.46.47
5
-
-
-
5
-
25
G.46.51
-
-
-
-
-
-
26
G.46.71
60
55
-
-
60
55
27
G.47.19
41
-
-
-
41
-
28
G.47.52
-
-
-
-
-
-
29
G.47.59
20
-
-
-
20
-
30
G.47.71
-
-
-
-
-
-
31
G.47.91
-
-
-
-
-
-
32
H.50.10
112
10
-
-
112
10
33
H.50.20
140
20
-
-
140
20
34
H.52.21
23
21
-
-
23
21
Board of Directors' Report – 31 December 2023
142
Breakdown by sector -
NACE 4 digits level (code
and label)
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
Non-Financial corporates
(Subject to NFRD)
SMEs and other NFC not
subject to NFRD
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
[Gross] carrying amount
Mn
EUR
Of which
environmentally
sustainable (CCM)
Mn
EUR
Of which
environmentally
sustainable (CCM)
Mn
EUR
Of which
environmentally
sustainable (CCA)
Mn
EUR
Of which
environmentally
sustainable (CCA)
Mn
EUR
Of which
environmentally
sustainable (CCM +
CCA)
Mn
EUR
Of which
environmentally
sustainable (CCM +
CCA)
35
J.62.01
-
-
-
-
-
-
36
J.62.02
-
-
-
-
-
-
37
J.62.09
-
-
-
-
-
-
38
L.68
2
-
-
-
2
-
39
L.68.20
113
-
-
-
113
-
40
L.68.32
21
-
-
-
21
-
41
M.70.22
-
-
-
-
-
-
42
N.77.11
102
14
2
-
104
15
43
R.92.00
-
-
-
-
-
-
1. Credit institutions disclose in this template information on exposures in the banking book towards those sectors covered by the Taxonomy (NACE sectors 4 levels of detail), using the relevant NACE Codes on the basis of the
principal activity of the counterparty.
2. The counterparty NACE sector allocation is based exclusively on the nature of the immediate counterparty. The classification of the exposures incurred jointly by more than one obligor is done on the basis of the characteristics
of the obligor that was the more relevant, or determinant, for the institution to grant the exposure. The distribution of jointly incurred exposures by NACE codes is driven by the characteristics of the more relevant or determinant
obligor. Institutions disclose information by NACE codes with the level of disaggregation required in the template.
Board of Directors' Report – 31 December 2023
143
3. GAR KPI stock based on Turnover
% (compared to total covered assets in the
denominator)
2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-
eligible)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-eligible)
Proportion
of total
assets
covered
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Proportion of total covered
assets funding taxonomy
relevant sectors (Taxonomy-
aligned)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
Of which
Use of
Proceeds
Of
which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
56.68%
2.32%
0.65%
0.41%
0.30%
0.36%
0.05%
-
-
57.04%
2.37%
0.65%
0.41%
0.30%
21.23%
2
Financial undertakings
15.36%
1.48%
-
0.18%
-
1.16%
0.17%
-
-
16.52%
1.65%
-
0.18%
-
2.04%
3
Credit institutions
13.23%
-
-
-
-
-
-
-
-
13.23%
-
-
-
-
1.43%
4
Loans and advances
13.84%
-
-
-
-
-
-
-
-
13.84%
-
-
-
-
0.03%
5
Debt securities, including UoP
13.21%
-
-
-
-
-
-
-
-
13.21%
-
-
-
-
1.39%
6
Equity instruments
13.81%
-
-
-
-
-
-
13.81%
-
-
-
0.01%
7
Other financial corporations
20.42%
5.00%
-
0.62%
0.01%
3.93%
0.57%
-
-
24.35%
5.57%
-
0.62%
0.01%
0.60%
8
of which investment firms
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10
Debt securities, including UoP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
12
of which management companies
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14
Debt securities, including UoP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
16
of which insurance undertakings
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18
Debt securities, including UoP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
20
Non-financial undertakings
37.02%
7.34%
0.25%
0.15%
1.36%
1.15%
0.16%
-
-
38.17%
7.50%
0.25%
0.15%
1.36%
4.59%
21
Loans and advances
36.52%
7.64%
0.27%
0.15%
1.42%
1.20%
0.17%
-
-
37.72%
7.80%
0.27%
0.15%
1.42%
4.39%
Board of Directors' Report – 31 December 2023
144
% (compared to total covered assets in the
denominator)
2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-
eligible)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-eligible)
Proportion
of total
assets
covered
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Proportion of total covered
assets funding taxonomy
relevant sectors (Taxonomy-
aligned)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
Of which
Use of
Proceeds
Of
which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
22
Debt securities, including UoP
49.26%
0.62%
-
0.07%
0.07%
-
-
-
-
49.26%
0.62%
-
0.07%
0.07%
0.16%
23
Equity instruments
42.90%
-
-
-
-
-
-
42.90%
-
-
-
0.03%
24
Households
64.80%
1.03%
1.03%
0.62%
-
-
-
-
-
64.80%
1.03%
1.03%
0.62%
-
12.16%
25
of which loans collateralised by residential
immovable property
94.04%
0.68%
0.68%
-
-
-
-
-
-
94.04%
0.68%
0.68%
-
-
7.27%
26
of which building renovation loans
100.00%
8.89%
8.89%
8.89%
-
-
-
-
-
100.00%
8.89%
8.89%
8.89%
-
0.85%
27
of which motor vehicle loans
64.15%
-
-
-
-
64.15%
-
-
-
-
0.31%
28
Local governments financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
29
Housing financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30
Other local government financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
87.70%
-
-
-
-
-
-
-
-
87.70%
-
-
-
-
2.44%
32
Total GAR assets
21.41%
0.88%
0.24%
0.15%
0.11%
0.14%
0.02%
-
-
21.54%
0.90%
0.24%
0.15%
0.11%
56.20%
Board of Directors' Report – 31 December 2023
145
3.GAR KPI stock based on CAPEX
% (compared to total covered assets in the
denominator)
2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-
eligible)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Proportion of total covered
assets funding taxonomy
relevant sectors (Taxonomy-
aligned)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Proportion
of total
assets
covered
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
Of which
Use of
Proceeds
Of
which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
GAR - Covered assets in both numerator
and denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
63.81%
7.69%
0.65%
0.78%
0.31%
0.03%
0.01%
-
0.01%
63.83%
7.69%
0.65%
0.78%
0.32%
21.23%
2
Financial undertakings
21.46%
9.10%
-
1.42%
-
0.13%
0.07%
-
0.07%
21.59%
9.17%
-
1.42%
0.07%
2.04%
3
Credit institutions
13.27%
-
-
-
-
-
-
-
-
13.27%
-
-
-
-
1.43%
4
Loans and advances
13.75%
-
-
-
-
-
-
-
-
13.75%
-
-
-
-
0.03%
5
Debt securities, including UoP
13.26%
-
-
-
-
-
-
-
-
13.26%
-
-
-
-
1.39%
6
Equity instruments
13.81%
-
-
-
-
-
-
13.81%
-
-
-
0.01%
7
Other financial corporations
40.93%
30.72%
-
4.79%
-
0.45%
0.24%
-
0.24%
41.37%
30.96%
-
4.79%
0.24%
0.60%
8
of which investment firms
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10
Debt securities, including UoP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
12
of which management companies
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14
Debt securities, including UoP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
16
of which insurance undertakings
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18
Debt securities, including UoP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
20
Non-financial undertakings
67.27%
28.78%
0.25%
1.30%
1.43%
0.06%
0.01%
-
-
67.33%
28.79%
0.25%
1.30%
1.43%
4.59%
21
Loans and advances
66.98%
29.44%
0.27%
1.32%
1.47%
0.06%
0.01%
-
-
67.04%
29.45%
0.27%
1.32%
1.47%
4.39%
22
Debt securities, including UoP
80.07%
16.14%
-
0.41%
0.43%
-
-
-
-
80.07%
16.14%
-
0.41%
0.43%
0.16%
23
Equity instruments
42.54%
2.87%
2.87%
-
-
-
-
42.54%
2.87%
2.87%
-
0.03%
Board of Directors' Report – 31 December 2023
146
% (compared to total covered assets in the
denominator)
2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-
eligible)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Proportion of total covered
assets funding taxonomy
relevant sectors (Taxonomy-
aligned)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Proportion
of total
assets
covered
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
Of which
Use of
Proceeds
Of
which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
24
Households
64.80%
1.03%
1.03%
0.62%
-
-
-
-
-
64.80%
1.03%
1.03%
0.62%
-
12.16%
25
of which loans collateralised by residential
immovable property
94.04%
0.68%
0.68%
-
-
-
-
-
-
94.04%
0.68%
0.68%
-
-
7.27%
26
of which building renovation loans
100.00%
8.89%
8.89%
8.89%
-
-
-
-
-
100.00%
8.89%
8.89%
8.89%
-
0.85%
27
of which motor vehicle loans
64.15%
-
-
-
-
64.15%
-
-
-
-
0.31%
28
Local governments financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
29
Housing financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30
Other local government financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
87.70%
-
-
-
-
-
-
-
-
87.70%
-
-
-
-
2.44%
32
Total GAR assets
24.10%
2.90%
0.24%
0.29%
0.12%
0.01%
-
-
-
24.11%
2.91%
0.24%
0.29%
0.12%
56.20%
Board of Directors' Report – 31 December 2023
147
4.GAR KPI Flow based on Turnover
% (compared to flow of total eligible assets)
2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-
eligible)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-eligible)
Proportion
of total
new
assets
covered
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Proportion of total covered
assets funding taxonomy
relevant sectors (Taxonomy-
aligned)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
Of which
Use of
Proceeds
Of
which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
GAR - Covered assets in both numerator and
denominator
1
Loans and advances, debt securities and
equity instruments not HfT eligible for GAR
calculation
26.32%
6.19%
2.02%
1.30%
0.48%
0.91%
0.12%
-
-
27.22%
6.32%
2.02%
1.30%
0.48%
100.00%
2
Financial undertakings
6.22%
1.08%
-
-
-
0.74%
0.11%
-
-
6.96%
1.19%
-
-
-
23.16%
3
Credit institutions
5.05%
-
-
-
-
-
-
-
-
5.05%
-
-
-
-
21.70%
4
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5
Debt securities, including UoP
5.05%
-
-
-
-
-
-
-
-
5.05%
-
-
-
-
21.70%
6
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
7
Other financial corporations
23.53%
17.18%
-
-
-
11.66%
1.69%
-
-
35.19%
18.88%
-
-
-
1.46%
8
of which investment firms
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10
Debt securities, including UoP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
12
of which management companies
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14
Debt securities, including UoP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
16
of which insurance undertakings
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18
Debt securities, including UoP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
20
Non-financial undertakings
26.12%
9.64%
0.78%
0.54%
1.09%
1.66%
0.23%
-
-
27.78%
9.87%
0.78%
0.54%
1.09%
44.21%
21
Loans and advances
26.20%
9.65%
0.78%
0.53%
1.09%
1.67%
0.23%
-
-
27.87%
9.88%
0.78%
0.53%
1.09%
43.96%
22
Debt securities, including UoP
12.96%
8.02%
-
1.23%
1.23%
-
-
-
-
12.96%
8.02%
-
1.23%
1.23%
0.25%
23
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
24
Households
42.79%
5.39%
5.39%
3.42%
-
-
-
-
-
42.79%
5.39%
5.39%
3.42%
-
31.41%
25
of which loans collateralised by residential
immovable property
100.00%
5.41%
5.41%
-
-
-
-
-
100.00%
5.41%
5.41%
-
-
11.33%
Board of Directors' Report – 31 December 2023
148
% (compared to flow of total eligible assets)
2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-
eligible)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-eligible)
Proportion
of total
new
assets
covered
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Proportion of total covered
assets funding taxonomy
relevant sectors (Taxonomy-
aligned)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
Of which
Use of
Proceeds
Of
which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
26
of which building renovation loans
100.00%
73.71%
73.71%
73.71%
-
-
-
-
-
100.00%
73.71%
73.71%
73.71%
-
1.45%
27
of which motor vehicle loans
10.00%
-
-
-
-
28
Local governments financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
29
Housing financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30
Other local government financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31
Collateral obtained by taking possession:
residential and commercial immovable
properties
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1.48%
32
Total GAR assets
26.32%
6.19%
2.02%
1.30%
0.48%
0.91%
0.12%
-
-
27.22%
6.32%
2.02%
1.30%
0.48%
100.00%
Institution dislcoses in this template the GAR KPIs on flow of loans calculated (new loans on a net basis) based on the data disclosed in template 1, on covered assets, and by applying the formulas proposed in this template.
Board of Directors' Report – 31 December 2023
149
4.GAR KPI Flow based on CAPEX
% (compared to flow of total eligible assets)
2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-
eligible)
Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)
Proportion of
total new
assets covered
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant
sectors (Taxonomy-aligned)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
GAR - Covered assets in both
numerator and denominator
1
Loans and advances, debt securities
and equity instruments not HfT
eligible for GAR calculation
48.43%
18.32%
2.02%
2.07%
1.03%
0.06%
0.01%
-
-
48.49%
18.32%
2.02%
2.07%
1.03%
100.00%
2
Financial undertakings
9.99%
4.35%
-
0.20%
-
-
-
-
-
9.99%
4.35%
-
0.20%
-
23.16%
3
Credit institutions
5.14%
-
-
-
-
-
-
-
-
5.14%
-
-
-
-
21.70%
4
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5
Debt securities, including UoP
5.14%
-
-
-
-
-
-
-
-
5.14%
-
-
-
-
21.70%
6
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
7
Other financial corporations
81.88%
68.92%
-
3.15%
-
-
-
-
-
81.88%
68.92%
-
3.15%
-
1.46%
8
of which investment firms
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10
Debt securities, including UoP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
12
of which management companies
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
13
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14
Debt securities, including UoP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
15
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
16
of which insurance undertakings
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
17
Loans and advances
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
18
Debt securities, including UoP
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
20
Non-financial undertakings
74.17%
35.35%
0.78%
2.16%
2.34%
0.14%
0.02%
-
-
74.31%
35.37%
0.78%
2.16%
2.34%
44.21%
21
Loans and advances
74.30%
35.27%
0.78%
2.17%
2.30%
0.14%
0.02%
-
-
74.44%
35.29%
0.78%
2.17%
2.30%
43.96%
22
Debt securities, including UoP
51.22%
48.13%
-
1.23%
8.02%
-
-
-
-
51.22%
48.13%
-
1.23%
8.02%
0.25%
Board of Directors' Report – 31 December 2023
150
% (compared to flow of total eligible assets)
2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-
eligible)
Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)
Proportion of
total new
assets covered
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant
sectors (Taxonomy-aligned)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
23
Equity instruments
-
-
-
-
-
-
-
-
-
-
-
-
24
Households
42.79%
5.39%
5.39%
3.42%
-
-
-
-
-
42.79%
5.39%
5.39%
3.42%
-
31.14%
25
of which loans collateralised by
residential immovable property
100.00%
5.41%
5.41%
-
-
-
-
-
-
100.00%
5.41%
5.41%
-
-
11.33%
26
of which building renovation loans
100.00%
73.71%
73.71%
73.71%
-
-
-
-
-
100.0%
73.71%
73.71%
73.71%
-
1.45%
27
of which motor vehicle loans
10.00%
-
-
-
-
10.00%
-
-
-
-
5.52%
28
Local governments financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
29
Housing financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30
Other local government financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
31
Collateral obtained by taking
possession: residential and
commercial immovable properties
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1.48%
32
Total GAR assets
48.43%
18.32%
2.02%
2.07%
1.03%
0.06%
0.01%
-
-
48.49%
18.32%
2.02%
2.07%
1.03%
100.00%
Institution dislcoses in this template the GAR KPIs on flow of loans calculated (new loans on a net basis) based on the data disclosed in template 1, on covered assets, and by applying the formulas proposed in this template.
Board of Directors' Report – 31 December 2023
151
5.KPI off-balance sheet exposures based on Turnover
% (compared to total eligible off-
balance sheet assets)
2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-eligible)
Proportion of total covered assets funding taxonomy relevant
sectors (Taxonomy-eligible)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Proportion of total covered assets
funding taxonomy relevant sectors
(Taxonomy-aligned)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-aligned)
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
Of which
Use of
Proceeds
Of which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of which
enabling
1
Financial guarantees (FinGuar
KPI)
11.78%
8.42%
-
0.69%
4.62%
-
-
-
-
11.78%
8.42%
-
0.69%
4.62%
2
Assets under management (AuM
KPI)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Institution dislcoses in this template the KPIs for off-balance sheet exposures (financial guarantees and AuM) calculated based on the data disclosed in template 1, on covered assets and applying the formulas proposed in this
template.
Board of Directors' Report – 31 December 2023
152
5.KPI off-balance sheet exposures based on CAPEX
% (compared to total eligible off-balance sheet assets)
2023
Climate Change Mitigation (CCM)
Climate Change Adaptation (CCA)
TOTAL (CCM + CCA)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-
eligible)
Proportion of total covered assets funding taxonomy
relevant sectors (Taxonomy-eligible)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Proportion of total covered
assets funding taxonomy
relevant sectors (Taxonomy-
aligned)
Proportion of total covered assets funding
taxonomy relevant sectors (Taxonomy-aligned)
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
Of which
Use of
Proceeds
Of
which
enabling
Of which
Use of
Proceeds
Of which
transitional
Of
which
enabling
1
Financial guarantees (FinGuar KPI)
32.86%
30.67%
-
0.69%
8.20%
-
-
-
-
32.86%
30.67%
-
0.69%
8.20%
2
Assets under management (AuM KPI)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Institution dislcoses in this template the KPIs for off-balance sheet exposures (financial guarantees and AuM) calculated based on the data disclosed in template 1, on covered assets and applying the formulas proposed in this
template.
Board of Directors' Report – 31 December 2023
153
Disclosures according to ANNEX XII Nuclear energy and Fossil gas related activities
Template 1 Nuclear energy and Fossil gas related activities
Row
Nuclear energy related activities
1
The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity
generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle.
NO
2
The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or
process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades,
using best available technologies.
NO
3
The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat,
including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety
upgrades.
NO
Fossil gas related activities
4
The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity
using fossil gaseous fuels.
YES
5
The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power
generation facilities using fossil gaseous fuels.
NO
6
The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce
heat/cool using fossil gaseous fuels.
NO
Board of Directors' Report – 31 December 2023
154
Template 2 Taxonomy-aligned economic activities (denominator) based on Turnover
Row
Economic activities
Amount and proportion
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/ 2139
in the denominator of the applicable KPI
-
-
-
-
-
-
2
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/ 2139
in the denominator of the applicable KPI
-
-
-
-
-
-
3
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/ 2139
in the denominator of the applicable KPI
-
-
-
-
-
-
4
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/ 2139
in the denominator of the applicable KPI
-
-
-
-
-
-
5
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/ 2139
in the denominator of the applicable KPI
-
-
-
-
-
-
6
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/ 2139
in the denominator of the applicable KPI
-
-
-
-
-
-
7
Amount and proportion of other taxonomy-aligned economic activities
not referred to in rows 1 to 6 above in the denominator of the
applicable KPI
385
0.90%
376
0.88%
8
0.02%
8
Total applicable KPI
385
0.90%
376
0.88%
8
0.02%
Board of Directors' Report – 31 December 2023
155
Template 2 Taxonomy-aligned economic activities (denominator) based on CAPEX
Row
Economic activities
Amount and proportion
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation
(CCA)
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.26 of Annexes I and II to Delegated Regulation 2021/ 2139
in the denominator of the applicable KPI
-
-
-
-
-
-
2
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.27 of Annexes I and II to Delegated Regulation 2021/ 2139
in the denominator of the applicable KPI
-
-
-
-
-
-
3
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.28 of Annexes I and II to Delegated Regulation 2021/ 2139
in the denominator of the applicable KPI
-
-
-
-
-
-
4
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.29 of Annexes I and II to Delegated Regulation 2021/ 2139
in the denominator of the applicable KPI
-
-
-
-
-
-
5
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.30 of Annexes I and II to Delegated Regulation 2021/ 2139
in the denominator of the applicable KPI
-
-
-
-
-
-
6
Amount and proportion of taxonomy-aligned economic activity referred
to in Section 4.31 of Annexes I and II to Delegated Regulation 2021/ 2139
in the denominator of the applicable KPI
-
-
-
-
-
-
7
Amount and proportion of other taxonomy-aligned economic activities
not referred to in rows 1 to 6 above in the denominator of the applicable
KPI
1,249
2.91%
1,247
2.90%
1
-
8
Total applicable KPI
1,249
2.91%
1,247
2.90%
1
-
Board of Directors' Report – 31 December 2023
156
Template 3 Taxonomy-aligned economic activities (numerator) based on Turnover
Row
Economic activities
Amount and proportion
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy-aligned economic activity
referred to in Section 4.26 of Annexes I and II to Delegated Regulation
2021/ 2139 in the numerator of the applicable KPI
-
-
-
-
-
-
2
Amount and proportion of taxonomy-aligned economic activity
referred to in Section 4.27 of Annexes I and II to Delegated Regulation
2021/ 2139 in the numerator of the applicable KPI
-
-
-
-
-
-
3
Amount and proportion of taxonomy-aligned economic activity
referred to in Section 4.28 of Annexes I and II to Delegated Regulation
2021/ 2139 in the numerator of the applicable KPI
-
-
-
-
-
-
4
Amount and proportion of taxonomy-aligned economic activity
referred to in Section 4.29 of Annexes I and II to Delegated Regulation
2021/ 2139 in the numerator of the applicable KPI
-
-
-
-
-
-
5
Amount and proportion of taxonomy-aligned economic activity
referred to in Section 4.30 of Annexes I and II to Delegated Regulation
2021/ 2139 in the numerator of the applicable KPI
-
-
-
-
-
-
6
Amount and proportion of taxonomy-aligned economic activity
referred to in Section 4.31 of Annexes I and II to Delegated Regulation
2021/ 2139 in the numerator of the applicable KPI
-
-
-
-
-
-
7
Amount and proportion of other taxonomy-aligned economic
activities not referred to in rows 1 to 6 above in the numerator
numerator of the applicable KPI
385
100.00%
376
97.85%
8
2.15%
8
Total amount and proportion of taxonomy-aligned economic activities
in the numerator of the applicable KPI
385
100.00%
376
97.85%
8
2.15%
Board of Directors' Report – 31 December 2023
157
Template 3 Taxonomy-aligned economic activities (numerator) based on CAPEX
Row
Economic activities
Amount and proportion
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation
(CCA)
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy-aligned economic activity
referred to in Section 4.26 of Annexes I and II to Delegated
Regulation 2021/ 2139 in the numerator of the applicable KPI
-
-
-
-
-
-
2
Amount and proportion of taxonomy-aligned economic activity
referred to in Section 4.27 of Annexes I and II to Delegated
Regulation 2021/ 2139 in the numerator of the applicable KPI
-
-
-
-
-
-
3
Amount and proportion of taxonomy-aligned economic activity
referred to in Section 4.28 of Annexes I and II to Delegated
Regulation 2021/ 2139 in the numerator of the applicable KPI
-
-
-
-
-
-
4
Amount and proportion of taxonomy-aligned economic activity
referred to in Section 4.29 of Annexes I and II to Delegated
Regulation 2021/ 2139 in the numerator of the applicable KPI
-
-
-
-
-
-
5
Amount and proportion of taxonomy-aligned economic activity
referred to in Section 4.30 of Annexes I and II to Delegated
Regulation 2021/ 2139 in the numerator of the applicable KPI
-
-
-
-
-
-
6
Amount and proportion of taxonomy-aligned economic activity
referred to in Section 4.31 of Annexes I and II to Delegated
Regulation 2021/ 2139 in the numerator of the applicable KPI
-
-
-
-
-
-
7
Amount and proportion of other taxonomy-aligned economic
activities not referred to in rows 1 to 6 above in the numerator
numerator of the applicable KPI
1,249
100.00%
1,247
99.89%
1
0.11%
8
Total amount and proportion of taxonomy-aligned economic
activities in the numerator of the applicable KPI
1,249
100.00%
1,247
99.89%
1
0.11%
Board of Directors' Report – 31 December 2023
158
Template 4 Taxonomy-eligible but not taxonomy-aligned economic activities (denominator) based on Turnover
Row
Economic activities
Amount and proportion
CCM + CCA
Climate change
mitigation
(CCM)
Climate change
adaptation
(CCA)
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy-eligible but not taxonomy-aligned
economic activity referred to in Section 4.26 of Annexes I and II to
Delegated Regulation 2021/ 2139 in the denominator of the applicable
KPI
-
-
-
-
-
-
2
Amount and proportion of taxonomy-eligible but not taxonomy-aligned
economic activity referred to in Section 4.27 of Annexes I and II to
Delegated Regulation 2021/ 2139 in the denominator of the applicable
KPI
-
-
-
-
-
-
3
Amount and proportion of taxonomy-eligible but not taxonomy-aligned
economic activity referred to in Section 4.28 of Annexes I and II to
Delegated Regulation 2021/ 2139 in the denominator of the applicable
KPI
-
-
-
-
-
-
4
Amount and proportion of taxonomy-eligible but not taxonomy-aligned
economic activity referred to in Section 4.29 of Annexes I and II to
Delegated Regulation 2021/ 2139 in the denominator of the applicable
KPI
60
0.14%
60
0.14%
-
-
5
Amount and proportion of taxonomy-eligible but not taxonomy-aligned
economic activity referred to in Section 4.30 of Annexes I and II to
Delegated Regulation 2021/ 2139 in the denominator of the applicable
KPI
-
-
-
-
-
-
6
Amount and proportion of taxonomy-eligible but not taxonomy-aligned
economic activity referred to in Section 4.31 of Annexes I and II to
Delegated Regulation 2021/ 2139 in the denominator of the applicable
KPI
-
-
-
-
-
-
7
Amount and proportion of other taxonomy-eligible but not taxonomy-
aligned economic activities not referred to in rows 1 to 6 above in the
denominator of the applicable KPI
8,811
20.51%
8,761
20.39%
50
0.12%
8
Total amount and proportion of taxonomy eligible but not taxonomy-
aligned economic activities in the denominator of the applicable KPI
8,872
20.65%
8,822
20.53%
50
0.12%
Board of Directors' Report – 31 December 2023
159
Template 4 Taxonomy-eligible but not taxonomy-aligned economic activities (denominator) based on CAPEX
Row
Economic activities
Amount and proportion
CCM + CCA
Climate change
mitigation (CCM)
Climate change
adaptation
(CCA)
Amount
%
Amount
%
Amount
%
1
Amount and proportion of taxonomy-eligible but not taxonomy-
aligned economic activity referred to in Section 4.26 of Annexes
I and II to Delegated Regulation 2021/ 2139 in the denominator
of the applicable KPI.
-
-
-
-
-
-
2
Amount and proportion of taxonomy-eligible but not taxonomy-
aligned economic activity referred to in Section 4.27 of Annexes
I and II to Delegated Regulation 2021/ 2139 in the denominator
of the applicable KPI.
-
-
-
-
-
-
3
Amount and proportion of taxonomy-eligible but not taxonomy-
aligned economic activity referred to in Section 4.28 of Annexes
I and II to Delegated Regulation 2021/ 2139 in the denominator
of the applicable KPI.
-
-
-
-
-
-
4
Amount and proportion of taxonomy-eligible but not taxonomy-
aligned economic activity referred to in Section 4.29 of Annexes
I and II to Delegated Regulation 2021/ 2139 in the denominator
of the applicable KPI.
27
0.06%
27
0.06%
-
-
5
Amount and proportion of taxonomy-eligible but not taxonomy-
aligned economic activity referred to in Section 4.30 of Annexes
I and II to Delegated Regulation 2021/ 2139 in the denominator
of the applicable KPI.
-
-
-
-
-
-
6
Amount and proportion of taxonomy-eligible but not taxonomy-
aligned economic activity referred to in Section 4.31 of Annexes
I and II to Delegated Regulation 2021/ 2139 in the denominator
of the applicable KPI.
-
-
-
-
-
-
7
Amount and proportion of other taxonomy-eligible but not
taxonomy-aligned economic activities not referred to in rows 1
to 6 above in the denominator of the applicable KPI.
9,082
21.14%
9,080
21.13%
3
0.01%
8
Total amount and proportion of taxonomy eligible but not
taxonomy-aligned economic activities in the denominator of
the applicable KPI.
9,110
21.20%
9,107
21.20%
3
0.01%
Board of Directors' Report – 31 December 2023
160
Template 5 Taxonomy non-eligible economic activities based on Turnover
Row
Economic activities
Amount
Percentage
1
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
-
-
2
Amount and proportion of economic activity referred to in row 2 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
-
-
3
Amount and proportion of economic activity referred to in row 3 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
-
-
4
Amount and proportion of economic activity referred to in row 4 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
-
-
5
Amount and proportion of economic activity referred to in row 5 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
-
-
6
Amount and proportion of economic activity referred to in row 6 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
-
-
7
Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows 1 to
6 above in the denominator of the applicable KPI
6,971
16.23%
8
Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of the
applicable KPI
6,971
16.23%
Board of Directors' Report – 31 December 2023
161
Template 5 Taxonomy non-eligible economic activities based on CAPEX
Row
Economic activities
Amount
Percentage
1
Amount and proportion of economic activity referred to in row 1 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.26 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
-
-
2
Amount and proportion of economic activity referred to in row 2 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.27 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
-
-
3
Amount and proportion of economic activity referred to in row 3 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.28 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
-
-
4
Amount and proportion of economic activity referred to in row 4 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.29 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
-
-
5
Amount and proportion of economic activity referred to in row 5 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.30 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
-
-
6
Amount and proportion of economic activity referred to in row 6 of Template 1 that is taxonomy-non-
eligible in accordance with Section 4.31 of Annexes I and II to Delegated Regulation 2021/2139 in the
denominator of the applicable KPI
-
-
7
Amount and proportion of other taxonomy-non-eligible economic activities not referred to in rows 1
to 6 above in the denominator of the applicable KPI
5,869
13.66%
8
Total amount and proportion of taxonomy-non-eligible economic activities in the denominator of the
applicable KPI
5,869
13.66%
INDEPENDENT AUDITOR’S REPORT
To the Shareholders of Piraeus Financial Holdings S.A.
Report on the Audit of the Separate and Consolidated Financial Statements
Opinion
We have audited the separate and consolidated financial statements of Piraeus Financial Holdings S.A. (the Company), which comprise
the separate and consolidated statement of financial position as at 31 December 2023, and the separate and consolidated statements
of income and comprehensive income, separate and consolidated statements of changes in equity and separate and consolidated
statements of cash flows for the year then ended and notes to the financial statements, including material accounting policy information.
In our opinion, the accompanying separate and consolidated financial statements present fairly, in all material respects, the separate
and consolidated financial position of Piraeus Financial Holdings S.A. and its subsidiaries (the Group) as at 31 December 2023 and its
separate and consolidated financial performance and its separate and consolidated cash flows for the year then ended in accordance
with International Financial Reporting Standards (IFRSs), as endorsed by the European Union.
Basis for Οpinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) as they have been incorporated into the Greek
legislation. Our responsibilities under those standards are further described in the “Auditor’s Responsibilities for the Aud it of the
Separate and Consolidated Financial Statements” section of our report. We have been independent of the Company and the consolid
ated subsidiaries during the whole period of our appointment, in accordance with the International Ethics Standards Board for Ac
countants’ Code of Ethics for Professional Accountants (IESBA Code), as incorporated into the Greek legislation and the ethical re-
quirements in Greece, relevant to the audit of the separate and consolidated financial statements. We have fulfilled our ethical re-
quirements in accordance with the applicable legislation and the abovementioned Code of Ethics. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Αudit Μatters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the separate and
consolidated financial statements of the current year. These matters and the assessed risks of material misstatements were addressed
in the context of our audit of the separate and consolidated financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters.
,
D e l o i tt e C e r ti f i e d Pu bli c
Deloitte Certified Public
Accountants S.A.
3a Fragkokklisias & Granikou str.
Marousi Athens GR 151-25
Greece
Tel: +30 210 6781 100
www.deloitte.gr
Key audit matters
How our audit addressed the Key audit matters
Allowance for expected credit losses (ECL) for loans and advances to customers at amortised cost
Loans and advances to customers at amortised cost of the Group
amounted to 37,527 million as at 31 December 2023, (€ 37,367
million as at 31 December 2022) and allowance for expected credit
losses amounted to € 796 million as at 31 December 2023 (€ 1,385
as at 31 December 2022).
Measurement of ECL on loans at amortised cost is considered a
key audit matter as the determination of assumptions used
involves critical Management judgments and accounting
estimates with inherent risk, high level of subjectivity, and
complexity.
The most significant Management judgements and accounting
estimates, relate to:
• The timely identification of exposures with significant increase in
credit risk and credit impaired exposures
• The determination of the assumptions used expected credit risk
models to assess the credit risk related to the exposure and the
expected future cash flows of the debtors.
• Assumptions of expected future cash flows of individually
assessed credit impaired exposures, including assessment
approach, valuation of collaterals, and the time to liquidate the
collaterals.
• The Identification and valuation of post model adjustments
made by Management to include any impact not captured by the
models.
Management has provided further information about principles
and accounting policies for determining the ECL on loans and
advances to customers at amortised cost and management of
credit risk in Notes 2.4.19, 3.1, 3.2, 4.1, 4.2, 4.3, 4.4 and 23 to the
consolidated financial statements.
Based on our risk assessment and following a risk-based approach,
we have evaluated the impairment methodologies applied and
assumptions made by Management in relation to this key audit
matter, and we performed, inter alia, the following audit
procedures:
• With the support of our financial risk modelling specialists
where appropriate, we assessed the design and implementation
of relevant internal controls over the ECL estimate including the
controls around:
- the incorporation of the model’s outcome within the
relevant systems and the calculation of the ECL estimate
- the significant assumptions used in the ECL models
- model monitoring and model validation
- governance and review of post model adjustments
- the determination of staging criteria and staging allocation
- the selection of macro-economic scenarios and probability
weightings
- accuracy and completeness of data used in the credit risk
models.
• We assessed the design and implementation of relevant controls
over the ECL measurement of credit impaired loans assessed on
an individual basis which included the controls around the
determination of the appropriate approach and the controls
around the estimation of the expected future cash flows.
• With the support of our financial risk modelling specialists we:
- assessed the appropriateness of the Group’s IFRS9
impairment methodologies,
- assessed the appropriateness of the criteria used to allocate
loans to stages in accordance with IFRS9. On a sample basis
tested the timely identification of exposures with significant
increase in credit risk and credit impaired exposures,
- assessed the methodology, the reasonableness and
appropriateness of the macroeconomic variables, scenarios
and weightings used in the models and compared them to
macroeconomic variables included in a variety of external
market sources.
• We further performed substantive procedures to test the
accuracy and completeness of critical data used in the models
by agreeing a sample of ECL calculation data points to relevant
systems or documentation.
• Οn a sample basis we assessed whether, the approach used in
the measurement of impairment for the individually assessed
credit impaired exposures is appropriate, and we tested the
reasonableness of
Key audit matters
How our audit addressed the Key audit matters
Allowance for expected credit losses (ECL) for loans and advances to customers at amortised cost -Continued
significant assumptions used, including valuation of collaterals
(where we also made use of our real estate specialists) time to
liquidate collaterals, and the estimation of the discounted
future cash flows.
• We evaluated the post model adjustments, made by
Management at year end in response to current
economic conditions.
Given the complexity and granularity of the related disclosures,
we further assessed their completeness and accuracy in
accordance with the provisions of the relevant accounting
standards.
Key audit matters
How our audit addressed the Key audit matters
Recoverability of Deferred Tax Asset (DTA)
The Group has recognized deferred tax assets of €5,703 million as at 31
December 2023, (€ 5,974 million as at 31 December 2022).
The recognition and measurement of the deferred tax asset is considered
a key audit matter as it involves a high degree of judgment in making
estimates relating to the existence of future taxable profits, which are
complex and subjective due to their forward-looking nature.
The most significant estimates and areas with increased level of
management judgement include:
- The Revenue, ECL and Cost forecasts included in the annual budget
and the three-year business plan.
- Forward looking information and Management projections used to
extend the period covered under the 3-year business plan to the
time when the deferred tax asset can be utilized for tax purposes.
- Adjustments required for the conversion of accounting profits to
taxable profits.
Management has provided further information about the deferred tax
asset in Notes 2.4.34, 3.2, 4.17, 16 and 38 to the consolidated financial
statements.
Based on our risk assessment, we evaluated the method used to
determine the amount of deferred tax
asset recognized and examined the budgets prepared and
significant assumptions made by
Management relating to the future taxable profits.
Our examination included, inter alia the following audit
procedures:
• We assessed the design and implementation and tested
the operating effectiveness of the relevant internal
controls over the preparation and approval of budgets and
forecasts, including the internal controls over the
significant assumptions, inputs, calculation and
methodologies used for this purpose.
• We compared previous budgets to actual results, to
evaluate the forecasting ability of Management.
• We compared the significant assumptions used by
Management in the deferred tax asset recoverability
exercise with the approved budget and the 3-year business
plan for consistency and performed a sensitivity analysis.
• We assessed whether significant assumptions used beyond
the business plan period were reasonable in the context of
the long-term economic outlook.
• We assessed the appropriateness of the adjustments made
by Management to convert anticipated accounting profits
into taxable profits, considering the tax legislation
currently in force.
We evaluated the completeness and accuracy of the disclosures
in the financial statements including the appropriateness of the
assumptions disclosed.
Carrying value of Investment in Piraeus Bank (Company only)
The Company’ Investment in Subsidiaries amount to €5,573 million as at
31 December 2023, (€ 5,558 million as at 31 December 2022).
Investment in Subsidiaries is presented at cost in the Company’s financial
statements unless there are indicators of impairment, in which case it is
presented at cost less impairment.
Management estimated the recoverable amount in its investment in
Piraeus Bank S.A. using the Value in Use (“VIU”) which is higher than the
fair value less cost to sell. Management’s assessment resulted in a carrying
value of €5,508 million as at 31 December 2023 (€ 5,504 million as at 31
December 2022).
The calculation of VIU is dependent on certain key assumptions around the
future cash flows which have been forecasted using the Group’s 3-year
business plan, the discount rates and the terminal growth rates. These
assumptions are judgmental and require management to make estimates
which are subjective due to their forward-looking nature.
The most significant estimates and areas with greater level of management
judgement include:
- The Revenue, ECL and Cost forecasts
- Long term growth rates and
Based on our risk assessment, we evaluated the methodology
applied and assumptions made by Management in relation to this
key audit matter, and we performed, inter alia, the following audit
procedures:
• We assessed the design and the implementation and
tested the operating effectiveness of the relevant internal
controls over the preparation and review of the forecasts,
and the significant assumptions, the inputs, the
methodology and the calculations, used in the VIU model.
• We compared previous budgets to actual results, to
evaluate the forecasting ability of Management.
• We evaluated the reasonableness of certain key
assumptions and considerations made when developing
the estimated future cash flows.
• With the assistance of our fair valuation specialists we:
- Evaluated the appropriateness of the discount rate
and of the terminal growth rate used.
Key audit matters
How our audit addressed the Key audit matters
Carrying value of Investment in Piraeus Bank (Company only) - Continued
- Discount rates
Management has provided further information in Notes 3.2 and 25 to the
financial statements.
- Assessed whether the methodology over
management’s calculation of the VIU is compliant
with the requirements of the IFRS.
We evaluated the completeness and accuracy of the disclosures
in the financial statements including the appropriateness of the
assumptions disclosed.
Information Technology General Controls and controls over financial reporting
The Group’s financial reporting processes are highly dependent on
Information Technology (“IT”) systems supporting automated accounting
and reconciliation procedures, thus leading to a complex IT environment,
pervasive in
nature and in which a significant number of transactions are processed
daily, across numerous locations.
This is a key audit matter since it is important that controls over access
security, cyber risks, system change control and datacenter and network
operations, are designed and
operate effectively to ensure complete and accurate financial records and
information.
Management has provided further information about General
Information Technology Controls under the header “Internal Control
System and Risk Management” and “Other Governance Issues” in Section
4 of the Corporate Governance Statement for the year 2023.
Based on our risk assessment, we have assessed the design and
operating effectiveness of General Information Technology
Controls (GITCs) relevant for financial reporting. Our assessment
included the evaluation of user access over applications,
operating systems and databases, the process followed over
changes made to information systems, as well as the evaluation
of datacenter and network IT operations.
In summary, our key audit activities included, among others,
testing of:
• User access provisioning and de provisioning process.
• Privileged access to applications, operating systems and
databases.
• Periodic review of user access rights.
• Change management process over applications, operating
systems and databases (i.e. user request, user acceptance
testing and final approval for promotion to production).
• Datacenter and network operations.
Other Information
Management is responsible for the other information. The other information, included in the Annual Financial Report prepared in
accordance with Law 3556/2007, comprises the Board of Directors’ Annual Report, referred to in the section “Report on Other Legal and
Regulatory Requirements”, the Statement by the Members of the Board of Directors, the Explanatory Report and the Corporate
Governance Statement but does not include the separate and consolidated financial statements and our auditor’s report thereon.
Our opinion on the separate and consolidated financial statements does not cover the other information and we will not express any form
of assurance conclusion thereon.
In connection with our audit of the separate and consolidated financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the separate and consolidated financial statements or
our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement in this other information, we are required to report that fact. We have nothing to report
in this regard.
Responsibilities of Management and Those Charged with Governance for the separate and consolidated financial statements
Management is responsible for the preparation and fair presentation of the separate and consolidated financial statements in accordance
with IFRSs, as endorsed by the European Union, and for such internal control as Management determines is necessary to enable the
preparation of separate and consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the separate and consolidated financial statements, Management is responsible for assessing the Company’s and the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless Management either intends to liquidate the Company and the Group or to cease operations, or has no realisti c
alternative but to do so.
The Audit Committee (article 44 of Law 4449/2017) of the Company is responsible for overseeing the Company’s and Group’s financial
reporting process.
Auditor’s Responsibilities for the audit of the separate and consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the separate and consolidated financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs, as these have been
incorporated into Greek legislation, will always detect a material misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these separate and consolidated financial statements.
As part of an audit in accordance with ISAs, as these have been incorporated into Greek legislation, we exercise professional judgment
and maintain professional scepticism throughout the audit.
We also:
• Identify and assess the risks of material misstatement of the separate and consolidated financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s and Group’s internal
control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosur es
made by Management.
• Conclude on the appropriateness of Management’s use of the going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the
Company’s and Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the separate and consolidated financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence
obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company and the Group
to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the separate and consolidated financial statements, including the
disclosures, and whether the separate and consolidated financial statements represent the underlying transactions and events
in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
Group to express an opinion on the separate and consolidated financial statements. We are responsible for the direction,
supervision and performance of the Company and the Group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding
independence, and communicate with them all relationships and other matters that may reasonably be thought to impair our
independence, and where applicable, related safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the
audit of the separate and consolidated financial statements of the current year and are therefore the key audit matters.
Report on Other Legal and Regulatory Requirements
1) Board of Directors’ Annual Report
Taking into consideration that Management is responsible for the preparation of the Board of Directors’ Annual report which
also includes the Corporate Governance Statement, according to the provisions of paragraph 5 of article 2 of Law 4336/2015
(part B) we note the following:
a) The Board of Directors’ report includes the Corporate Governance Statement which provides the information
required by article 152 of Law 4548/2018.
b) In our opinion, the Board of Directors’ report has been prepared in accordance with the applicable legal
requirements of articles 150 - 151 and 153 - 154 and paragraph 1 (cases c and d) of article 152 of Law 4548/2018
and its content is consistent with the accompanying separate and consolidated financial statements for the year
ended 31 December 2023.
c) Based on the knowledge we obtained during our audit of the Company and the Group and its environment, we have
not identified any material inconsistencies in the Board of Directors’ Annual Report.
2) Additional Report to the Audit Committee
Our audit opinion on the separate and consolidated financial statements is consistent with the additional report to the Audit
Committee of the Company referred to in Article 11 of the European Union (EU) Regulation 537/2014.
3) Non-audit Services
We have not provided to the Company and the Group any prohibited non-audit services referred to in Article 5 of EU
Regulation 537/2014.
The allowed non-audit services provided to the Company and the Group during the year ended 31 December 2023 have been
disclosed in Note 48 to the separate and consolidated financial statements.
4) Appointment
We were appointed as statutory auditors for the first time by the Annual General Assembly of shareholders of the Company
(former Piraeus Bank S.A.) on 28 June 2017. Our appointment has been, since then, uninterrupted renewed by the Annual
General Assembly of shareholders of the Company for 7 consecutive years.
5) Internal Regulation
The Company retains an Internal Regulation according to the provisions of article 14 of Law 4706/2020.
6) Assurance Report on European Single Electronic Format reporting
We have examined the digital file of Piraeus Financial Holdings S.A. (hereinafter the Company or/and the Group), prepared in accordance with
the European Single Electronic Format (ESEF), defined by the Commission Delegated EU Regulation 2019/815 as amended by EU Regulation
2020/1989 (“ESEF Regulation”), which include the separate and consolidated financial statements of the Company and the Group for the year
ended 31 December 2023 in XHTML format as well as the XBRL file (M6AD1Y1KW32H8THQ6F76-2023-12-31-el.zip) with the appropriate tagging
on these consolidated financial statements, including the notes to the financial statements.
Regulatory Framework
The ESEF digital files are prepared in accordance with the ESEF Regulation, and the Interpretation Announcement 2020/C 379/01 of the European
Commission dated 10 November 2020, as provided by L.3556/2007 and the relevant announcements of the Hellenic Capital Market Commission and the
Athens Stock Exchange (the “ESEF Regulatory Framework”). In summary this Regulatory Framework includes, inter alia, the foll owing requirements:
- Annual financial statements shall be prepared in XHTML format
- In regards to the consolidated financial statements prepared in accordance with International Financial Reporting Standards, financial information
included in the consolidated Statement of Financial Position, consolidated statement of income and comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flows as well as financial information included in the notes to these financial
statements shall be tagged with XBRL mark-up (“XBRL tags” and “block tag”) in accordance with ESEF Taxonomy, as currently in force. The technical
specifications of ESEF, including the related taxonomy, are included in ESEF Regulatory Technical Standards.
Regulatory requirements included in ESEF Regulatory Framework consist of an appropriate basis for the purpose of expressing a conclusion that provides
reasonable assurance.
Responsibilities of Management and Those Charged with Governance
Management is responsible for the preparation and submission of these separate and consolidated financial statements of the Company and the Group for
the year ended 31 December 2023, in accordance with the requirements set by the ESEF Regulatory Framework and for such internal controls that
Management determines are necessary to enable the preparation of the digital files that are free from material misstatement, whether due to fraud o r
error.
Auditor’s responsibilities
Our responsibility is to design and perform this assurance procedure in accordance with the decision 214/4/11-02-2022 of the board of Hellenic Accounting
and Auditing Oversight Board (HAASOB) and the “Guidelines in connection with the procedures and the assurance report of the certified auditors on the
ESEF reported of Issuers with listed shares in the Hellenic capital market” dated 14/02/2022 as issued by the Institute of Ce rtified Public Accountants (the
“ESEF Guidelines”) in order to obtain reasonable assurance about whether the separate and consolidated financial statements of the Company an d the
Group, prepared by Management in accordance with ESEF, comply in all material respects with the ESEF Regulatory Framework, as currently in force.
In conducting this work, we have complied with the International Ethics Standards Board for Accountants’ Code of Ethics for P rofessional Accountants (IESBA
Code), as incorporated into the Greek legislation and additionally we have complied with ethical requirements regarding independence, in
accordance with Law 4449/2017 and EU Regulation No 537/2014.
The assurance work performed, is limited to the items included in the ESΕF Guidelines and has been performed in accordance with the International
Standard on Assurance Engagements 3000 “Assurance engagements other than audits or review of historical financial information”. Reasonable
assurance is a high level of assurance but is not a guarantee that this work will always detect a material misstatement when it exists relating to the
compliance with the requirements of ESEF Regulatory Framework.
This document has been prepared by Deloitte Certified Public Accountants Societe Anonyme.
Deloitte Certified Public Accountants Societe Anonyme, a Greek company, registered in Greece with registered number 0001223601000 and its registered office at
Marousi, Attica, 3a Fragkokklisias & Granikou str., 151 25, is one of the Deloitte Central Mediterranean S.r.l. (“DCM”) count ries. DCM, a company limited by guarantee
registered in Italy with registered number 09599600963 and its registered office at Via Tortona no. 25, 20144, Milan, Italy is one of the Deloitte NSE LLP geographies.
Deloitte NSE LLP is a UK limited liability partnership and member firm of DTTL, a UK private company limited by guarantee.
DTTL and each of its member firms are legally separate and independent entities. DTTL, Deloitte NSE LLP and Deloitte Central Mediterranean S.r.l. do not provide services
to clients. Please see www.deloitte.com/about to learn more about our global network of member firms.
Conclusion
Based on the procedures performed and the evidence obtained, we conclude that the separate and the consolidated financial statements of the Company
and the Group for the year ended 31 December 2023 prepared in XHTML format as well as the XBRL file (M6AD1Y1KW32H8THQ6F76-202 3-12-31-el.zip)
with the appropriate tagging on these consolidated financial statements, including the notes, are prepared in all material respects in accordance with the
requirements of ESEF Regulatory Framework.
Athens, 27 February 2024
The Certified Public Accountant
Alexandra V. Kostara
Reg. No. SOEL:19981
Deloitte Certified Public Accountants S.A.
3a Fragoklissias & Granikou Str.
151 25 Maroussi
Reg. No. SOEL: Ε120
Certified true translation of the original in the Greek language
Alexandra V. Kostara
Piraeus Financial Holdings Group – 31 December 2023
176
The notes on pages 183 to 396 form an integral part of the Financial Statements
Income Statement
€ Million
Note
Group
Company
Year ended
Year ended
31/12/2023
31/12/2022
31/12/2023
31/12/2022
CONTINUING OPERATIONS
Interest and similar income
6
2,799
1,691
103
106
Ιnterest expense and similar charges
6
(797)
(339)
(69)
(69)
NET INTEREST INCOME
2,003
1,353
34
37
Fee and commission income
7
554
508
47
44
Fee and commission expense
7
(86)
(87)
(35)
(30)
NET FEE AND COMMISSION INCOME
468
421
12
14
Income from non-banking activities
8
79
64
-
-
Dividend income
46.2
1
2
53
53
Net gains / (losses) from financial instruments measured at fair value through profit or
loss ("FVTPL")
9
23
359
-
(8)
Net gains/ (losses) from financial instruments measured at fair value through other
comprehensive income ("FVTOCI")
10
2
111
-
-
Net gains / (losses) from derecognition of financial instruments measured at amortised
cost
(1)
(34)
-
-
Net gains / (losses) from loss of control over subsidiaries / disposal of associates and
joint ventures
25
32
278
-
-
Net other income / (expenses)
11
-
29
(1)
(1)
TOTAL NET INCOME
2,607
2,582
98
94
Staff costs
12
(442)
(446)
(3)
(3)
Administrative expenses
13
(315)
(337)
(7)
(5)
Depreciation and amortization
26, 27
(106)
(106)
-
-
Net gain / (losses) from sale of property and equipment and intangible assets
-
(1)
-
-
TOTAL OPERATING EXPENSES
(863)
(889)
(10)
(8)
PROFIT BEFORE PROVISIONS, IMPAIRMENT AND OTHER CREDIT-RISK RELATED
EXPENSES
1,744
1,693
88
86
Impairment (losses) / releases on loans and advances to customers at amortised cost
4
(404)
(472)
(1)
11
Οther credit-risk related expenses on loans and advances to customers at amortised
cost
14
(136)
(142)
-
-
Impairment (losses) / releases on other assets
30
(52)
(47)
(1)
-
Impairment on subsidiaries and associates
25
(1)
(2)
-
-
Impairment on property and equipment and intangible assets
26, 27
(29)
(4)
-
-
Impairment (losses) / releases on debt securities at amortised cost
9
(4)
16
6
Other provision (charges) / releases
15
(38)
(13)
-
-
Share of profit / (loss) of associates and joint ventures
25
(15)
29
-
-
PROFIT BEFORE INCOME TAX
1,078
1,037
101
103
Income tax expense
16
(292)
(140)
-
-
PROFIT FOR THE PERIOD FROM CONTINUING OPERATIONS
786
897
102
103
DISCONTINUED OPERATIONS
Profit after income tax from discontinued operations
-
51
-
-
PROFIT FOR THE PERIOD
786
948
102
103
From continuing operations
Profit attributable to the equity holders of the parent
788
899
-
-
Non controlling interest
(2)
(2)
-
-
From discontinued operations
Profit attributable to the equity holders of the parent
-
51
-
-
Non controlling interest
-
-
-
-
Earnings per share attributable to the equity holders of the parent (in €):
From continuing operations
- Basic & Diluted
17
0.63
0.72
-
-
From discontinued operations
- Basic & Diluted
17
-
0.04
-
-
Total basic and diluted
17
0.63
0.76
-
-
Piraeus Financial Holdings Group – 31 December 2023
177
The notes on pages 183 to 396 form an integral part of the Financial Statements
Statement of Comprehensive Income
€ Million
Note
Group
Company
Year ended
Year ended
31/12/2023
31/12/2022
31/12/2023
31/12/2022
CONTINUING OPERATIONS
Profit for the year (A)
786
897
102
103
Other comprehensive income / (expense), net of tax:
Items that may be reclassified subsequently to profit or loss
Change in reserve from debt securities measured at FVTOCI
18
22
(129)
-
-
Change in currency translation reserve
18
(1)
(9)
-
-
Change in cash flow hedge reserve
18
2
-
-
-
Items that will not be reclassified subsequently to profit or loss
Change in reserve from equity instruments measured at FVTOCI
18
(21)
23
-
-
Change in property revaluation reserve
18
2
7
-
-
Change in reserve of actuarial gains / (losses)
18
(2)
7
-
-
Other comprehensive income / (expense), net of tax (B)
18
2
(101)
-
-
Total comprehensive income, net of tax (A)+(B)
788
796
102
103
- Attributable to the equity holders of the parent
790
798
-
-
- Non controlling interest
(2)
(2)
-
-
DISCONTINUED OPERATIONS
Profit for the year
-
51
-
-
Total comprehensive income, net of tax
-
51
-
-
- Attributable to the equity holders of the parent
-
51
-
-
- Non controlling interest
-
-
-
-
Piraeus Financial Holdings Group – 31 December 2023
178
The notes on pages 183 to 396 form an integral part of the Financial Statements
Statement of Financial Position
€ Million
Note
Group
Company
31/12/2023
31/12/2022
31/12/2023
31/12/2022
As
reclassified
As reclassified
ASSETS
Cash and balances with Central Banks
19
10,567
9,653
-
-
Due from banks
20
1,034
1,415
34
45
Financial assets at FVTPL
22
609
548
-
-
Financial assets mandatorily measured at FVTPL
22
234
182
-
-
Derivative financial instruments
21
191
220
-
-
Loans and advances to customers at amortised cost
23
37,527
37,367
-
-
Loans and advances to customers mandatorily measured at FVTPL
53
52
-
-
Investment securities
24
13,042
11,741
850
798
Investment property
28
1,757
1,522
-
-
Investments in subsidiaries
25
-
-
5,573
5,558
Investments in associated undertakings and joint ventures
25
1,255
1,023
-
-
Property and equipment
27
732
728
1
1
Intangible assets
26
347
312
-
-
Tax receivables
37
161
145
7
12
Deferred tax assets
38
5,703
5,974
-
-
Other assets
30
2,996
3,357
37
44
Assets held for sale
29
241
406
-
-
TOTAL ASSETS
76,450
74,645
6,503
6,457
LIABILITIES
Due to banks
31
4,618
6,185
-
-
Due to customers
32
59,567
58,372
-
-
Derivative financial instruments
21
295
410
-
-
Debt securities in issue
33
1,886
849
-
-
Other borrowed funds
34
939
937
939
936
Current income tax liabilities
13
7
-
-
Deferred tax liabilities
38
9
10
-
-
Retirement and termination benefit obligations
39
52
55
-
-
Provisions
36
164
123
-
-
Other liabilities
35
1,459
1,113
60
55
Liabilities held for sale
-
2
-
-
Fair Value changes of hedged items in portfolio hedges of interest rate risk
21
94
-
-
-
TOTAL LIABILITIES
69,097
68,064
999
992
EQUITY
Share capital
42
1,163
1,163
1,163
1,163
Share premium
42
3,255
3,555
3,255
3,555
Οther equity instruments
600
600
600
600
Less: Treasury shares
42
(15)
-
(11)
-
Other reserves and retained earnings
43
2,296
1,235
497
147
Capital and reserves attributable to the equity holders of the parent
7,298
6,553
5,503
5,465
Non controlling interest
56
28
-
-
TOTAL EQUITY
7,353
6,581
5,503
5,465
TOTAL LIABILITIES AND EQUITY
76,450
74,645
6,503
6,457
Piraeus Financial Holdings Group – 31 December 2023
179
The notes on pages 183 to 396 form an integral part of the Financial Statements
As at 31 December 2023, the Group and the Company have changed the presentation of financial assets measured at FVTOCI and Debt
securities at amortised cost, by classifying them now into a single line item “Investment securities”. Comparative information has been
reclassified accordingly (refer to Note 49).
Piraeus Financial Holdings Group – 31 December 2023
180
The notes on pages 183 to 396 form an integral part of the Financial Statements
Statement of Changes in Equity
Group
Note
Attributable to equity shareholders of the parent entity
€ Million
Share
Capital
Share
Premium
Other
equity
instrument
s
Treasury
shares
Currency
Translation
Reserve
Cash flow
hedge
reserve
Reserve from
financial
assets at
FVTOCI
Property
revaluation
reserve
Other
reserves
Non-
taxed
reserves
Retained
earnings
Total
Non
controlling
interest
Total
Opening balance as at 1/1/2022
1,188
18,112
600
(2)
(54)
-
144
-
118
351
(14,669)
5,787
15
5,803
Reclassification due to change in the presentation of non-
taxed reserves
(1)
-
-
-
-
-
-
-
-
-
37
(37)
-
-
-
Opening balance as at 1/1/2022 (as reclassified)
(1)
1,188
18,112
600
(2)
(54)
-
144
-
118
388
(14,706)
5,787
15
5,803
Other comprehensive income / (expense), net of tax
18
-
-
-
-
(9)
-
(106)
7
-
-
7
(101)
-
(101)
Profit / (loss), net of tax for the year
-
-
-
-
-
-
-
-
-
-
949
949
(2)
948
Total comprehensive income/ (expense) for the year
-
-
-
-
(9)
-
(106)
7
-
-
956
849
(2)
847
Share capital decrease in kind
(25)
-
-
-
-
-
-
-
-
-
-
(25)
-
(25)
Offset of share premium by writing-off accumulated losses
-
(14,557)
-
-
-
-
-
-
-
-
14,557
-
-
-
Payment to the holders of AT1 capital instrument
-
-
-
-
-
-
-
-
-
-
(53)
(53)
-
(53)
(Purchases) / sales of treasury shares
-
-
-
1
-
-
-
-
-
-
-
1
-
1
Transfer between reserves and retained earnings
-
-
-
-
-
-
-
-
1
-
(1)
-
-
-
Transfer of the accumulated reserve from equity securities
measured at FVTOCI to retained earnings upon disposal
-
-
-
-
-
-
-
-
-
-
(1)
(1)
-
(1)
Disposals and movements in participating interests
-
-
-
-
-
-
-
-
(1)
-
(6)
(7)
14
8
Balance as at 31/12/2022
1,163
3,555
600
-
(63)
-
38
7
118
388
747
6,553
28
6,581
Opening balance as at 1/1/2023
1,163
3,555
600
-
(63)
-
38
7
118
388
747
6,553
28
6,581
Other comprehensive income / (expense), net of tax
18
-
-
-
-
(1)
2
1
2
-
-
(2)
2
-
2
Profit / (loss), net of tax for the year
-
-
-
-
-
-
-
-
-
-
788
788
(2)
786
Total comprehensive income/ (expense) for the year
-
-
-
-
(1)
2
1
2
-
-
786
790
(2)
788
Offset of share premium by writing-off accumulated losses
42
-
(301)
-
-
-
-
-
-
-
-
301
-
-
-
Payment to the holders of AT1 capital instrument
-
-
-
-
-
-
-
-
-
-
(53)
(53)
-
(53)
(Purchases) / sales of treasury shares
42
-
-
-
(15)
-
-
-
-
-
-
1
(14)
-
(14)
Non-taxed reserves
-
-
-
-
-
-
-
-
-
23
(23)
-
-
-
Share based payment
-
-
-
-
-
-
-
-
-
-
1
1
-
1
Transfer between reserves and retained earnings
-
-
-
-
-
-
-
-
3
-
(3)
-
-
-
Transfer of the accumulated reserve from equity securities
measured at FVTOCI to retained earnings, upon disposal
-
-
-
-
-
-
-
-
-
-
34
34
-
34
Disposals and movements in participating interests
-
-
-
-
-
-
-
-
7
-
(19)
(12)
29
17
Balance as at 31/12/2023
1,163
3,255
600
(15)
(64)
2
40
9
127
411
1,771
7,298
56
7,353
Piraeus Financial Holdings Group – 31 December 2023
181
The notes on pages 183 to 396 form an integral part of the Financial Statements
Company
Note
Share
Capital
Share
Premium
Other equity
instruments
Treasury
shares
Other
reserves
Non-taxed
reserves
Retained
earnings
Total
€ Million
Opening balance as at 1/1/2022
1,188
18,112
600
-
96
351
(14,908)
5,439
Profit, net of tax for the year
-
-
-
-
-
-
103
103
Total comprehensive income for the year
-
-
-
-
-
-
103
103
Share capital decrease in kind
(25)
-
-
-
-
-
-
(25)
Offset of Share premium by writing-off accumulated losses
-
(14,557)
-
-
-
-
14,557
-
Payment to the holders of AT1 capital instrument
-
-
-
-
-
-
(53)
(53)
Balance as at 31/12/2022
1,163
3,555
600
-
96
351
(301)
5,465
Opening balance as at 1/1/2023
1,163
3,555
600
-
96
351
(301)
5,465
Profit, net of tax for the year
-
-
-
-
-
-
102
102
Total comprehensive income for the year
-
-
-
-
-
-
102
102
Offset of Share premium by writing-off accumulated losses
42
-
(301)
-
-
-
-
301
-
Payment to the holders of AT1 capital instrument
-
-
-
-
-
-
(53)
(53)
(Purchases) / sales of treasury shares
42
-
-
-
(11)
-
-
-
(11)
Share based payments
-
-
-
-
-
-
1
1
Balance as at 31/12/2023
1,163
3,255
600
(11)
96
351
50
5,503
(1)
As of 31 December 2023, the Group has changed the presentation of certain types of reserves, after taking into account their nature and purpose in accordance with the applicable
legal and tax framework in Greece. In particular, reserves of € 37 million, which were formed prior to 2022, and relate mainly to dividends and gains from the sale of participations,
formerly classified under retained earnings, are now presented as “Non-taxed reserves”. Comparative information has been reclassified to ensure consistency with the aforementioned
changes in presentation of non-taxed reserves and retained earnings (refer to Note 49).
.
Piraeus Financial Holdings Group – 31 December 2023
182
The notes on pages 1 83 to 396 form an integral part of the Financial Statements
Cash Flow Statement
€ Million
Note
Group
Company
Year ended
Year ended
31/12/2023
31/12/2022
31/12/2023
31/12/2022
Cash flows from operating activities
Profit before income tax
1,078
1,087
101
103
Adjustments to profit before income tax:
Add: provisions and impairment
514
544
(14)
(17)
Add: depreciation and amortisation charge
106
108
-
-
Add: retirement benefits, cost of voluntary exit scheme and shared based payment
12
72
62
-
-
Net (gain)/ losses from valuation of financial instruments measured at FVTPL
207
381
-
1
Net (gain)/ losses from financial instruments measured at FVTOCI
(2)
(111)
-
-
(Gains)/ losses from investing activities
(29)
(401)
(53)
(53)
Accrued interest from investing and financing activities
102
71
69
69
Cash flows from operating activities before changes in operating assets and liabilities
2,048
1,742
104
104
Changes in operating assets and liabilities:
Net (increase)/ decrease in cash and balances with Central Banks
(27)
(568)
-
-
Net (increase)/ decrease in financial instruments measured at FVTPL
(453)
403
-
-
Net (increase)/ decrease in financial assets mandatorily measured at FVTPL
24
12
-
7
Net (increase)/ decrease in debt securities at amortised cost
(650)
(2,328)
(37)
(32)
Net (increase)/ decrease in amounts due from banks
(28)
655
-
-
Net (increase)/ decrease in loans and advances to customers
(651)
(1,773)
-
-
Net (increase)/ decrease in other assets
208
133
9
2
Net increase/ (decrease) in amounts due to banks
(1,188)
(8,016)
-
-
Net increase/ (decrease) in amounts due to customers
1,193
2,938
-
-
Net increase/ (decrease) in other liabilities
318
(92)
5
-
Net cash flow from operating activities before income tax payment
795
(6,893)
81
81
Income tax paid
(17)
(10)
-
-
Net cash inflow / (outflow) from operating activities
779
(6,903)
81
81
Cash flows from investing activities
Purchases of property and equipment
(76)
(98)
-
-
Proceeds from disposal of property and equipment and intangible assets
48
20
-
-
Purchases of intangible assets
26
(92)
(71)
-
-
Proceeds from disposal of assets held for sale other than loans and advances to customers
3
300
-
-
Purchases of financial assets at FVTOCI
(2,238)
(2,001)
-
-
Proceeds from disposal of financial assets at FVTOCI
1,774
2,656
-
-
Interest received on financial assets at FVTOCI
13
36
-
-
Acquisition of subsidiaries, net of cash and cash equivalents
(116)
(102)
(11)
(19)
Proceeds from disposal of subsidiaries, net of cash and cash equivalents disposed
34
7
-
-
Acquisition, establishment and participation in share capital increases of associates and joint ventures
(121)
-
-
-
Proceeds from disposal of associates and share capital decreases
54
8
-
-
Dividends received
19
8
53
53
Net cash inflow/ (outflow) from investing activities
(698)
763
42
33
Cash flows from financing activities
Repayment of AT 1 capital instrument
(53)
(53)
(53)
(53)
Proceeds from issue of debt securities in issue and other borrowed funds
992
346
-
-
Repayment of debt securities in issue and other borrowed funds
-
(470)
-
-
Interest paid on debt securities in issue and other borrowed funds
(91)
(91)
(66)
(66)
Proceeds from sales of treasury shares
65
26
-
-
Purchases of treasury shares
(83)
(25)
(15)
-
Repayments of lease liabilities
(44)
(26)
-
-
Net cash inflow / (outflow) from financing activities
786
(292)
(134)
(119)
Effect of exchange rate changes on cash and cash equivalents
(26)
(35)
-
-
Net increase / (decrease) in cash and cash equivalents (Α)
841
(6,467)
(11)
(5)
Cash and cash equivalents at the beginning of the year (B)
9,401
15,868
45
50
Cash and cash equivalents at the end of the year (A) + (B)
45
10,242
9,401
34
45
Piraeus Financial Holdings Group – 31 December 2023
183
1 General information
Piraeus Financial Holdings S.A. (hereinafter the “Company”), registered under General Commercial Registry (“GEMI”) number
225501000, was established in 1916 and its shares are registered and have been listed on the Main Market of the Athens
Stock Exchange since 1918.
The Company operates in the form of a Société Anonyme, in accordance with the provisions of Greek Law 4548/2018, as
currently in force, as well as the applicable regulatory framework on the operation of listed companies. In addition, as a
financial holding company, it is subject to the relevant provisions of Law 4261/2014 as amended and in force and it is directly
supervised by the European Central Bank (“ECB”).
According to its codified articles of association, the Company’s business scope includes, inter alia, activities re lated to directly
and indirectly participating in domestic and/ or foreign legal entities and other entities, undertakings and companies
established or to be established, of any form and purpose, undertaking or carrying on insurance intermediation and insurance
distribution activities on a retainer, pursuant to the provisions of Greek Law 4583/2018, as in force from time to time, for
and on behalf of one or several insurance undertakings (insurance agent), providing insurance advisory services to third
parties and to the subsidiaries of the Company, as well as researching, studying and analysing insurance related issues. The
Company also provides financial advisory services including planning, development, research, reorganization or resolution,
assessment, business strategy, acquisitions, sales, mergers and restructuring of companies, as well as advisory services on
private insurance issues.
The Company is incorporated and domiciled in Greece. The address of its registered office is 4 Amerikis str., 105 64, Athens.
The duration of the Company lapses on 6 July 2099. The Company and its subsidiaries (hereinafter the “Group”) provide
services in Southeastern and Western Europe. The key subsidiary of the Group is the credit institution under the name
“Piraeus Bank Société Anonyme” (hereinafter the “Bank”) which is headquartered in Athens and generates circa 90% of the
Group’s revenues offering a full range of financial products and services in Greece. As of 31 December 2023, the headcount
of the Group is 8,087 ful l time equivalents (“FTEs”), of which 34 FTEs refer to operations that are planned to be disposed.
Apart from the ATHEX General Index, the Company is a constituent of other major indices as well, such as FTSE/ATHEX (Large
Cap, Βanks, ESG Index), FTSE (Emerging Markets, Med 100), MSCI (Emerging Markets, Greece), Stoxx (All Europe TMI,
Emerging Markets 1500), S&P (Global, Greece BMI), Vanguard Total International Stock Index Fund, FTSE4Good, Bloomberg
Gender Equality, Solactive (ISS ESG EM Net Zero Pathway Index, ISS EM Carbon Reduction & Climate Improvers index), Carbon
Disclosure Project (“CDP”) and Science Based Targets initiative (“SBTi”).
The Board of Directors (“BoD”) of the Company which approved, on 27 February 2024, these separate and consolidated
financial statements of Piraeus Financial Holdings S.A. (the Company and the Group) for the year ended 31 December 2023
(the ‘’Annual Financial Statements”) and authorized for issue, consists of the following members:
Piraeus Financial Holdings Group – 31 December 2023
184
George P. Handjinicolaou
Chairman of the BoD, Non-Executive Member
Karel G. De Boeck
Vice-Chairman of the BoD, Independent Non-Executive Member
Christos I. Megalou
Managing Director & Chief Executive Officer (“CEO”), Executive BoD
Member
Vasileios D. Koutentakis
Executive BoD Member
Venetia G. Kontogouris
Independent Non-Executive BoD Member
Enrico Tommaso C. Cucchiani
Independent Non-Executive BoD Member
David R. Hexter
Independent Non-Executive BoD Member
Solomon A. Berahas
Independent Non-Executive BoD Member
Andrew D. Panzures
Independent Non-Executive BoD Member
Anne J. Weatherston
Independent Non-Executive BoD Member
Maria I. Semedalas
Independent Non-Executive BoD Member
Alexander Z. Blades
Non-Executive BoD Member
Periklis N. Dontas
Non-Executive BoD Member, Hellenic Financial Stability Fund (“HFSF”)
Representative under Law 3864/2010.
According to the Company's articles of association and the current regulatory framework, the members of the Company's
BoD are elected by the General Meeting (“GM”) of its shareholders and may be re-elected. The term of the members of the
BoD may not exceed three (3) years and may be extended until the first ordinary GM convened after such term has elapsed.
Pursuant to Greek Law 3864/2010, a representative of the HFSF participates in the BoD. If a member of the BoD is replaced,
then according to the Law, the respective replacement applies solely to the remaining term of the member being replaced.
Pursuant to the Annual General Shareholders’ Meeting Resolution on 27 June 2023, the term of the current BoD expires on
27 June 2026.
The Annual Financial Report, in compliance with the European Single Electronic Format (“ESEF”), is available on the web site
of Piraeus Financial Holdings S.A. at Financial Statements & Other Information | Piraeus Financial Holdings
(piraeusholdings.gr)
2 Basis of preparation and significant accounting policies
2.1 Basis of preparation
The Annual Financial Statements have been prepared in accordance with International Financial Reporting Standards
Piraeus Financial Holdings Group – 31 December 2023
185
(“IFRSs”), as endorsed by the European Union (the “EU”) at the time of preparing these financial statements. The amounts
are stated in Euro, rounded to the nearest million (unless otherwise stated) for ease of presentation. Any differences between
the amounts presented in the primary financial statements and the relevant amounts presented in the accompanying notes,
are due to rounding. Where necessary, the comparative figures have been reclassified (refer to Note 49) to conform to
changes in current period’s presentation.
The Annual Financial Statements have been prepared under the historical cost convention, except for financial assets and
financial liabilities measured at FVTPL or at FVTOCI, as presented in the statement of financial position and the relevant notes,
derivative financial instruments and investment property, which have been measured at fair value.
The preparation of financial statements in conformity with IFRSs, requires the use of critical accounting estimates and
judgements that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as at
the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The
areas where critical judgements and estimates are significant to the Annual Financial Statements, are disclosed in Note 3.
2.2 Going concern
Conclusion
Management has made an assessment on the Group’s ability to continue as a going concern. Management’s assessment
considered the Group’s principal business risks deriving mainly from the macroeconomic environment in combination with
the Group’s strategy, its liquidity and capital position. The following were taken into consideration:
a) the resilient economic growth in 2023, and the prospects for a positive rate of growth of Gross Domestic Product
(“GDP”) in the medium term, which is expected to remain above the euro area average, mainly driven by the
implementation of the National Recovery and Resilience Plan (“RRP”) and the inflow of private investments, the
decelerating level of inflation mainly as a result of the dropping energy prices, and the dynamic contribution of
tourism in the current account balance;
b) the recovery of sovereign credit rating to investment grade status after more than a decade by three (3) major
rating agencies, namely S&P, Fitch and DBRS, which reflects on the prudent fiscal policies and the implementation
of reforms including among others the restructuring of the banking sector;
c) the Group’s effective liquidity risk management, leading to a robust liquidity position as evident by the Liquidity
Coverage Ratio (“LCR”) as at 31 December 2023, as well as Management’s assessment of the impact of stress test
scenarios, within the Internal Capital Adequacy Assessment Process (“ICAAP”) and Internal Liquidity Adequacy
Assessment Process (“ILAAP”) framework, on the Group’s liquidity position and on mandatory liquidity ratios;
d) the capital adequacy of the Group, which exceeded the Overall Capital Requirements (“OCR”)- plus Pillar II
Guidance (“P2G”) - and the Minimum Requirements for own funds and Eligible Liabilities (“MREL”) ratio of Piraeus
Group, which exceeded the January 2024 Intermediate Guidance Target of 21.88%, as at 31 December 2023, as a
result of the successful issuances of two (2) senior preferred bonds in July and in November 2023 and the current
year profitability. It is estimated that for the next 12 months the Group’s capital adequacy ratios and the MREL
ratio will remain higher than the required minimum regulatory levels;
Piraeus Financial Holdings Group – 31 December 2023
186
e) the geopolitical developments, which pose significant downside risks, with the Middle East and particularly the
Russia / Ukraine conflicts, due to the Group’s operations in Ukraine, which comprise a financial institution, namely
JSC Piraeus Bank ICB, and investments in real estate assets which represent approximately 0.2% of the total
consolidated assets of the Company as at 31 December 2023;
f) the net profit attributable to the equity holders of the parent Company amounted to € 788 million and the Non-
Performing Exposures (“NPE”) ratio dropping to 3.5% as at 31 December 2023 from 6.8% as at 31 December 2022.
NPE (cash) coverage increased to 62% at year-end 2023 versus 55% a year ago.
Based on the analysis performed, Management has concluded that there are no material uncertainties which would cast
significant doubt over the ability of the Group to continue to operate as a going concern for a period of 12 months from the
date of approval of the Annual Financial Statements. For this reason, the Group and the Company continue to adopt the
going concern basis of accounting for preparing the financial statements.
Macroeconomic environment
In 2023, the Greek economy remained on a growth trajectory, despite the uncertainty that prevailed in the international
environment and the macroeconomic impact of monetary policy in the Eurozone. In the first nine months of 2023, real GDP
increased by 2.2% on an annual seasonally adjusted basis, a rate that although slower than the corresponding 2022 level,
remains higher than the Eurozone average (0.6%). Domestic demand and exports contributed positively to GDP growth. In
nominal terms GDP increased by 7.5% year-on-year (”YoY”) in the first nine months of 2023, following a 13.8% annual
increase in 2022. In the labor market, based on seasonally adjusted data, employment increased by 1.5% in 2023 on an annual
basis and the unemployment rate decreased to 10.6%, compared to 12.4% in 2022. The inflationary pressures, which were a
key feature of 2022 at international and domestic levels, showed a clear trend of de-escalation. In 2023 national inflation
was limited to 3.5% YoY, from 9.6% in 2022, mainly due to the lower energy prices. Average Harmonized Index of Consumer
Prices (“HICP”) for 2023, increased by 4.2% on an annual basis, from 9.3% in 2022.
With regard to the country's credit rating, its gradual upgrade resulted in the recovery of the investment grade for the first
time since 2010. More specifically, on 1 December 2023, the rating agency Fitch Ratings upgraded Greece's credit rating to
investment grade “BBB-“ from “BB+” with a stable outlook. On 20 October 2023, the rating agency S&P Global upgraded
Greece's credit rating to investment grade “BBB-“ from “BB+” with a stable outlook. Earlier on 8 September 2023, the rating
agency DBRS Morningstar upgraded Greece to investment grade, “BBB (low)” from “BB” with a stable outlook and on 4
August 2023, the rating agency Scope Ratings upgraded Greece's long-term credit ratings to investment grade “BBB-“ with a
stable outlook. Moody's upgraded Greece's credit rating by two (2) notches to “Ba1” from “Ba3” with a stable outlook, on 15
September 2023, one notch below investment grade. According to the latest evaluations, Greece has secured the investment
grade from four (4) rating agencies out of five (5), recognized by the ECB (Moody's, S&P, Fitch Ratings, DBRS Morningstar and
Scope Ratings).
According to European Commission’s (“EC”) forecasts, economic activity in Greece is expected to grow by 2.4% in 2023, and
2.3% in 2024, before gradually moderating to 2.2% in 2025. The expansion of the Greek economy will continue to be
supported by the execution of the Greece 2.0 RRP and a resilient labor market. The unemployment rate is anticipated to
gradually decline, and inflationary pressures to be limited. Employment growth is set to continue, albeit at a slower pace.
The unemployment rate is forecasted to fall to 9.9% by 2025, its lowest level in over a decade. Consumer prices based on
HICP, are expected to increase by 2.8% and 2.1% in 2024 and 2025 respectively. The general government deficit is set to
decrease further on the back of muted expenditure growth and higher revenues. The primary balance is expected to record
Piraeus Financial Holdings Group – 31 December 2023
187
a surplus of 1.1% of GDP in 2023, up from 0.1% in 2022, reaching 2.5% of GDP in 2024. Along with solid nominal GDP growth,
this is set to support the decline of the high public debt-to-GDP ratio.
The development prospects of the Greek economy depend to a significant extent on the utilization of European funds for the
implementation of investment plans and the stimulation of entrepreneurship. The Recovery and Resilience Fund (“RRF”),
both in terms of grants and private sector investments through the loan facility, is a key factor from a sustainable
development perspective. On 8 December 2023, the Economic and Financial Affairs Council (“ECOFIN”) approved the
amended RRP of Greece, which includes capital for REPowerEU amounting to € 795 million, as well as an additional € 5 billion
that will be added to the existing loan program. The revised plan amounts to € 36 billion (from € 30.5 billion of European
funding in the original plan), with € 18 billion RRF grants and € 18 billion RR F loans. The EC, under RRF has already disbursed
to Greece € 17.4 billion until January 2024. Overall, it is estimated that by 2027 the country's funding from EU programs (RR F,
National Strategic Reference Framework, “NSRF”, Common Agricultural Policy, “CAP”) will exceed € 76 billion.
In the medium term, the Greek economy is expected to enhance its resilience, despite the challenging and unstable global
environment, building on credible fiscal policy, reform orientation, productive investments and extroversion. Increasing
investments, implementing the RRP and maintaining the momentum of reforms, can ensure continued sustainable growth
in the long term.
However, there are risk factors that could negatively affect developments in the Greek economy and its prospects. Any
worsening of the geopolitical crisis in Ukraine and the Middle East increases the risk of disruptions in energy supply with a
possible impact on both energy prices and overall price levels as a whole. Slow growth in Europe also poses risks to the
country’s export performance and the continued recovery of tourism services. Additional risks for the prospects of the Greek
economy are the maintenance of the tighter monetary policy that can burden economic activity and weaken the stimulation
of investments as well as delays in the implementation of public and private projects and in meeting the RRF schedule. Finally,
environmental challenges and extreme weather events are a growing risk to the economy. These risks could affect the Greek
banking system and the Bank in particular. Higher energy prices may cause inflation, which reduces consumer spending and
corporate earnings, making it harder for some people and businesses to repay their loans, resulting in lower asset quality an d
more NPE inflows. Weaker economic activity and possible hold-ups in the RRF funds distribution, could affect credit growth
and Piraeus Group’s revenue sources, reducing profitability and capital creation. Lastly, extreme weather events such as the
fires and floods that occurred in 2023 in Greece, could damage the repayment capacity of the affected borrowers from those
extreme weather events and the value of collaterals in those areas.
Addressing Climate Change
The Group recognizes that climate change has an impact on the economy, the society, and the environment. Therefore, the
Group has developed a climate strategy based on four pillars:
a. Reach net zero in own operations: the Bank’s climate action starts by managing its own environmental
footprint through its operations. The Bank monitors and manages its environmental impact closely, investing
in operational efficiency solutions and sourcing 100% renewable energy for the buildings it has management
control over.
b. Steer portfolio towards net zero by 2050 or sooner: As a Bank, Piraeus makes the most positive impact on
climate action through its financing to companies and individuals. The Bank focuses on climate sensitive
sectors, and measures whether the Bank’s lending in each sector is aligning with the Group’s climate ambition
and targets.
Piraeus Financial Holdings Group – 31 December 2023
188
c. Support and advise clients in line with a carbon neutral economy: to support Bank’s clients in their climate
transition the Bank focuses on accelerating the green economy, financing the energy transition, and
pioneering financing for new technologies and business models. Traditionally such financing has focused more
on corporate clients, but the Bank is increasingly offering such solutions to Small – Medium Entities (“SMEs”),
and retail customers in Greece.
d. Manage Climate and Environmental (“C&E”) risks: the Bank is progressively integrating the risks associated
with climate change in the Group’s Risk Management Framework (“RMF”). The Bank approach continues to
develop as methodologies advance and regulatory guidance evolves.
The Group actively participates in the ECB supervisory dialogue and with a dedicated program aims to fully incorporate C&E
risks in its strategies, policies, processes, and RMF by end of 2024.
Refer to Note 4.19 for further details on the Group’s Financial Risk Management.
Liquidity
As at 31 December 2023, Group’s deposits stood at € 59.6 billion, corresponding to a rise of 2.0% compared to 31 December
2022.
In response to inflationary pressures, the ECB’s Governing Council continued to raise the key ECB interest rates in 2023
reaching 4.50% for the main refinancing rate and 4.00% for the Deposit Facility Rate (“DFR”), a development which increased
the cost of funding. In addition, during the third quarter of 2023, the Fed and ECB cycle of rate hikes ended, and the first cuts
are expected this year.
As at 31 December 2023, the Group’s funding under Targeted Longer Term Refinancing Operations (“TLTRO”) auctions
amounted to € 3.5 billion, reduced by € 2.0 billi on compared to 31 December 2022. In addition, funding from the interbank
market increased at € 0.4 billion as at 31 December 2023, compared to € 0.3 billion as at 31 December 2022.
As regards the maturity profile of the aforementioned TLTRO funding, € 2.5 billion mature in June 2024 and the remaining €
1.0 billion matures in December 2024. The Group has the liquidity to repay the upcoming TLTRO maturities due to the ample
position of € 10.6 billion in cash and balances with central banks.
The Group’s balance sheet deleveraging, coupled with the moderately growing customer deposit base, alongside the active
markets access through Tier 2 issuances, Additional Tier 1 (“ΑΤ1”) Capital instrument, and Senior Preferred Bond issuances
improved the Group’s funding mix, and increased its high-quality liquid assets (“HQLA”) buffer. As at 31 December 2023, the
Group’s LCR stood at 241% (thus, more than double than the regulatory requirement of 100%).
Based on the Group’s most recent ILAAP assessment, both the LCR and Net Stable Funding Ratio (“NSFR”) ratios are expected
to remain above minimum regulatory thresholds throughout the next 12 months.
Capital adequacy
As at 31 December 2023, the Group’s total equity amounted to € 7.3 billion, compared to € 6.6 billion as at 31 December
2022, as a result of the recovered profitability of the Group. Hence, the Group’s Basel III Common Equity Tier 1 (“CET1”) as
Piraeus Financial Holdings Group – 31 December 2023
189
at 31 December 2023 stood at 13.2% (31 December 2022: 13.04%) and the total capital ratio (“TCR”) stood at 17.7% (31
December 2022: 17.8%).
The amount of deferred tax assets (“DTA”) included in the Group’s regulatory capital in accordance with the provisions of
Greek Laws 4172/2013, 4302/2014, 4340/2015, stood at € 3.3 billion as at 31 December 2023, compared to € 3.5 billion as
of 31 December 2022.
The ECB, through the Supervisory Review and Evaluation Process (“SREP”) decision on 30 November 2023, informed the
Management on the revised OCR levels, effective since 1 January 2024. The Group has to maintain, on a consolidated basis,
a Total SREP Capital Requirement (“TSCR”) of 11% and an OCR of 14.5 7% (OCR plus P2G at 16.32%), which includes: (a) the
minimum Pillar I total capital requirements of 8.00% as per article 92(1) of Regulation 575/2013/EU; (b) the additional Pilla r
II capital requirement of 3.00% as per article 16(2) of Regulation 1024/2013/EU; (c) the fully loaded capital conservation
buffer of 2.50% under Greek Law 4261/2014, (d) the transitional Other Systemically Important Institutions (“O-SII”) capital
buffer of 1.00% under Greek Law 4261/2014 and (e) the institution-specific Countercyclical Capital Buffer (“CCyB”) under
Greek Law 4261/2014 (as amended by Greek Law 4799/2021) of 0.07% for the year ended 31 December 2023.
Refer to Note 4.16 for further details on the Group’s capital adequacy.
2.3 Adoption of International Financial Reporting Standards
The following amendments to existing IFRSs, effective from 1 January 2023, have been issued by the International Accounting
Standards Board (“IASB”) and endorsed by the EU as of the date the Annual Financial Statements were issued.
Amendments to Accounting Standards
IAS 1 (Amendment) “Presentation of Financial Statements” and IFRS Practice Statement 2: Disclosure of Accounting
Policies. The Group has adopted the amendments to International Accounting Standard (“IAS”) 1 for the first time in the
current year. The amendments change the requirements in IAS 1 with regard to disclosure of accounting policies. The
amendments replace all instances of the term "significant accounting policies” with "material accounting policy information”
and add guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.
The amendments have had an impact on the Group’s disclosures of accounting policies, but not on the measurement,
recognition or presentation of any items in the Group’s and the Company’s financial statements.
IAS 8 (Amendment) “Accounting Policies, Changes in Accounting Estimates and Errors: Definition of Accounting Estimates”.
The amendment introduces the definition of accounting estimates and includes other amendments to IAS 8 to help entities
distinguish changes in accounting estimates from changes in accounting policies.
The amendment had no impact on the Group’s and the Company’s financial statements.
IAS 12 (Amendment) “Deferred Tax Related to Assets and Liabilities Arising from a Single Transaction”. The amendment is
applied to transactions that occur on or after the beginning of the earliest comparative period presented. It also, at the
beginning of the earliest comparative period presented, recognizes deferred tax for all temporary differences related to
leases and decommissioning obligations and recognizes the cumulative effect of initially applying the amendment as an
adjustment to the opening balance of retained earnings (or other component of equity, as appropriate) at that date.
The amendment had no impact on the Group’s and the Company’s financial statements.
Piraeus Financial Holdings Group – 31 December 2023
190
IAS 12 (Amendment) “International Tax Reform – Pillar Two Model Rules” The objective of the amendments is to introduce
a mandatory temporary exception to the requirements in IAS 12 to recognise and disclose information about deferred tax
assets and liabilities, arising from the Organisation for Economic Cooperation and Develo pment’s (“OECD”) Pillar Two Model
Rules. The amendments also introduce targeted disclosure requirements. The temporary exception is applicable immediately
and retrospectively in accordance with IAS 8, whereas the targeted disclosure requirements are applicable for annual
reporting periods beginning on or after 1 January 2023. Refer to Note 16 for further information.
The adoption of the amendment did not have any impact on the Group and the Company’s annual financial statements, as
Greece is expected to incorporate the related legislation in 2024. According to the initial assessment made by Management,
no significant impact is expected by the Group.
Amendments to standards that have been issued by the IASB and have been endorsed by the EU, but they are not effective
in 2023 nor have they been early adopted by the Group and the Company:
IAS 1 (Amendment) “Classification of Liabilities as Current or Non-current”. The amendment aims to promote consistency
in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other
liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within on e
year) or non-current. Moreover, the amendment addresses issues regarding the presentation and disclosures of liabilities for
which an entity's right to defer settlement for at least 12 months is subject to the entity complying with specified conditions
(covenants) after the reporting period.
The Group and the Company have not early adopted the above amendments, however it is not expected any material impact
on the Group and the Company’s financial statements.
Amendments to standards that have been issued by the IASB but they have not yet been endorsed by the EU, and therefore
they have not been adopted by the Group and the Company:
IAS 21 (Amendment) “Lack of exchangeability”. The amendments specify when a currency is exchangeable into another
currency and, consequently, when it is not and how an entity determines the exchange rate to apply when a currency is not
exchangeable. Additionally, the amendment requires disclosure of information that enables users of financial statements to
understand the impact of a currency not being exchangeable.
IAS 7, IFRS 7 (Amendment) “Supplier Finance Arrangements”. The amendment aims to add disclosure information about
supplier finance arrangements, such as terms and conditions, carrying amount of financial liabilities that are part of such
arrangements, ranges of payment due dates and liquidity risk information.
2.4 Material accounting policies
2.4.1 Consolidation
The consolidated financial statements incorporate the financial statements of the Company and its subsidiaries (including
structured entities), which are entities controlled by the Company. Control is achieved, if and only if, the Company has: a)
power over the subsidiaries, b) exposure, or rights to variable returns from its involvement with the subsidiaries and c) the
ability to use its power over the subsidiaries to affect its returns.
Piraeus Financial Holdings Group – 31 December 2023
191
Income and expenses and other comprehensive income of subsidiaries acquired or disposed of during the year are included
in the consolidated income statement and in the consolidated statement of comprehensive income, respectively, from the
effective date of acquisition and up to the effective date of disposal, as appropriate. Profit/ (loss) for the period and total
comprehensive income/ (expense) of subsidiaries are attributed to the owners of the Company and to the non-controlling
interests, even if these result in the non-controlling interests are of a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line
with those adopted by the Group. All intra-group transactions, balances, income and expenses are eliminated in full on
consolidation.
2.4.2 Intragroup distributions in kind by the distributing entity
Distribution of non-cash financial assets to entities within the Group, which are scoped out from International Financial
Reporting Interpretations Committee (“IFRIC”) 17, is recognised directly in equity, at the book value of the assets being
distributed. Specifically, in cases where the distribution refers to a previously unrecognised asset (e.g. because the
derecognition requirements of IFRS 9 were not met prior to the distribution), the amount to be accounted for directly in
equity is determined based on the carrying amount of the on balance sheet assets derecognised and the value of the rights
and obligations created as a result of the distribution, in accordance with the recognition and measurement requirements of
the applicable standards.
2.4.3 Non-controlling interests
Non-controlling interests are measured on the date of acquisition either at their proportionate interest of the recognised
amounts of the acquirer’s net as sets or at fair value. The choice of measurement is made on a transaction-by-transaction
basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial
recognition plus the non-controlling interests’ share of subsequent changes in equity. Total comprehensive income/
(expense) is attributed to non- controlling interests even if this results in the non-controlling interests having a deficit balance.
2.4.4 Loss of control over a subsidiary or a business
When the Group loses its control over a subsidiary or a business, the profit or loss on disposal is calculated as the difference
between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)
the previous carrying amount of the assets (including goodwill) and liabilities of the subsidiary or business disposed of, an d
non-controlling interests, if any. For assets of the subsidiary or business carried at fair value with the related cumulative gain
or loss recognised in other comprehensive income, the amounts previously recognised in other comprehensive income are
accounted for as if the Company had directly disposed of the relevant assets (i.e. reclassified to the income statement or
transferred directly to retained earnings as specified by applicable IFRSs). The fair value of any investment retained in the
former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting
under IFRS 9 “Financial Instruments” or, when applicable, the cost on initial recognition of an investment in an associate or
a jointly controlled entity.
The Group applies IFRS 10 on contributions of subsidiaries that meet the business definition, into associates. On this basis
such contributions are measured at fair value and any resulting gain or loss arising from loss of control over the former
subsidiary is recognised in the income statement.
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2.4.5 Associates
Associates are all entities over which the Group has significant influence, but not a controlling interest. Significant influence
is generally presumed when the Group holds, directly or indirectly, more than 20% of the voting rights, unless it can be clearly
demonstrated that this is not the case. The existence and effect of potential voting rights that are currently exercisable or
convertible are considered in assessing whether the Group has significant influence.
Investments in associates are accounted for by applying the equity method of accounting. Under the equity method of
accounting, the investment is initially recognised at cost. Goodwill arising on the acquisition of an associate is included in the
carrying amount of the investment (net of any accumulated impairment loss). The carrying amount of the investment is
increased or decreased by the proportionate share of the associate’s post-acquisition profits or losses (recognised in the
Group’s consolidated income statement) and movements in reserves (recognised in reserves), based on their most recent
available financial information at each reporting period. Dividends received from the associate during the year reduce the
carrying value of the investment. Unrealised gains and losses on transactions between the Group and its associates are
eliminated to the extent of the Group’s interest in the associate. Where necessary, the associate’s financial statements used
in applying the equity method are adjusted to ensure consistency with the accounting policies adopted by the Group.
2.4.6 Joint ventures
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to the net
assets of the arrangement. The Group recognises its interest in a joint venture as an investment and accounts for tha t
investment using the equity method (refer to Note 2.4.5).
2.4.7 Investments in subsidiaries, associates and joint ventures in the separate financial statements
In the separate financial statements, investments in subsidiaries, associates and joint ventures are initially and subsequently
measured at cost less impairment.
2.4.8 Impairment of investments in subsidiaries, associates and joint ventures
The Group and the Company assess at each reporting date whether there is any indication that an investment in a subsidiary,
associate or joint venture may be impaired. If any such indication exists, the recoverable amount of the investment is
estimated. When the carrying amount of an investment is higher than its estimated recoverable amount, it is written down
to its recoverable amount.
The Group and the Company, in the context of the impairment assessment of the carrying amount of its investments in
subsidiaries, associates or joint ventures, have defined both quantitative and qualitative triggers. The qualitative triggers are
related to companies’ financial changes, forward-looking developments in the countries and/ or economy sectors in which
they operate, changes in management etc.
An impairment loss recognised in prior years can be reversed only if there has been a change in the assumptions used to
determine the recoverable amount of the investment since the last time an impairment loss was recognised. In this case, the
carrying amount of the investment is increased to its recoverable amount and this increase is the reversal of the impairment
loss.
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2.4.9 Foreign Currency translations
Functional and presentation currency
Items included in the financial statements of each of the Group's entities are measured using the currency that best reflects
the economic substance of the underlying events and circumstances relevant to that entity ("the functional currency"). The
Financi al Statements are presented in millions of Euro (€), which is the functional currency of the Company.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.
Translation differences on non-monetary financial assets that are measured at fair value, are a component of the change in
their fair value and are recognised in the income statement for equity securities held for trading, or in other comprehensive
income for equity securities measured at FVTOCI. Non-monetary items that are measured in terms of historical cost in a
foreign currency are translated using the exchange rate at the date of the transaction.
Group companies
When preparing the consolidated financial statements, assets and liabilities of foreign operations are translated at the
exchange rates prevailing at the reporting date, while income and expense items are translated at average rates for the
reporting period. Differences resulting from the use of closing and average exchange rates and from revaluing a foreign
operation’s opening net asset balance at closing rate, are recognised directly in foreign cur rency translation reserve within
other comprehensive income. When a monetary item forms part of a reporting entity’s net investment in a foreign operation
and is denominated
in a currency other than the functional currency of either the reporting entity or the foreign operation, the exchange
differences that arise in the separate financial statements of both companies are reclassified to other comprehensive income
upon consolidation.
2.4.10 Interest income and expense
Interest income and expense for all interest-bearing financial instruments are recognised in “interest and similar income”
and “interest expense and similar charges” in the income statement using the effective interest rate (“EIR”) method. The EIR
is the rate that discounts any estimated future payment or proceeds throughout the life of a financial instrument or until the
next date of interest reset, in order for the present value of all future cash flows to be equal to the carrying amount of th e
financial instrument, including any fees or transaction costs incurred. Fees and direct costs relating to financial instruments
measured at amortised cost are deferred and amortised to interest income or expense over the life of the instrument using
the EIR method. Interest income and expense also includes interest on derivatives in economic hedge relationship, using the
contractual interest rate.
Ιn particular, the following apply for financial assets that are carried at amortised cost or FVTOCI:
 For those financial assets classified within Stage 1 or Stage 2, interest income is calculated by applying the EIR to the
gross carrying amount of the financial asset.
 For those financial assets classified within Stage 3, interest income is calculated by applying the EIR to the amortised
cost of the financial asset.
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 For purchased or originated credit impaired (“POCI”) financial assets, interest income is calculated similar to the Stage
3 financial assets and by applying the credit adjusted EIR of the financial asset. The credit adjusted EIR is the rate that,
at initial recognition, discounts the estimated future cash flows (including credit losses) to the amortised cost of the
POCI financial asset.
2.4.11 Fee and commission income and expense
The Group applies the following five (5) step model to all contracts with customers, except for lease arrangements and
financial instruments:
 Identification of the contract(s) with the customer;
 Identification of the performance obligations in the contract;
 Determination of the transaction price;
 Allocation of the transaction price to the performance obligations; and
 Recognition of revenue when the performance obligation is satisfied.
As such, the Group recognises revenue when a performance obligation is satisfied, that is when control of the services or
goods is transferred to the customer.
Fee and commission income/ expense is recognised over time when the relevant services are provided. For instance, fee
income on asset management services and on real estate management services is recognised as the service is being rendered
to the customer.
Loan syndication fees are recognised as income when the syndication has been completed and the Group retains no part on
the loan package for itself or retains part at the same EIR with the other participants. Fees and commissions arising from
negotiating or participating in the negotiation of a transaction for a third party, such as the arrangement of the acquisitio n
of shares or other securities or the purchase/ sale of businesses, are recognised at a point in time when the transaction is
completed. Fees on the execution of transactions (e.g. sales and brokerage commissions) are recognised upon completion of
the transaction.
2.4.12 Share-based payments
The Group engages in equity settled share-based payment transactions with its employees on a discretionary basis, in
accordance with the legal and regulatory framework.
The Group receives services from its employees in exchange for its own equity instruments (either shares or share options).
The fair value of the Company’s shares or share options granted is determined at the grant date and is recognized as a staff
cost expense, with an equal increase in equity (i.e. no impact on the Group’s net assets). For share-based payments
contingent to service vesting conditions, the total expense is proportionally recognized over the vesting period. For non-
market vesting conditions, the Group revises, when necessary, its estimate over the number of equity instruments that are
expected to vest and the impact from the revision is recognized in profit or loss such that the cumulative expense reflects
the revised estimate.
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2.4.13 Dividend income
Dividend income is recognised when the right to receive payment is established.
2.4.14 Financial assets measured at FVTPL or mandatorily measured at FVTPL and loans and advances to customers
mandatorily measured at FVTPL
Financial assets at FVTPL
Financial assets measured at FVTPL are all financial assets that do not meet the criteria of being measured at either amortised
cost or FVTOCI. The changes in fair value of such financial assets are recognised in the income statement, in line “net gains/
(losses) from financial instruments measured at FVTPL”.
Financial assets mandatorily at FVTPL
Equity instruments are measured mandatorily at FVTPL unless the Group and the Company irrevocably elect to measure at
FVTOCI.
Debt securities measured mandatorily at FVTPL are exposures for which the contractual terms do not give rise on specified
dates to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding (SPPI Fai l).
Loans and advances to customers mandatorily at FVTPL
Loans and advances to customers mandatorily at FVTPL are credit exposures for which the contractual terms do not give rise
on specified dates to cash flows that are SPPI on the principal amount outstanding (SPPI Fail).
2.4.15 Sale and repurchase agreements and securities lending
Securities sold subject to repurchase agreements (repos) are reclassified in the statement of financial position as a pledged
asset when the transferee has the right by contract to sell or repledge the collateral; the liability part of the agreement is
included in amounts “due to banks” or “due to customers”, as appropriate.
Securities purchased under agreements to resell (reverse repos) are recorded as “reverse repos with customers”. “Reverse
repos with customers” are carried at amortised cost using the EIR method.
The difference between sale and purchase price of the aforementioned securities is treated as interest and accrued over the
life of the agreements using the EIR method.
Securities transferred to counterparties by the Group are presented in the statement of financial position as assets, in the
case that the Group retains substantially all the risks and rewards of ownership of these securities.
Securities transferred to the Group by counterparties are not recognised in the statement of financial position, except in th e
case of counterparty’s bankruptcy. If the securities are sold to a third party, the Group recognises the consideration receiv ed
as well as the corresponding obligation to return the securities, at fair value in the statement of financial position.
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2.4.16 Investment Securities measured at FVTOCI
Debt securities
A financial asset is measured at FVTOCI if both of the following conditions are met:
 The financial asset is held within a business model in which assets are managed to achieve a particular objective by both
collecting contractual cash flows and selling financial assets (“Hold to Collect and Sell”); and
 The contractual terms of the asset give rise on specified dates to cash flows that are SPPI on the principal amount
outstanding.
A Hold to Collect and Sell business model applies when the Group has made a decision that both collecting contractual cash
flows and selling financial assets are integral to achieving the objective of the business model. In order to determine whether
this is so, Management considers:
 If the business model will typically involve greater frequency and value of sales than a Hold to Colle ct (“HTC”) model;
 If there are various objectives that may be consistent with this type of business model, such as to:
- manage everyday liquidity needs;
- maintain a particular interest yield profile; or
- match the duration of the financial assets to the duration of the financial liabilities that those assets are funding.
The financial assets, after initial recognition, are measured at FVTOCI with any unrealised gains/ losses recorded directly i n
statement of comprehensive income, until these financial assets are derecognised. On the date of derecognition (upon the
sale or collection of the asset), the cumulative fair value gains/ losses are reclassified from equity to profit or loss. The Group
recognises in the income statement, interest income using the E IR method, Expected Credit Losses (“ECL”), foreign exchange
gains and losses and any modification gains or losses.
Effectively from September 2022, debt securities issued by corporations and financial institutions are acquired by the Group
solely for HTC purposes and therefore, measured at amortised cost unless they fail the SPPI test.
Equity instruments
At initial recognition, the Group and the Company may make an irrevocable election to present in other comprehensive
income subsequent changes in the fair value of an investment in an equity instrument within the scope of IFRS 9 that is not
held for trading. This election is made on a “one to one” basis.
Furthermore, equity instruments that are measured at FVTOCI are not subject to any impairment and any accumulated gains
and losses recognised in other comprehensive income, which are not subsequently reclassified to the income statement, but
may be reclassified within equity (to the retained earnings).
Only dividend income on such equity instruments is recognised in the income statement, unless the dividend clearly
represents a recovery of part of the cost of the investment. Dividends are recognised in profit or loss only when:
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a) the Group’s and the Company’s right to receive payment of the dividend is established;
b) it is probable that the economic benefits associated with the dividend will flow to the Group and the Company; and
c) the amount of the dividend can be measured reliably.
All other gains and losses (including those relating to foreign exchange) are recognised in other comprehensive income.
2.4.17 Derivative financial instruments
Derivative financial instruments mainly include currency and Interest Rate Swaps (“IRSs”), forward rate agreements, futures
and options (both written and purchased). Derivatives are initially recognised in the statement of financial position at fair
value on the date when the Group engages into the contract (i.e. trade date) and subsequently remeasured at FVTPL.
Derivatives are classified as assets when their fair value is positive or as liabilities when their fair value is negative. Where the
Group enters into derivative instruments used for trading purposes, realised and unrealised gains and losses are recognised
in the income statement. Changes in the fair values of derivative financial instruments are included in line item “net gains/
(losses) from financial instruments measured at FVTPL”. A derivative may be embedded in another financial instrument,
known as “host contract”. If the host is any contract other than a financial asset, the embedded derivative is bifurcated from
its host and treated as a separate derivative, provided that its risks and economic characteristics are not closely related t o
those of the host contract, the embedded derivative actually meets the accounting definition of a derivative and the host
contract is not carried at fair value with unrealised gains and losses reported in the income statement. If the host contract is
a financial asset, the entire hybrid instrument is measured either at amortised cost or fair value.
2.4.18 Hedge accounting
The Group has elected to continue applying hedge accounting under IAS 39, as permitted by IFRS 9. A hedge accounting
relationship is established by the Group, only if all of the following criteria are met:
 at inception of the hedge, there is formal designation and documentation of the hedging instrument, hedged item,
hedging objective, strategy and relationship;
 the hedge is expected to be highly effective in offsetting the risk in the hedged item throughout the hedging period. A
hedge is considered to be highly effective when the Group achieves offsetting changes in fair value between 80 percent
and 125 percent for the risk being hedged; and
 the hedge is highly effective on an ongoing basis.
Fair value hedge
The Group applies fair value hedge (“FVH”) accounting to mitigate the risk of interest rate changes. The Group designates
FVH accounting relationships either on micro basis or portfolio basis by applying the carve-out version of IAS 39, as adopted
by EU. In micro hedges the Group designates individual fixed rate assets or liabilities as hedged items, while in portfolio
hedges the Group designates a portion of homogenous fixed rate assets or liabilities. Changes in the fair value of derivatives
that are designated and qualify as hedging instruments in FVH are recorded in the income statement under ”Net
gains/(losses) from financial instruments measured at FVTPL”, together with any changes in the fair value of the hedged asset
or liability that are attributable to the hedged risk. In micro hedges, the carrying amount of the hedged item is adjusted with
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the corresponding fair value changes attributable to the hedged risk, while in portfolio hedges, the said adjustment is
presented separately in the statement of financial position.
If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item, is
amortised to profit or loss over the period to maturity. The unamortised adjustment to the carrying amount of a non-interest
bearing hedged item is recognised immediately in the income statement.
2.4.19 Loans and advances to customers at amortised cost
Loans and advances to customers include financial assets measured at amortised cost for which both of the following
conditions are met:
i. the financial asset is held within a business model whose objective is to hold financial assets in order to collect
contractual cash flows; and
ii. the contractual terms of the financial asset give rise on specified dates to cash flows that are SPPI on the principal
amount outstanding (SPPI pass).
Loans and advances to customers at amortised cost drawn down by the Group and the Company are initially recognised at
fair value (plus any transaction costs) and measured subsequently at amortised cost using the EIR method. Interest on loans
and advances to customers is included in the income statement and is reported within line item “interest and similar income”.
Debt instruments that are contractually linked instruments in the form of collateralized loan obligations (“CLOs”) are carrie d
at amortised cost provided that: a) the instrument itself meets both conditions for amortised cost measurement, b) the
underlying assets qualify for amortised cost accounting, and c) the exposure to credit risk inherent in the CLOs is equal or less
than then exposure to credit risk of the underlying pool of financial instruments. Contractually linked instruments are
presented within loans and advances to customers at amortised cost, if no active market exists for that asset at the time of
purchase.
Senior notes held by the Group, which are issued under securitization of loans, are presented within loans and advances to
customers, provided that both conditions for amortised cost measurement are met.
Τhe Group and the Company recognise an ECL impairment on loans and advances to customers at amortised cost when it is
estimated that they will not be in a position to receive all payments due, as defined by the contract of the loan. The amount
of the ECL impairment on loans and advances to customers at amortised cost is the difference between all contractual cash
flows that are due in accordance with the contract and all the cash flows that the entity expects to receive, discounted at the
original EIR of the loan (or credit-adjusted EIR for POCI financial assets).
At each reporting date, an impairment loss equal to 12-month ECL (allocated to Stage 1) is recognised for all financial assets
for which there is no significant increase in credit risk (“SICR”) since initial recognition. For financial assets:
a. that there is a SICR since their initial recognition (allocated to Stage 2);
b. that are credit impaired (allocated to Stage 3); and
c. that are POCI,
an impairment loss equal to lifetime ECL is recognised.
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Protection fees payable by the Group to protection sellers in the context of synthetic securitizations are presented within
line item “other credit-risk related expenses on loans and advances to customers at amortised cost”.
Default Definition
The Group an d the Company apply the European Banking Authority (“EBA”) NPE definition. In accordance with the Group’s
and the Company’s Impairment Policy, a financial asset is considered as credit impaired and is classified into Stage 3, when
it is classified as NPE.
The Definition of Default (“DoD”) is assessed:
 On a contract level for retail portfolio.
 On an obligor level for non-retail portfolios.
The determination of a SICR takes into account many different factors and varies per portfolio type. The main criteria
considered in making this determination are the following:
 Primary criteria
- significant increase in the probability of default (“PD”) of the financial instrument at the reporting date, compared
to the one calculated at the initial recognition date, based on certain absolute [300-650 basis points (“bps”),
depending on the portfolio segment] or relative (200%) thresholds. The aforementioned thresholds are the same as
last year.
 Secondary criteria
- existence of forbearance;
- behavioral flags (i.e. monitoring the maximum delinquency bucket for the last 12 months);
- existence of default event over the last 12 months;
- watch list.
 Backstop
- the Group and the Company apply the IFRS 9 presumption that a SICR has occurred when the financial asset is more
than 30 days-past-due and all such exposures are classified in Stage 2.
 Additional criteria due to high energy prices and inflation
As of 31 December 2023, additional criteria on SICR have been considered in order to capture retail exposures’ vulnerability
to high energy prices and inflation (refer to Note 3.2).
Key Impairment Modeling Concepts
ECL is a function of the PD, Exposure at Default (“EAD”) and Loss Given Default (“LGD”) and is estimated by incorporating
forward-looking economic information and through the use of experienced credit judgement to reflect factors not captured
in models.
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The Group considers as individually significant, facilities to Corporate and Individual customers that satisfy all of the following
criteria:
 The aggregate exposure at debtor level at the period end reporting date exceeds the amount of € 1 million or the
equivalent in foreign currency.
 The exposures are classified as NPE.
The result of the individual assessment is further adjusted by incorporating the effect of macroeconomic scenarios,
determined on the basis of the estimates of the collective projection models.
The collective impairment assessment is carried out on all loans classified in Stages 1 and 2, as well as Stage 3, provided that
they have not been individually assessed. Loans and advances to customers at amortised cost are grouped on the basis of
similar credit risk characteristics (i.e. arrears bucket, industry sector, business/ product segment, and other relevant factors).
These characteristics are indicative of the debtors’ ability to pay all amounts due according to the contractual terms of the
assets being evaluated.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised (such as an improvement of the debtor's credit rating), the previously
recognised impairment loss is reduced and the gain is recognised in the income statement.
Forborne loans are defined as exposures arising from loan agreements that have been subject to forbearance measures. The
measures are considered as a concession of the Group and the Company to a borrower who is facing or is about to face
financial difficulties in fulfilling its financial obligations. Forbearance may involve modification of contractual terms and
conditions and/ or refinancing of debts.
Forborne loans are tested for impairment in accordance with the IFRS 9 Impairment Policy for loans and advances to
customers at amortised cost, as described above.
2.4.20 Modification of financial assets
When the contractual cash flows of a financial asset are renegotiated or otherwise modified and the renegotiation or
modification does not result in the derecognition of that financial asset in accordance with IFRS 9, the Group and the
Company recalculate the gross carrying amount of the financial asset and recognise a “modification gain or loss” in the
income statement. The gross carrying amount of the financial asset shall be recalculated as the present value of the
renegotiated or modified contractual cash flows that are discounted at the financial asset’s original EIR (or credit-adjusted
EIR for POCI financial assets). Any costs or fees incurred adjust the carrying amount of the modified financial asset and are
amortised over the remaining term of the modified financial asset.
2.4.21 Derecognition of financial assets
A financial asset is derecognised when:
 the contractual rights to the cash flows from the asset expire; or
 the Group and the Company transfer the financial asset and the transfer qualifies for derecognition.
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The term “financial asset” is used to refer to either the whole, or a part, of a financial asset (or the whole or a part of a group
of similar financial assets).
The contractual rights to the cash flows from that financial asset have expired when for example:
 a loan receivable is repaid;
 a purchased option expires unexercise d.
The Group and the Company transfer a financial asset if, and only if, either:
 transfer the contractual rights to receive the cash flows of the financial asset; or
 retain the contractual rights to receive the cash flows of the financial asset, but assume a contractual obligation to pay
the cash flows on to one or more recipients.
If substantially all the risks and rewards of ownership of the financial asset are transferred, the financial asset must be
derecognised and any rights and obligations created or retained in the transfer must be recognised separately as assets or
liabilities.
It is a business practice, to proceed with restructuring of debt instruments particularly but not always when debtors are in
financial difficulties. When the restructuring results in a substantial modification to the terms of a loan due to financial
distress of the debtor or the restructuring takes place solely on the basis of a commercial renegotiation, the loan is
derecognised. For financial distress restructurings, the Group has defined derecognition criteria such as: change of debtor,
change of currency denomination, introduction of a conversion to equity option to the modified contract and consolidation
of contracts.
On derecognition of a financial asset in its entirety, the difference between:
 the carrying amount of the asset as at the date of the derecognition; and
 the consideration received (i.e. any new asset originated/received less any new liability assumed),
is recognised in the income statement as a “derecognition gain or loss”.
2.4.22 Derecognition of financial liabilities
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or expired.
If an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of
the existing liability are substantially modified, such an exchange or substantial modification is treated as a derecognition of
the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised
in the income statement.
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2.4.23 Intangible assets
Software
Costs associated with the acquisition of software programs, which will probably generate economic benefits to the Group for
more than one year, are recognised as intangible assets. Expenditure that enhances or extends the performance of computer
software programmes beyond their original specifications or software upgrade expenses are added to the original cost of the
software, as long as they can be measured reliably.
Subsequent to initial recognition, software is measured at cost less accumulated amortisation and accumulated impairment
loss. Software is amortised on a straight-line basis and based on its useful life, which is from 2 to 11 years.
At the end of each reporting period, the Group reviews the carrying amounts of computer software to determine whether
there is any indication of impairment, i.e. whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. Whenever the recoverable amount is less than the carrying amount, software is impaired to its
recoverable amount.
Costs associated with maintaining the performance of the computer software programmes are recognised as an expense in
the profit or loss as incurred.
Software is derecognised when:
(a) it is disposed; or
(b) when no future economic benefits are expected from use or disposal of the software.
The gain or loss on the disposal of software is defined as the difference between the net proceeds of the sale, if any, and the
net book value of the software.
Other intangible assets
Other intangible assets are initially recognised at cost when it is expected that future economic benefits will be realised from
their use. The cost of the intangible asset also includes every directly attributable cost which is required for the full
implementation, production and asset's proper operation. Some examples of directly attributable costs are:
 The staff cost which is directly identified and attributed to the development of a particular intangible asset;
 Payments to outside vendors and collaborators, which are attributed to the intangible asset.
Subsequent to initial recognition, other intangible assets are measured at cost less accumulated amortisation and
accumulated impairment loss. These assets are amortised in a period of 5-10 years, depending on the useful life of each
asset, on a straight-line basis. The useful life of other intangible assets is reviewed by the Group annually.
At the end of each reporting period, the Group reviews the carrying amounts of other intangible assets to determine whether
there is any indication of impairment i.e. whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. Whenever the recoverable amount is less than their carrying amount, other intangible assets are
impaired to their recoverable amount.
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Other intangible assets are derecognised when:
(a) they are disposed; or
(b) when no future economic benefits are expected from their use or disposal.
The gain or loss on disposal of the intangible asset is defined as the difference between the net proceeds of the sale, if any,
and the net book value of the intangible asset.
2.4.24 Property and equipment
The Group holds property and equipment for the purpose of using them for its business activity or for administrative
purposes. Property and equipment includes: land, own-use buildings, leasehold improvements, furniture and other
equipment, right of use assets and vehicles.
Property and equipment are initially measured at cost, which includes all costs necessary to bring an asset into operating
condition.
Property and equipment are subsequently measured at historical cost less accumulated depreciation and accumulated
impairment loss. Historical cost includes expenditure that is directly attributable to the acquisition of the items. At the end
of each reporting period, the Group reviews the carrying amounts of property and equipment to determine whether there is
any indication of impairment, i.e. whenever events or changes in circumstances indicate that the carrying amount may not
be recoverable. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying
amount is greater than its estimated recoverable amount. The recoverable amount is the higher of the asset's fair value less
costs to sell and the value in use.
Subsequent costs are included in the asset's carrying amount or are recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in
which they incur.
Depreciation on property and equipment is calculated using the straight-line method based on the estimated useful lives and
taking into account their residual values. The Group conducts an assessment of the estimate for the useful lives and the
residual values of the property and equipment on an annual basis.
Depreciation of property and equipment begins when it is available for use and ceases when it is derecognised. In the case
where the asset is idle or retired from active use, it continues to be depreciated until it has been fully depreciated. The useful
lives per fixed asset category is as follows:
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Computer hardware 3-5 years Leasehold improvements the shorter of us eful life and lease term Furniture and o ther equipment 5-10 years Vehicles 6-9 years Own-use buildings 25-40 years Land is not depreciated
Right of use assets are depreciated according to the asset category in which they belong.
An own-occupied property is derecognised and its carrying amount is written-off, according to the provisions of IAS 16, upon
disposal or when no future economic benefits are expected to flow to the Group. Property may be disposed through sale or
lease agreement (as lessor) or donation. The gain or loss on disposal of own-occupied property is defined as the difference
between the sale price (less cost to sell) and the carrying value of the property as at the date of the disposal. Such gain o r
loss is recognised in the income statement.
2.4.25 Investment property
Property that is held for long-term rental yields or for capital appreciation is recognised as investment property in the Group’s
statement of financial position. Investment property includes freehold land, freehold buildings or parts of buildings, land and
buildings held under leases.
A property interest that is held by the Group as a lessee is classified and accounted for as investment property if and only if
the definition of investment property is met according to IFRS 16 “Leases”.
Investment property is initially recognised at cost including related transaction costs.
After initial recognition, investment property is carried at fair value, as this is assessed by independent valuers. Fair value is
based on active market prices or is adjusted, if necessary, for any difference in the nature, location and condition of the
specific asset. Additionally, fair value measurement takes into account the Group’s ability to generate economic benefits by
using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest
and best use.
The following valuation methods are used:
i. Comparative Method. According to this method, the valuation is based on the conclusions drawn from research and
collection of information about other comparable properties.
ii. Income Approach. This method calculates the fair value of each property based on the capitalized value of the present
lease.
iii. Cost Approach. This method calculates the fair value of each property based on the cost of replacement of each
property or its exploitation.
iv. Residual Method. This method is based on the highest price a willing buyer would pay for a plot of land, in order to
use it and then operate it.
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The above mentioned valuation methods are used by independent valuers in the context of the fair valuation of investment
property. The fair value of investment property that is not estimated by valuers, is determined using a methodology based
on valuations that have been carried ou t.
Investment property that is being redeveloped for continuing use as investment property, or for which the market has
become less active, continues to be measured at fair value. Fair values of investment properties reflect current lease income,
as well as assumptions for future leases, taking into account current market conditions.
Pursuant to the provisions of IAS 40 “Investment Property”, subsequent expenses are recognised in the carrying amount of
the property only when it is probable that future economic benefits associated with the property will flow to the Group and
its cost can be measured reliably. Improvement and maintenance costs are recognised in the income statement during the
year in which they incur.
Changes in fair value are recognised in the income statement, during the year in which they incur.
If an investment property becomes own-occupied, it is reclassified as property and equipment and its fair value at the date
of reclassification becomes its new deemed cost.
Property that is being constructed or developed for future use as investment property is classified as property and equipment
and stated at cost until construction or development is complete, at which time it is reclassified and subsequently accounted
for as investment property.
An investment property is derecognised from the statement of financial position upon disposal. An investment property may
be disposed of through a sale or lease agreement. Gains or losses arising from investment property withdrawal or disposal is
calculated as the difference between the net disposal proceeds and the carrying amount of the investment property on the
date of the disposal. Such difference is recognised in the income statement.
2.4.26 Non-current assets held for sale (“HFS”) and Discontinued operations
The Group classifies a non-current asset as HFS if its carrying amount will be recovered principally through a sale transaction
rather than through continuing use. For this to be the case, the following conditions must be met:
a) the non-current asset must be available for immediate sale at its present condition;
b) its sale is highly probable;
c) the appropriate level of management is committed to a plan to sell;
d) an active programme to locate a buyer and complete the plan has been initiated;
e) the non-current asset must be actively marketed for sale at a price that is reasonable in relation to its current fair value;
and
f) the sale of the non-current asset must qualify as a completed sale within 12 months from the date of classification in
the HFS category.
Assets HFS are measured at the lower of their carrying amount and fair value less costs to sell. Assets HFS are not depreciated.
Gains/ losses from sale of these assets are recognised in the income statement.
A discontinued operation of the Group, refers to a clearly distinguished business operation of the Group that either has been
disposed of or is classified as HFS and:
 represents a separate major line of business or geographical area of operations;
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 is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operations;
or
 is a subsidiary acquired exclusively with a view to resale.
Assets and liabilities from discontinued operations are presented in a separate line in the statement of financial position a nd
are not offset. Similarly, profit or loss after tax from discontinued operations is also presented in separate line in the income
statement.
2.4.27 Inventory property
Inventory property includes land and buildings acquired by the Group through auctions for the full or partial recovery of their
receivables. These properties are included in “other assets” in the stat ement of financial position.
Inventory property includes land and buildings acquired that do not meet the requirements of IAS 40, as well as property
owned by the Group’s subsidiaries that are sold in the context of their normal course of business. Inventory property is
accounted for according to IAS 2 “Inventories” and are measured at the lower of cost and net realisable value. The cost of
the inventory property is determined using the weighted average cost method. The net realisable value is the estimated
selling price, less any expenses necessary to conclude the sale.
Inventory property is derecognised from the statement of financial position at its disposal. The gain/ loss resulting from th e
disposal of the inventory property is determined as the difference between the net realisable value and the carrying amount
of the property. This difference is recognised in the income statement.
2.4.28 Emission rights
The Group acts as a broker – dealer with respect to emission rights and as such these rights are accounted for as
inventories under IAS 2.
Emission rights are classified within line item "other assets" in the statement of financial position. The Group initially
recognises such rights at fair value and subsequently measures them at fair value less cost to sell. Any changes in fair value
less cost to sell are charged in the income statement during the financial period that the changes occur.
Emission rights are derecognised from the statement of financial position upon disposal.
2.4.29 Leases
Α. The Group is the Lessee
The Group and the Company following the provisions of IFRS 16 at the inception of a contract, assess whether the contract
is or contains a lease based on whether the Group and the Company have the right to control the use of an identified asset
for a period of time in exchange for a consideration and obtain substantially all the economic benefits from the use of the
asset.
At the commencement of the lease, the Group and the Company recognise a right-of-use asset (“RoU”) representing their
right to use the underlying asset and a lease liability representing their obligation to make lease payments.
Under IFRS 16, the Group and the Company recognise RoU assets and lease liabilities for all their lease contracts that fulfil
the definition of a lease.
The Group and the Company applying IFRS 16 for all leases:
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a) recognise lease liabilities in the statement of financial position;
b) recognise RoU assets in the statement of financial position;
c) recognise depreciation of RoU assets and impairment based on IAS 36 “Impairment of Assets” in the income statement;
d) recognise finance cost on lease liabilities; and
e) the total amount of cash paid (principal and interest) is presented within financing activities in the cash flow statement.
The initial measurement at cost of the RoU assets comprises of:
a) the amount of the initial measurement of the lease liability;
b) any lease payments made less any lease incentives received;
c) any initial direct costs; and
d) an estimate of costs to be incurred in dismantling and removing the underlying asset, restoring the site on which it is
located or restoring the underlying asset to the condition required by the terms and conditions of the lease.
Regarding the subsequent measurement and derecognition, the Group follows the accounting policies and accounting
treatment applied for the other assets accounted for in the same asset category as the RoU.
The lease liabilities are initially measured at the present value of the future lease payments using the incremental borrowing
rate. Subsequently, the lease liability is adjusted for interest and lease payments, as well as the impact of lease modifications
(which does not constitute a different lease contract). The Group and the Company derecognise the lease liability from the
statement of financial position when, and only when, it is extinguished—i.e. when the obligation specified in the contract is
discharged or cancelled or expired.
For short-term leases (lease term of 12 months or less) and leases of low-value assets (below € 5,000), the Group and the
Company recognise a lease expense on a straight-line basis over the lease term as permitted by IFRS 16.
Β. The Group is the Lessor
Operating leases
In case that the Group is the lessor under an operating lease (with a third party), the leased assets are stated and carried in
the statement of financial position like the other -non leased assets- of similar nature. Lease income of the Group is
recognised over the term of the lease by using the straight-line method or other systemic method considered as appropriate.
Finance leases
In case that the Group is the lessor under a finance lease (with a third party), the present value of the lease payments is
recognised as a receivable in the statement of financial position. The difference between the gross receivable and the presen t
value of the receivable is recognised as unearned finance income. Rental receipts are separated and reduce the balance of
the lease receivable.
2.4.30 Cash and cash equivalents
For the purpose of cash flow statement, cash and cash equivalents are defined as short-term, highly liquid investments that
are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
Cash and cash equivalents comprise balances with less than three (3) months maturity from the date of acquisition such as:
cash, unrestricted cash and balances with Central Banks, trading securities and due from banks. Mandatory reserves with the
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Central Bank are not available for everyday use by the Group and therefore, these are not included in balances with less than
three (3) months maturity.
2.4.31 Provisions
A provision is recognised when:
a) the Group has a present legal or constructive obligation as a result of past events;
b) it is probable, that an outflow of resources will be required to settle the obligation; and
c) the amount of the obligation can be reliably estimated.
If any of the aforementioned conditions are not met, no provision is recognised.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a
rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase
in the provision due to passage of time is recognised as expense in the income statement.
The amount recognised as a provision is the best estimate of the expenditure required to settle the present obligation as of
the balance sheet date. The amount of the provisions raised is reassessed at each reporting date.
2.4.32 Financial guarantee contracts
Financial guarantee contracts are contracts that require the issuer to make specified payments to reimburse the holder for a
loss that incurs because a specified debtor failed to make payments when due, in accordance with the terms of a debt
instrument. Such financial guarantees are issued by banks, financial institutions and other bodies on behalf of customers to
secure loans, overdrafts and other banking facilities.
Financial guarantees are initially recognised at fair value on the date the guarantee was given. Subsequent to initial
recognition, the Group’s liabilities under such guarantees are measured at the higher of: a) the initial measurement, less
amortisation calculated to recognise in the income statement the accrued fee income earned on a straight-line basis over
the life of the guarantee and b) the amount of the provision determined through the ECL calculation.
Any change in the liability relating to guarantees is recognised in the income statement, in the period in which it arises.
Any costs or fees paid by the Group or the Company, which are incremental and directly attributable transaction costs to
obtain a freestanding financial guarantee or a debt asset with embedded financial guarantee features that is not measured
at FVTPL, are capitalized and amortised over the life of the instrument with the EIR method.
2.4.33 Employee benefits
Α. Funded post-employment benefit plans
The funded pension schemes operated by the Group and the Company are financed through payments to grouped insurance
contracts or social security funds. The Group’s and the Company’s pension obligations relate both to defined contribution
plans as well as defined benefit plans.
The Group and the Company pay fixed contributions to Social Security Funds (state owned administered pension funds),
grouped insurance contracts, and have no legal or constructive obligation to pay additional contributions, if the Funds or th e
insurance companies do not hold sufficient assets to pay all employees the related benefits. Thus, these schemes are
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classified as defined contribution plans. The regular employee’s contributions constitute net periodic costs for the year in
which they are due and as such, they are recognised in the income statement under “staff costs”.
Defined benefit plans are pension plans that define the level of benefits to be provided, usually as a function of one or mor e
factors such as years of service, age and compensation.
The liability recognised in the statement of financial position in respect of defined benefit pension plans is the present valu e
of the obligation at the balance sheet date, less the fair value of the plan assets. The Group’s and the Company’s benefit
policy for the indemnities aligns with the IFRIC decision of IAS 19 fact pattern concerning the method of attributing benefits
to periods of service. According to the specific fact pattern, for those employees that are entitled to a lump sum benefit
payment only upon retirement and that the retirement benefit depends on the length of employee service prior to retirement
(capped to sixteen years of consecutive years of service), the retirement benefit is attributed to each of the last sixteen (16)
years of service prior to the retirement age.
The defined benefit obligation is calculated annually by independent qualified actuaries using the projected unit credit
method.
Actuarial gains and losses
Actuarial gains and losses are recognised directly to the equity of the Group and the Company, when they arise. These
actuarial gains and losses are not recycled to the income statement.
Past service costs
Past service cost is the change in the present value of the defined benefit obligation resulting from a plan amendment or
curtailment. This cost is recognised directly to the income statement, when the plan amendment or curtailment occurs.
Β. Non-funded post-employment benefit plans
The Group and the Company provide non-funded defined benefit plans to its employees on retirement. The requirements
for full vesting of benefit entitlements usually include the fulfilment of the conditions for normal retirement or the completion
of a minimum service period.
The expected costs of these benefits are accounted for using a methodology similar to that for funded defined benefit
pension plans. These obligations are valued annually by independent qualified actuaries.
2.4.34 Income tax
Income tax
Income tax benefit/ (expense) represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from “profit / (loss) before tax” as
reported in the income statement because of items of income or expense that are taxable or deductible in other years and
items that are never taxable or deductible. The Company’s current tax is calculated using tax rates that have been enacted
or substantively enacted by the end of the reporting period.
Deferred tax
Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the statement
of financial position and the corresponding tax bases used in the computation of taxable profit, to the extent that is probable
that taxable profits in the foreseeable future will be available against which such temporarily differences can be utilized.
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Deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other
than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial
recognition of goodwill.
Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and
associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference
and it is probable that the temporary difference will not reverse in the foreseeable future.
DTA arising from deductible temporary differences associated with such investments and interests, are only recognised to
the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary
differences and they are expected to reverse in the foreseeable future.
The carrying amount of DTA is reviewed at the end of each reporting period and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the asset to be recovered.
Deferred tax liabilities and assets are measured at the tax rates that are expected to apply in the period in which the liability
is settled or the asset realized, based on tax rates (and tax laws) that have been enacted or substantively enacted by the en d
of the reporting period.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in
which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and
liabilities.
Current and deferred tax for the year
Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other
comprehensive income or directly in equity, in which case, the current and deferred tax are also recognised in other
comprehensive income or directly in equity, respectively.
2.4.35 Debt securities in issue, hybrid capital and other borrowed funds
The liabilities from the issuance of the debt securities, hybrid capital and other borrowed funds are recognised initially at fair
value, net of incurred issuance costs.
After initial recognition, the debt securities and hybrid capital are subsequently accounted at amortised cost. Any difference
between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the
period of the securities using the EIR method.
If the Group and the Company purchase their own debt securities issued, these are removed from the statement of financial
position, and the difference between the carrying amount of the liability and the consideration paid is included in the incom e
statement.
2.4.36 Other financial liabilities measured at amortised cost
Other financial liabilities such as deposits from banks and from customers are measured at fair value upon initial recognitio n
and subsequently are measured at amortised cost.
2.4.37 Securitizations
The Group securitises financial assets. These assets are purchased by special purpose entities which in turn issue bonds to
investors. The Group consolidates special purpose entities when it controls these entities or holds main part of their risks. In
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such case, the bonds issued under the securitization of financial assets are presented in the statement of financial position
at their amortised cost, unless the securities issued are owned by the Group.
2.4.38 Share capital
Incremental costs directly attributable to the issue of share capital decrease equity.
Dividends on ordinary shares are recognised as a liability during the period in which they are approved by the Annual GM of
the Company’s Shareholders (“AGM”). Interim dividends are recognised as a deduction in the Company's equity when
approved by the BoD.
The cost of acquisition of treasury shares (including any attributable incremental transaction costs) is presented as a
reduction in equity, until the treasury shares are cancelled or disposed of. The gains or losses from the sale of treasury shares
are included directly in equity.
The number of treasury shares held by the Group does not reduce the number of shares issued. Treasury shares held by the
Company are not eligible to receive cash dividends.
2.4.39 Related party transactions
Related parties of the Group and the Company include:
a) Members of the Company’s BoD and Executive Committee, the Group Chief Internal Auditor, the Group Chief
Compliance Officer and the CEOs of the significant subsidiaries, collectively “Key Management Personnel”;
b) close family members of Key Management Personnel;
c) entities having transactions with the Company, that are controlled or jointly controlled by the Key Management
Personnel and their close family members;
d) the Company’s subsidiaries;
e) the Company’s associates and their subsidiaries;
f) the Company’s joint ventures and their subsidiaries; and
g) the HFSF which holds ordinary shares in the share capital of the Company and benefits from the special rights stated in
article 10 of Law 3864/2010, as amended and in force.
2.4.40 Fiduciary activities
The Group provides custody services to third parties for a wide range of financial instruments. These services include
safekeeping of securities, clearing and settlement of securities transactions in the Greek market and abroad, execution of
corporate actions, income collection, etc., on behalf of individuals, companies and institutional investors. The Group receives
fee income for providing these services. Trust assets are not assets of the Group and are not recognised in the financial
statements. The aforementioned services give rise only to operational risk, as the Group does not guarantee these
investments and therefore does not bear any credit risk.
2.4.41 Segment reporting
The CEO, supported by the Group Executive Committee members, is considered the Chief Operating Decision Maker for the
purposes of identifying the Group’s reportable segments. All inter-company transactions between business segments are
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undertaken on an arm’s length basis and inter-segment transactions and balances are eliminated within each relevant
segment.
2.4.42 Offsetting financial instruments
Financial assets and financial liabilities are offset and the net amount is presented in the statement of financial position when,
and only when, the Group has a legally enforceable right to set off the recognised amounts and intends either to settle on a
net basis or to realise the asset and settle the liability simultaneously.
3 Critical accounting judgements and key sources of estimation uncertainty
In the application of the Group’s accounting policies, which are described in Note 2, Management has made judgements and
estimates that affect the carrying amount of assets, liabilities, income and expenses. The estimates and associated
assumptions are based on historical experience and other factors that are considered relevant and are reviewed on an
ongoing basis. Changes to accounting estimates are recognised in the period in which the estimate is revised, if the revision
affects only that period. Actual results may differ from these estimates. Judgements and estimates that may result in an
adjustment in the figures described above, are presented below. The Group believes that the judgements, estimates and
assumptions used in the preparation of the Annual Financial Statements are appropriate.
3.1 Critical judgements in applying the Group’s accounting policies
The following are the critical judgements, apart from those involving estimations (which are referred separately below), that
Management has made in the process of applying the Group’s accounting policies and that have the most significant effect
on the amounts recognized in the Annual Financial Statements.
Significant increase in credit risk (SICR): The Group assesses whether a SICR has occurred since initial recognition of a
financial asset subject to ECL allowance, based on qualitative and quantitative criteria that include significant Management
judgement. Refer to Notes 3.2 and 4.2 for further information on the criteria applied.
Segmentation of financial assets with similar credit risk characteristics: The Group segments exposures on the basis of
similar credit risk characteristics for the purposes of assessing both SICR and measuring ECL allowance on a collective basis.
Exposures are grouped based on their type and credit risk rating or score. The different segments aim to capture differences
in PDs, as well as recovery rates in the event of default. The grouping of exposures is reviewed on a quarterly basis in orde r
to ensure that the groups remain homogeneous in terms of their response to the identified similar credit risk characteristics.
As far as SICR is concerned, the Group considers the date of initial recognition, as well as remaining maturity for each
individual exposure.
Selection and calibration of the ECL models: The Group uses various models in estimating the ECL allowance. Judgement is
applied in identifying the most appropriate model for each type of asset, as well as for determining the assumptions used in
these models. The complexity of the models, as well as dependency to other model-based inputs, are high therefore any
changes in inputs and data (e.g. internal credit ratings, behavioral scores etc.), as well as new or revised models, may
materially affect the ECL allowance.
Valuation of investment and inventory properties: The carrying amount of investment property and the net realizable value
of inventory property are measured at fair value. Fair value is estimated on an annual basis, by independent professional
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appraisers for the entirety of individually significant and a sample of non-individually significant properties. The Bank defines
a property as individually significant, if its carrying amount exceeds € 1 million. The total carrying amount of the individu ally
significant properties for the Group as of 31 December 2023 was € 1.8 billion. The fair value of properties not assessed by
independent appraisers, is determined using extrapolation techniques. The total carrying amount of investment and
inventory properties not individually valued by independent appraisers for the Group as of 31 December 2023 is € 0.3 billion
and € 0.7 billion, respectively. Had a different threshold been applied for defining individually significant properties, or a
different extrapolation technique on non-individually significant properties, the carrying amount of the said properties may
have been significantly different.
Impairment assessment of the Company’s equity shareholdings in Group companies: The Company assesses for impairment
in its investments in subsidiaries, associates and joint ventures in its separate financial statements, as described in Note 2.4.8.
The Company performs its assessment based on specific indicators (e.g. market capitalization, multiples etc.) and thresholds,
which Management believes are reasonable and supportable in the existing market environment. However, had other criteria
or thresholds been applied, the impairment assessment conclusion and measurement may have been different.
Assessment of control over investees: Management exercises judgement to assess if the Group controls another entity
including structured entities. The assessment of control or loss of control is carried out according to the Group’s accountin g
policies and the applicable accounting framework. M anagement’s assessment of control takes into account the structure of
the transaction, the contractual arrangements and whether the Group directs the substantive decisions that affect the
returns.
Assessment of offsetting criteria: The Group evaluates various netting agreements held with counterparties to determine
whether the offsetting criteria of IAS 32 are met. Management exercises judgement in assessing the legal enforceability and
set-off rights arising from these agreements across different jurisdictions and under various circumstances. This assessment
considers the requirements of applicable bankruptcy laws in each territory and the applicability of set-off rights, both in the
normal course of business and upon potential default events. The evaluatio n is conducted in accordance with the Group’s
accounting policies and the relevant accounting framework.
Sunrise III portfolio: The Sunrise III portfolio consisting of securitized, NPE loans, was classified as HFS in 2022. As of 31
December 2022, its carrying amount was € 169 million. The portfolio was derecognized in December 2023, as the Group
assessed that the conditions precedent for the sale of 95% of the subordinated notes issued by the securitisation Special
Purpose Vehicle (“SPV”) and held by the Bank were substantially fulfilled. The legal transfer of the said subordinated notes
was completed in January 2024. The corresponding impairment losses charged in the Group’s income statement, during
2023, amounted to € 25 million.
3.2 Key sources of estimation uncertainty
The assumptions and key sources of estimation uncertainty that have a significant risk of causing a material adjustment to
the carrying amounts recognized in the Annual Financial Statements within the next financial year, are discussed below.
Significant increase in credit risk criteria: The Group did not relax any of the thresholds or assumptions of the model-based
staging outcome compared to the year ended 31 December 2022. The Group’s stage allocation model is based on a complete
set of quantitative and qualitative criteria and incorporates lifetime expectations on macro-environment and probabilities of
default. The aforementioned model structure effectively captures expected changes in credit quality. As of 31 December
2023, the Group employed additional SICR criteria on retail exposures, which received moratoria during the Covid-19
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pandemic, considering their vulnerability to high energy prices and inflation, as well as on customers affected by the
catastrophic floods in the area of Thessaly. The aforementioned approach increased the gross balance scoped under lifetime
ECL calculation by € 457 million.
Determination of macroeconomic factors, scenarios and scenario weights: To achieve the objective of measuring ECL, the
Group evaluates a range of possible outcomes in line with the requirements of IFRS 9, through the application of three (3)
macroeconomic scenarios i.e. base, pessimistic and optimistic, in a way that reflects an unbiased and probability weighted
outcome. Each of the aforementioned scenarios, is based on the Group’s dedicated macro-forecasting model and
Management’s assumptions for future economic conditions in the form of macroeconomic, market and other factors.
For the year ended 31 December 2023, the three (3) aforementioned scenarios and related macroeconomic factors for the
collective loan assessment process were reviewed in light of the economic conditions that prevailed at that particular year.
According to the established methodology, the fan-chart method was used to represent the evolution of both forecasts and
the uncertainty around future estimates. The central projection of the single most likely path -the Baseline Scenario- is
determined. Then, the other two (2) scenarios - Optimistic and Pessimistic Scenarios - are determined based on a degree of
uncertainty and a degree of asymmetry. The Pessimistic Scenario corresponds to the threshold partitioning the worst 20% of
the outcomes from the best 80% of the outcomes. The Baseline Scenario corresponds to the middle of the distribution,
covering 60% of the outcomes. The Optimistic Scenario corresponds to the threshold partitioning the top 20% of the
outcomes from the remaining 80%.
As a consequence, the weight allocation between the three (3) scenarios remains unchanged compared to the year ended
31 December 2022. The Optimistic and Pessimistic Scenarios were weighted with a 20% probability each, while a 60%
probability weight was assigned to the Base Scenario to best reflect Management’s current sentiment regarding the
boundaries of economic outcomes. Refer to Note 4.2 for more details, including an analysis of the sensitivity of the reported
ECL to changes in estimated forward looking information.
The table below presents the expected annual average 4-year 2023-2026 forecasts, for each key economic variable and
scenario utilized in the ECL calculation of the collectively assessed loans and advances to customers at amortised cost as at
31 December 2023.
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31/12/2023 31/12/2022 ECL Key drivers Scenario % % Real GDP growth Optimistic 5.4 6.5 Base 3.4 4.2 Pessimistic 1.5 2.1 Unemployment rates Optimistic 9.1 10.2 Base 11.1 12.2 Pessimistic 12.9 14.1 Price index (Residential) Optimistic 10.4 8.6 Base 8.6 6.7 Pessimistic 6.7 4.9 Price index (Non residential) Optimistic 6.1 5.5 Base 4.1 3.4 Pessimistic 2.1 1.4
In 2023, the Greek economy, remained on a growth trajectory, despite the uncertainty that prevails in the international
environment and the macroeconomic impact of monetary policy in the Eurozone. In the first nine months of 2023, real GDP
increased by 2.2%, on an annual seasonally adjusted basis, a rate that although slower than the corresponding 2022 level,
remains higher than the Eurozone average (0.6%). Moreover, the gradual upgrade of the country’s credit rating, resulted in
the recovery of the “investment grade” for the first time since 2010.
The inflationary pressures, which were a key feature of 2022 at both international and domestic level, showed a clear trend
of de-escalation. In 2023 national inflation was limited to 3.5% YoY, from 9.6% in 2022.
In the labor market, based on seasonally adjusted data, employment increased by 1.5% in 2023 on an annual basis and the
unemployment rate decreased to 10.6%, compared to 12.4% in 2022.
In the real estate market, the upward trend in price indices continues. In the first nine months of 2023, the residential real
estate price index increased by 13.9%, on an annual basis, compared to an increase of 11.2% in the corresponding period of
2022. In the first semester of 2023 the office price index increased by 6.6%, on an annual basis, compared to a 2.2% increase
in the first semester of 2022.
For the macroeconomic environment developments refer also to Note 2.2.
As at 31 December 2023, the Group’s forecasts of the aforementioned economic variables across, for each scenario for 2023
and 2024, are the following:
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202 3 202 4 ECL Key drivers Scenario Optimistic Base Pessimistic Optimistic Base Pessimistic Real GDP growth 4.5 3.4 2.4 5.5 3.5 1.8 Unemployment rates 10.6 11.7 12.6 9.2 11.2 12.9 Price index (Non resid ential) 4.9 3.6 2.2 5.9 4.0 2.2 Price index (Residen tial) 12.4 11.4 10.5 10.5 8.8 7.1
Estimation of credit risk parameters on collective ECL assessment: The ECL calculations are based on input parameters, i.e.
EAD, PDs, LGDs, and Credit Conversion Factors (“CCFs”) e tc., incorporating Management’s view about the future. The Group
also determines a) the links between macroeconomic scenarios and economic inputs, such as unemployment levels and
collateral values, and b) the effect on risk parameters. Forecasting of the risk parameters incorporates a number of
explanatory variables, such as GDP, unemployment rate etc., which are used as independent variables for optimum predictive
accuracy. Refer to Note 4.2 for more details, including an analysis of the key sources of estimation uncertainty.
Estimation of ECL on collectively assessed defaulted exposures: Under the current economic circumstances, the Group
acknowledges additional volatility on expected recoveries from defaulted exposures. Additional losses of € 30 million have
been considered to account for the aforementioned volatility.
Assessment of ECL on an individual basis: For loans that are assessed for impairment on an individual basis, the Group takes
into account all available evidence on a case-by-case basis and the ECL measurement is determined by using a discounted
cash flow methodology. The e xpected cash flows are based on Management’s estimates as at the reporting date, reflecting
reasonable and supportable assumptions and projections of future recoveries, based on a variety of factors, such as business
plans and available cash flows, liquidation of collateral in cases it is likely that the recovery of the outstanding amount will
include liquidation of the collateral, the fair value of the collateral at the time of expected liquidation, the costs of obtaining
and selling the collateral etc. The ECL allowance is very sensitive to the assumptions used in the estimate. There could be a
wider range of possible inputs on any individually assessed lending exposure. As a result, it is not practicable to meaningfully
quantify ranges of potential outcomes for this type of ECL allowance, because of the diverse nature and circumstances related
to these inputs and the wide range of uncertainties involved.
Recognition of deferred tax asset (DTA): Management evaluates the recoverability of the Group’s and the Company’s DTA
at each reporting period. The recognition of a DTA relies on Management’s assessment of the probability and sufficiency of
future taxable profits to absorb tax losses, future settlement of existing taxable temporary differences and ongoing tax
planning strategy. In the absence of a history of taxable profits, the most significant uncertainty relates to expected futur e
profitability and to the applicability of tax planning strategy. The aforementioned assessment is performed by applying:
a) the prevailing tax legislation related to offsetting of tax losses carried forward with taxable profits generated in
future periods (e.g. five years). Following the addition of par.3A to article 27 of Greek Law 4172/2013 (Greek Income
Tax Code, “ITC”) under Greek Law 4831/2021, the tax amortization of crystallized tax losses from write-offs and
disposals of loans that have occurred after 1 January 2016, from 1 January 2021 and onwards can be carried forward
for offsetting over a period of 20 years. Refer to Note 16 for further information; or
b) article 27A of the ITC, as currently in force, which allows credit institutions, under certain conditions, and from 2017
onwards to convert DTAs arising from (a) private sector involvement (“PSI”) losses, (b) accumulated pro visions for
credit losses recognized as at 30 June 2015, (c) losses from final write off or the disposal of loans and (d) accounting
write offs, which will ultimately lead to final write offs and losses from disposals, to a receivable (Tax Credit) from
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the Greek State. Refer to Note 16 for further information.
Fair valuation of real estate properties: The fair value of real estate properties is determined by reference to current market
prices for similar properties, adjusted as necessary for condition and location, or by reference to recent transactions updated
to reflect current economic conditions. Discounted cash flow techniques may be employed to calculate fair value where there
have been no recent transactions, using current external market inputs such as market rents and interest rates. The fair valu e
measurements are carried out by appropriately qualified independent professional appraisers who consider information
from various sources, such as: (a) current prices in an active market for properties of different nature, condition or location
(or subject to different lease or other contracts), adjusted to reflect those differences, (b) recent prices of similar properties
in less active markets, with adjustments to reflect any changes in economic conditions since the date of the transactions tha t
occurred at those prices, and (c) discounted cash flow projections based on reliable estimates of future cash flows, derived
from the terms of any existing leases and other contracts, and (where possible) from external evidence such as current market
rents for similar properties in the same location and condition and relevant market researches by type of asset, in order to
determine capitalization and discount rates that reflect current market assessments of the uncertainty in the amount and
timing of the cash flows. The fair valuation of real estate properties has a high degree of uncertainty involved, with a wide
range of possible outcomes on all properties based on their grouping for valuation purposes, hence it is not practicable to
meaningfully quantify ranges of potential outcomes to changes in the various inputs utilized in the fair value measurement.
For all valuations conducted for the measurement of investment properties as of 31 December 2023, the Group has
considered sustainability and Environmental, Social and Governance (“ESG”) factors in the relevant reports, according to the
Red Book Global Standards VPS3. All valuation reports provide a description of the sustainability-related property
characteristics and attributes that have been collected, including climate matters.
As described in Ν ote 2.2, there are risk factors that could negatively affect developments in the Greek economy and its
prospects. Any worsening of the geopolitical crisis in Ukraine and the Middle East increases the risk of disruptions in energ y
supply, with a possible impact on both energy prices and overall price levels as a whole. Additional risks for the prospects of
the Greek economy are the maintenance of the tighter monetary policy that can burden economic activity and weaken the
stimulation of investments as well as delays in the implementation of public and private projects and in meeting the RRF
schedule. Finally, environmental challenges and extreme weather events are a growing risk to the economy. Εxtreme weather
events like the fires and floods that occurred in 2023 in Greece, could damage the repayment capacity of the affected
borrowers from those extreme weather events and the value of collaterals in those areas.
Provisions
The Group establishes provisions in its financial statements for which it believes it is probable that a loss will incur in the
future and the amount of the loss can be reasonably estimated. Τhese provisions are derived from the best estimate of the
outflow required to settle the present obligation. This estimate is determined by Management after taking into account
experience from relevant transactions and in some cases expert reports. At each reporting date, provisions are revisited in
order to reflect the best estimates of the obligation.
Irrevocable Payment Commitments (“IPCs”)
The Bank pays part of its ex ante contributions to the Single Resolution Fund (“SRF”) in the form of IPCs, backed with cash
collateral, which shall be returned when the Bank pays its IPC. As of 31 December 2023 and 2022, the Bank had posted IPC
collateral of € 32 million and € 26 million, respectively, which refers to contribution periods starting from 2016. The Bank
accounts for the IPC under IAS 37, thus, a provision is recognized only when it becomes probable that an outflow of resources
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would be required to settle the obligation. As of 31 December 2023 and 2022, such probability was assessed as remote,
therefore, the IPC was accounted for as a contingent liability. The IPC collateral posted by the Bank is recognized within line
item “other assets”. In 2021, a former foreign European credit institution requested the return of collateral linked to its ex
ante contributions to the SRF after its authorisation was withdrawn. The Single Resolution Board (“SRB”) refused the return,
arguing that the contributions were non-refundable and that the return of IPC collateral required the prior payment of the
amount committed. On 25 October 2023, SRB’s rejection was confirmed by the Court of Justice of the EU (“CJEU”) on the
basis that contributions whether in cash or in the form of IPCs must be regarded as definitive. The CJEU decision is not
considered final, as it was appealed, hence, there is no clear basis for changing the accounting treatment followed up to and
including the date that these financial statements were authorized for issue. Had the Bank charged in the income statement
the IPC collateral payments as they incurred, then the Group’s equity would decrease by € 32 million as of 31 December
2023, while the impact on profit before tax for 2023 would be € 6 million. Any change in the IPC accounting treatment does
not affect the Group’s regulatory capital, as the total outstanding amount of IPC collateral is already deducted from regulatory
capital.
Held-for sale classification
Monza portfolio: Project Monza refers to the sale of a portfolio of NPEs with gross book value amounting to € 3 40 million.
The Monza portfolio comprises consumer, mortgage and business loans and its sale is expected to be completed within 2024.
Management assessed and concluded that the IFRS 5 criteria are met. Therefore, the said portfolio has been classified as HFS
and its carrying amount was written down to its recoverable amount. The ECL impairment charge recognised in the income
statement for the year ended 31 December 2023, as a result of the aforementioned write-down of the portfolio, stood at €
52 million.
Impairment measurement of the Company’s investment in Piraeus Bank
As of 31 December 2023, the Company estimated the recoverable amount of its investment in the Bank to € 5.5 billion, which
approximated the carrying amount of the investment and therefore no impairment loss was recognized or reversed during
the year ended 31 December 2023. The recoverable amount was estimated based on a value-in-use calculation by applying
a pre-tax discount rate of 21.6%. While Management believes that the assumptions applied were appropriate, a combination
of reasonably possible changes in such assumptions could have resulted in additional impairment charges or reversals of the
existing ones. Specifically, an unfavorable change by +0.5% in the discount rate or -0.5% in the terminal growth rate would
result in additional impairment charges of € 217 million and € 127 million, respectively. Similarly, a favorable change by -0.5%
in the discount rate or +0.5% in the terminal growth rate would result in reversals of impairment charges of € 250 million and
€ 150 million, respectively.
4 Financial Risk Management
4.1 Risk Management Framework
Effective risk management is a key factor of the Group’s RMF in order to deliver sustainable returns to its shareholders.
Management allocates substantial resources to improving its policies, processes, methods and infrastructure to ensure
compliance with best international practices and the guidelines of the Basel Committee for Banking Supervision. The
identification and management of risks arising from the Group’s activities is a priority in the development of its business
strategy. In this regard, a framework for prudent risk management has been established.
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Management has adopted practices regarding risk management governance, taking into account all relevant guidelines and
regulatory requirements, as set by the Basel Committee on Banking Supervision, the EBA, the ECB, the Bank of Greece (“BoG”)
and the Hellenic Capital Markets Commission (“HCMC”), including any decision of the competent authorities supervising the
Group’s subsidiaries.
The responsibility for the development and oversight of the RMF lies with the BoD. The BoD ensures the development of an
appropriate RMF, including strategy and policies, by setting acceptable risk limits, while shaping an appropriate internal
environment, so that every employee of the Group, is aware of the nature of the risks associated with his/her duties. In
particular, the BoD has established the Risk-Committee whose primary role is to oversee risk management across the Group.
Risk Committee
The Risk Committee is responsible for exercising the duties set forth in its charter, in order to assist the BoD in fulfilling its
responsibilities with respect to :
 existence of an appropriate strategy for the risks undertaken and the definition of the risk appetite statements and
limits, as well as the supervision of their implementation;
 establishment of principles and rules that will govern risk management with regards to the identification,
assessment, measurement, monitoring, control and mitigation of risks;
 development of the RMF and the incorporation of appropriate risk management policies and controls during the
business decision-making process;
 Group compliance through strict and reliable procedures with respect to the regulatory framework for risk
management functions.
The Risk Committee was established by a BoD decision, in accordance with the requirements of BoG Governors’ Act No.
2577/9.3.2006. The Risk Committee comprises of non-executive members of the BoD, who possess the appropriate
knowledge, skills and specialization, in order to comprehend and monitor the risk management strategy of the Group.
The Chairman of the Risk Committee is appointed by the BoD and must possess significant experience in commercial
banking and preferably in risk and capital management, as well as familiarity with the local and international regulatory
framework.
The representative of the HFSF participates in the Risk Committee, with full voting rights.
The Risk Committee’s mission is to ensure that:
 the Group has a well-defined Group Risk & Capital Strategy and Risk Appetite Framework (“RAF”) that is consistent
with its business goals and the available human and technical resources required. The risk appetite of the Group is
articulated and clearly communicated in a set of quantitative and qualitative statements, and specific limits, for the
material risks;
 all risks connected to the activity of the Group are effectively identified, assessed, measured, controlled, mitigated
and monitored; and
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 the risk management and control framework in place, including policies, methods and tools, complies with Risk &
Capital Strategy and Risk Appetite as well as regulatory and supervisory requirements.
The Risk Committee convenes, upon its Chairman’s invitation, as ma ny times as considered necessary in order to accomplish
its mission, but not less than once a month. Each member of the Risk Committee is entitled to request the convocation of
the Risk Committee in writing for the discussion of specific issues.
Group Risk Management (“GRM”)
GRM is an independent unit in relation to other units of the Group, that have revenue generating activities and/or are
accountable for transactions. The unit carries out Risk Management and Credit Risk Control responsibilities, in accordance
with the BoG Governor’s Act 2577/9.3.2006 and Greek Law 4261/2014.
GRM is responsible for the design, development and implementation of the Group’s policies on risk management and capital
adequacy in accordance with the directions of the BoD, which covers the full range of the Group’s activities for all types of
risk. GRM is subject to review by Group Internal Audit as for the adequacy and effectiveness of the RMF (policies,
methodologies and procedures).
The Group’s Chief Risk Officer (“CRO”) is the Head of GRM and is appointed by the BoD upon recommendation and
endorsement of the Risk Committee. The BoG and Single Supervisory Mechanism (“SSM”) are notified of the appointment or
replacement of the CRO. The CRO participates in all major Executive Committees, including the Group Executive Committee,
and has a dual reporting line to the Risk Committee and the Group’s CEO, with direct access to the Chairman of the Risk
Committee, whenever deemed necessary.
The current structure of GRM allows for an organized approach to risk management in a consistent, balanced and integrated
manner. In addition, the revised structure is better aligned with the Group’s strategic targets, including the profitable and
sustainable business model, optimization of capital allocation, strengthening of risk monitoring and controls and adoption of
superior governance standards as well as meeting the regulatory demands and oversight.
Taking into consideration the overall mission and objectives of G RM, a three (3) pillar structure was established, with clear
and discrete functional areas and responsibilities, and comprised by:
 Credit Risk Management;
 Capital Management & Risk Strategy, Market, Liquidity & Asset Liability Management (“ALM”) Risks;
 Group Control & Risk Data & Solutions.
Furthermore, as part of the Bank-wide implementation of the Internal Control System Enhancement initiative, the role of
Segment Controller was created with a discrete reporting line to CRO (Segment Head).
The key responsibilities of GRM are as follows:
 develop, evaluate, and recommend to the CRO, amendments with respect to the RMF for the Group’s activities,
according to international best practices as well as legal, regulatory and supervisory requirements. Ensure that the
framework is reviewed at least annually or on an ad hoc basis in the event of (a) changes in the Group’s strategy or
business model, or (b) changes in the regulatory framework, business environment or/and in the macroeconomic
conditions. In particular, GRM develops the strategy, policies and procedures in relation to the:
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 identification, assessment, measurement, management/control, monitoring and reporting of potential
and actual risk exposures;
 establishment, allocation and monitoring of appropriate risk limits (e.g., credit, market, liquidity and
operational risks) in cooperation with the relevant committees and units of the Group;
 capital management objectives;
 monitor the implementation of the RMF, including the risk and capital strategy, along with the regulatory
requirements and the guidelines of Management;
 monitor the adherence to the approved RAF on an ongoing basis;
 independent review of compliance with Credit Policies/Procedures and the correct implementation of credit
decisions;
 oversee the alignment of the Risk and Capital Strategy with the Business Plan, Restructuring Plan, Funding Plan,
Budget, ICAAP, ILAAP and Recovery Plan;
 develop, conduct, monitor and report the Group’s ICAAP and ILAAP;
 produce and report the capital adequacy requirements under Pillar I (e.g. credit, market and operational risks);
 document and report the capital adequacy and risk management regulatory disclosures under Pillar III;
 supervise the development and alignment of the subsidiaries' RMFs with the Group’s RMF and practices;
 raise awareness about risk exposure, promote risk management culture and provide support on risk issues to all
business units across the Group;
 participate in the development of the Group and the Bank’s Credit Policy, which is approved with the consent of
GRM;
 lead and coordinate the design and execution of Group-wide solvency stress tests. Exercise periodic and/or
temporary stress tests with base and adverse scenarios tailored to the nature and scope of the operations of the
Group for all types of risk;
 ensures an objective, consistent, controlled and transparent process across the standard model lifecycle through
the Model Management and Governance Framework (“MMGF”) and defines the key functions involved in managing
the model lifecycle and the principles of model governance;
 establish and validate loan impairment models (compliant with the IFRS 9 framework);
 develop risk-based pricing models;
 assess new products and activities or significant changes to existing ones prior to their introduction;
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 monitor the new production profile and communicate the results to the Bank’s Business Units.
GRM comprises the following units:
Credit Risk Management
Credit Risk Management is responsible for the development of the RMF (policies, methodologies, models and processes)
with respect to credit risk. To this end, the unit makes use of appropriate methodologies, including models, to identify,
measure and monitor the above risks. Furthermore, Credit Risk Management produces risk-related information (reporting)
to Management, corresponding Committees as well as to the supervisory authorities.
Credit Risk Management continued to develop and lead a number of initiatives aimed at assessing credit risk and effectively
managing its impact on the loan portfolio. More specifically, Credit Risk Management is committed to the identification and
effective management of credit risk through an integrated framework of policies, methodologies, procedures and systems
that enable the development of a profitable loan portfolio within the acceptable risk profile.
Capital Management & Risk Strategy, Market, Liquidity & ALM Risks
Capital Management & Risk Strategy, Market, Liquidity & ALM Risks supports the development and implementation of the
Group’s Strategy, aiming at the effective management of risks and balance sheet optimization. To this end, the unit is
responsible for the development and maintenance of the Risk and Capital Strategy, as well as RAF of the Group, in accordance
with the Risk Committee and BoD’s directions and guidance.
Moreover, it is responsible for the design and implementation of the Group’s ICAAP and leads the preparation and execution
of regular enterprise-wide stress tests. Further, it is responsible for the coordination and overall maintenance of the Group’s
Recovery Plan.
Finally, Capital Management & Risk Strategy, Market, Liquidity & ALM Risks is responsible for the measurement, monitoring
and reporting of capital requirements and capital adequacy ratios of the Group.
Group Control & Risk Data & Solutions
Group Control & Risk Data & Solutions is responsible for the identification, monitoring and assessment of all types of risks
(credit, market, operational, liquidity, etc.) arising from the Group’s activities, through the development, implementation
and evaluation of an adequate internal control system, in order to ensure the efficiency and the soundness of the Group’s
operations and the achievement of its business objectives. Furthermore, the unit is collaborating with Segment Controllers
to accomplish its mission.
In addition, Group Control & Risk Data & Solutions is responsible for the development and implementation of an effective
operational RMF (policies, methodologies and procedures) based on the Group's Risk and Capital Strategy and regulatory
requirements.
Moreover, the unit is responsible for the development and implementation of the credit risk review and assessment of the
Group's loan portfolio. More specifically, it systematically reviews and assesses credit exposures, limits and undertaken risks
at borrower (or Group of borrowers) level as well as adherence to the Group’s Credit Policy. Moreover, it reviews and
monitors the credit process through sampling. In order to accomplish a targeted and effective review focusing on high risk
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borrowers, Credit Control is further broken down in two (2) sub-units, namely Performing Assets, and Troubled Assets.
Finally, Group Control & Risk Data & Solutions, via the Model Validation Unit, is responsible to conduct independent
assessments o f the Bank’s models in order to validate their robustness, accuracy and effectiveness. The scope of validation
includes credit risk, operational risk, market risk, liquidity and interest rate risk models as well as other models used by the
Bank. Assessments are prioritized in the context of the Annual Model Validation Plan, which is approved by the Risk Model
Oversight Committee. The Model Validation Unit submits the results of its validation activities, including respective finding s
and recommendations to the Risk Model Oversight Committee for approval.
Segment Controller
The Segment Controller is responsible for embedding a culture of operational risk management and ensuring the design and
implementation of an effective internal control system within the segment under his / her responsibility, with the objective
of achieving operational excellence and remediating control deficiencies in the segment. The Segment Controller also
reviews, supplements and comments on the operational risk assessment of the Unit Controllers.
In addition, the Segment Controller provides regular and ad hoc reporting to the CRO (segment Head) concerning operational
risk profile of the segment and remediation actions to address underlined risk and control issues.
CRO Office
The CRO Office manages the operational aspects of GRM. It also serves as the secretariat of the Risk Committee and facilitates
the discharge of its responsibilities.
Risk Culture
A formal Risk Culture Program has been established under the supervision of the CRO, to channel the Group’s commitment
to improving risk awareness and fine-tuning the balance between risk taking and required returns. The Risk Culture Program
is sponsored by the CEO and a cross-functional Steering Committee of senior Management members, who oversee its
implementation.
The scope of the Risk Culture Program is to exemplify the desired behaviors and routines that reinforce sound risk taking
judgement and promote ethical behavior towards all stakeholders. The Group has put in place a number of measures to
ensure that any risk-taking activities, that exceed the Group’s risk appetite are identified, assessed, escalated, and addressed
in an effective and timely manner. Efforts so far focused on redefining processes, systems, and frameworks linked to an
augmented governance and enhancement of risk awareness. The next phase is to anchor the desired behaviors and routines
to establish a strong risk culture where sound risk taking is promoted, emerging risks are addressed, and all employees
conduct business in a legal and ethical manner.
Committees
Market Scenarios Steering Committee: The Market Scenarios Steering Committee reviews and approves scenario variables
and probability weights proposed by the Bank’s Economics and Investments Strategy Unit. It also reviews and approves
temporary adjustments on the credit risk parameters.
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Provisioning Committee: The Provisioning Committee is responsible for approving the quarterly ECL allowance estimates on
loans and advances to customers at amortised cost of the Bank. The ECL measurement is estimated based on the relevant
policies and procedures for exposures assessed on either an individual or collective basis.
The Provisioning Committee is, also, mandated to periodically, but at least annually, review the policies and methodologies
(parameters, scenarios, weighting of scenarios etc.) applied to all Group entities according to the Impairment Policy in
estimating ECL.
Finally, the Provisioning Committee is responsible for:
a) Reviewing and approving material exception / override requests communicated by the heads of the Business Units
(NPE Unit, Credit Risk, etc.) or resolving disagreements between the approving bodies;
b) Reviewing and approving requests for accounting write-off, provided they meet specific criteria, as defined in the
Debt Forgiveness & Accounting Write-Off Policy.
Risk Models Oversight Committee (“RMOC”): The RMOC is chaired by the CRO and is mainly responsible for the appropriate
implementation of the M Μ GF, as well as the review and approval of model related issues.
In particular, RMOC reviews and approves the Model Development Framework, the development of new models, as well as
the use and potential removal/replacement of existing ones.
It also reviews and approves the Model Validation Framework, the Annual Model Validation Plan and the model validation
assessments submitted by the Model Validation Unit and monitors compliance with the agreed timetable for the
implementation of remediation actions.
4.2 Credit Risk
Credit risk is defined as the potential risk that a debtor or counterparty of the Group will fail to meet its obligations in
accordance with agreed terms and conditions.
Credit risk is the most significant risk for the Group and therefore its effective monitoring and ongoing management is a top
priority for the senior management. The unremitting development of the infrastructure, systems and methodologies, aiming
to the quantification and the evaluation of the credit risk, is a prerequisite to support both Management and the business
units on a timely and efficiently decision-making process, policy formulation and fulfillment of supervisory requirements. The
Group’s exposure to credit risk mainly arises from corporate and retail credit, various investments, over the counter (“OTC”)
transactions, derivatives, as well as from transactions’ settlement. The volume of risk associated with such credit exposures
depends on various factors, including general economic conditions, market developments, debtor’s financial condition,
amount / type / duration of exposure and the existence of collaterals and guarantees.
The implementation of the credit policy, which sets out the Group’s credit risk management principles, ensures effective and
consistent credit risk monitoring and control. Management applies a consistent policy and practice with respect to the credit
assessment, approval, renewal and monitoring procedures. All credit limits are reviewed and / or renewed, at least annually,
and the responsible approval authorities are determined, based on the size and the category of the total credit risk exposure
undertaken by the Group for each borrower or group of connected borrowers (one obligor principle).
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Management has established a credit quality review process for the early identification of potential changes in counterparty
creditworthiness, including regular collateral revaluations. Counterparty limits are set using a credit risk classification system,
which assigns a risk rating to each counterparty. Risk ratings are subject to regular revision. The purpose of the credit quality
review is to enable Management to assess the potential loss arising from the risks to which it is exposed, and consequently,
to take timely corrective actions.
Analysis of Concentration Risk
Concentration risk can arise from various types of incomplete portfolio diversification, such as the concentration risk in large
borrowers, economic sectors, geographical areas and types of collateral, and is being monitored on a regular basis.
In addition to monitoring supervisory limits, the Group has established internal limits within the RAF, which are reviewed
annually.
Country Risk
Country risk reflects the risk arising from macro-economic instability, social events or political uncertainty in a country,
including nationalization, expropriation of assets and debt restructuring, affecting the Group and the Company’s earnings
and /or capital. It includes sovereign, transfer and political risks.
Counterparty Credit Risk
Counterparty credit risk (“CCR”) is defined as the risk that one of those involved in a transaction might default on its
contractual obligation. It refers to derivative instruments, repurchase transactions, securities or commodities lending or
borrowing transactions, long settlement transactions and margin lending transactions.
For the effective management of CCR, Management has in place procedures and guidelines for defining, reviewing and
monitoring credit limits as well as concentration limits set on a counterparty rating basis. Limits are set either in nominal
amounts or risk units (credit equivalent), depending on the transaction and they are revised at least annually. The monitorin g
of counterparty credit limits’ utilization is monitored on a daily ba sis.
With respect to credit risk mitigation techniques, Management has in place comprehensive and enforceable legal agreements
with its counterparties such as International Swap Derivatives Association Agreement (“ISDA”), Credit Support Annex (“CSA”)
and Global Master Repurchase Agreement (“GMRA”), which also enable also the effectiveness of CCR management. A GMRA
permits the netting of both rights and obligations that arise from derivative transactions that have been performed under
such a master agreement upon the counterparty’s default, resulting in a single net claim. Moreover, in order to mitigate
settlement risk and under specific transactions and conditions covered within master agreements, payment netting is
performed. In order to monitor settlement exposures, Management has set daily settlement limits per counterparty.
Derivative Financial Instruments
Credit risk arising from derivatives is, at any time, limited to those with positive fair values, as recorded in the Statement of
Financial Position. In the case of credit derivatives, the Group is also exposed to, or protected from, the risk of default of the
underlying counterparty referenced by the derivative. However, to reflect potential losses, the Group applies portfolio-based
adjustments for credit risk.
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With gross-settled derivatives, the Group is also exposed to settlement risk, being the risk that the Group fulfils its obligation,
but the counterparty fails to deliver the counter value.
Definition of Credit Impaired Exposures / Default
As of 1 January 2021 the Group applies and fully complies with the new regulatory requirements for the DoD issued by EBA
(EBA/GL/2016/07) which aims to converge the definitions of default for accounting and regulatory purposes (IFRS 9, EBA and
Capital Requirements Regulation – “CRR” guidelines). The requirements for the new DoD are stipulated in Article 178
(“Default of an obligor”) of the Regulation (EU) No 575/2013 (CRR), as well as in the Guidelines and Regulatory Technical
Standards issued by the EBA on the application of the DoD. The Group has aligned the DoD for financial reporting purposes
with the definition of NPE used for regulatory reporting. Thus, in accordance with the Group’s and the Bank’s Impairment
Policy, a financial asset is considered to be credit impaired and placed in Stage 3 if it is classified as NPE. Under the new DoD,
the terms NPE, Defaulted and Impaired are aligned.
The new DoD applies to all the entities of the Group, considering local regulations and specific characteristics of each
jurisdiction. In line with the relevant regulatory requirements and the guidelines for the identification of default, the Group
implements both an objective indicator (past due criterion), as well as a set of quantitative and qualitative unlikeliness to pay
indicators to capture indications where the obligor is considered by the Group as unlikely to pay its credit obligations in full.
More specifically, a default is considered to have occurred with regard to a particular obligor when either or both of the
following two events have taken place:
 Past Due Criterion: The obligor is past due for more than 90 consecutive days on any material credit obligation to
the Group;
 Unlikeliness to Pay: The Group considers that the obligor is unlikely to repay its obligations in full, without recourse
by the Group to actions such as realizing security and based on the criteria that the Group has specified.
In principle, the DoD is applied at the contract level for the retail portfolio and at the obligor level for the non-retail portfolio.
In order for an exposure classified as defaulted to return to a non-defaulted status, the behavior of the contract for the retail
portfolio or the obligor for the non-retail portfolio is monitored for a pre-defined period of time (i.e. probation period) within
which the exposure continues to be classified in default status. If the Group considers that for a previously defaulted exposure
no trigger of default continues to apply at the end of the probation period, then a return to a non-defaulted status takes
place.
Credit Rating Models (PDs)
Reliable credit risk measurement is a top priority within the Group and the Bank’s RMF. The continuous development of
infrastructure, systems and methodologies aimed at quantifying and evaluating credit risk is an essential precondition in
order to timely and efficiently support Management and the business units in relation to decision-making, policy formulation
and the fulfillment of supervisory requirements.
The Group and the Bank run separate internal models for its corporate portfolios in which its customers are rated from 1 to
18 using internal grades (master scale). The models incorporate both qualitative and quantitative information and, in additio n
to information specific to the borrower, utilize supplemental external information that could affect the borrower's behavior.
For the retail portfolio, the Group and the Bank run Credit Rating (Scoring) Models that incorporate demographic / behavioral
Piraeus Financial Holdings Group – 31 December 2023
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/ credit bureau information. These information sources are first used to determine the PDs, within the existing regulatory
default definition framework. For ECL calculation, the PDs are adjusted to incorporate forward-looking information and
classification of the exposures, by staging. This is repeated for each economic scenario as appropriate.
Lending Portfolio
For credit risk measurement and monitoring purposes related to the Group’s and the Bank’s loans and advances to customers
at amortised cost, the following are performed at a counterparty level:
 The customer’s creditworthiness and the PD on its contractual obligations is systematically assessed;
 The Group and the Bank’s probability of potential recovery in the event of the debtor defaulting on its obligations is
estimated, based on existing collateral, guarantees provided and curing levels.
Management assesses the creditworthiness of its borrowers and estimates the PD on their obligations by applying credit
rating models appropriate to their special characteristics and features, taking into account various historical, current and
forward looking information.
Corporate Lending
All Corporate lending customers are assigned to credit rating grades, which correspond to different levels of credit risk and
relate to different default probabilities. Each rating grade is associated with specific customer relationship policy / guidelines.
Each category of the credit rating scale corresponds either to a specific guideline or policy of the Bank as far as the relationship
with the business borrowers is concerned and is presented in the relevant chapter of the Credit Policy Manual. The rating
scale for business borrowers consists of 18 rating grades (master scale) that correspond to borrowers that have not defaulted
on their contractual obligations. The below table presents, the Group and the Bank’s policy mapped to each rating scale:
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228
GUIDELINES
GUIDELINE OR RATING CREDITWORTHINESS POLICY RULE 1-3 Very Strong Develop relationship 4-7 Strong Develop relationship 8-10 Good Develop relationship based on th e company’s growth Careful d evelopment of the re lat ionship with adequat e collaterals or 11-12 Satisfactory maintain relationsh ip Careful develop ment of th e relations hip or maintain relatio nship with 13-15 Weak unsecured risk les s than 30% POLICY RULES Probable clas sification as wa tch lis t / Limit relationship or Terminate 16-18 Poor relationship
The Group uses distinct credit rating models, according to the type of operations and the size.
More specifically:
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Credit Category Rating System Rating Scale Rating Analyst for Corporate customers that kee p “C” cat egory accounting 18-grade books and hav e a turnover more than € 2.5 million Rating Analyst for Corporate customers that kee p “C” cat egory accounting 18-grade Business Lend ing books and hav e a turnover up to € 2.5 million Small Business Loan Rating for s mall business or personal companies (that keep 18-grade “B” category accoun ting books) Project Finance PD Scorecard 18-grade Object Finance (Shipping) S corecard 18-grade Specialised Lending Real Estate Scorecard 18-grade Manual Ratin g 18-grade
Manual Rating is used for customers for which no other available rating system can be applied. These are customers with no
financial data (i.e. newly established companies, SPVs) or brokerage and insurance companies. In exceptional cases where
the rating does not represent the borrower’s creditworthiness, in the opinion of the Relationship Officers, a manual rating i s
used as a rating override.
Business Rating Models incorporate the following information in order to quantify customer risk:
 Historical financial information that includes realized results, solvency ratios, liquidity ratios and any other relevant
ratios to measure the client's financial performance;
 Any publicly available information on the clients from external parties. This includes credit bureau information;
 Any other objective data on the quality and management capabilities of the Bank-financed company, related to its
performance.
The complexity and granularity of the rating techniques vary depending on the exposure of the Group and the Bank and the
complexity and size of the customer. Behavioral Scorecards are used for small business loans, as well as the agricultural loans.
The Behavioral Scorecards are based exclusively on historical data on customer behavior in relation t o the Bank’s products
and are the result of the implementation of statistical analysis. They are specific to the Bank’s clients and are customized on
a product and delinquency bucket basis.
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These models combine financial and statistical analysis together with the expert judgement of responsible officers. Whenever
possible, these models are tested by benchmarking against externally available information.
Borrowers are rated when their credit limit is initially determined and thereafter at least annually. The ratings are also
updated in cases when information becomes available that may have a significant impact on the level of credit risk.
Retail Lending Scorecards and Rating Models
With regard to the retail credit portfolio, there are scorecards for assessing the creditworthiness of customers in the Retail
Banking portfolio covering different stages of the credit cycle, as follows:
1. Application Scorecards
The Application Scorecards are based exclusively on historical data of applications and behavior and are the result of the
implementation of statistical analysis. They are specific to the Group and the Bank’s clients and are customized on a product
and purpose basis. Thus, there are five products - based application scorecards and three purpose - based application
scorecards in mortgage/ housing loans.
2. Behavioral Scorecards
The Behavioral Scorecards are exclusively based on historical data of client behavior regarding the Bank’s products and are
the result of the implementation of statistical analysis. They are specific to the Bank’s clients and are customized on a pro duct
and days past due basis. There are 8 behavioral scorecards in total.
3. Internal Bureau Scorecard
There is also a scorecard that assesses the market behavior of Group’s and the Bank’s clients at the time of the loan
application. This scorecard is exclusively based on historical data and is also the result of the implementation of statistical
analysis. It is specific to the Group and the Bank’s clients and is not customized on a product basis.
4. Overall Application Scorecards
These are scorecards that are part of the origination process and essentially combine the three scorecards above. Thus, when
a client submits an application, his application score, his behavior score, his bureau score and his Teiresias bureau score are
taken into account. These are five scorecards which are customized on a product - category basis, are based on historical
data of applications and behavior and are the result of the implementation of statistical analysis.
The aforementioned internal models comprise the basic factors which are used as inputs in PD models for the total retail
Banking portfolio and for the business Banking portfolio as well.
5. Credit Bureau Scoring
In addition, the Group and the Bank have used the credit bureau scoring model of Teiresias S.A., which takes into account
the total exposure of borrowers in the Greek market. The use of this particular model has improved the performance of the
existing models.
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The policy used in the approval process to determine the applicant’s willingness and ability of meet their obligations is also
based on a number of credit criteria (in addition to credit scoring models mentioned above), such as:
 Age/Citizenship/Profession
 Minimum Income Level
 Monthly Disposable Income (“MDI”)
 Loan to Income Ratio (“LTI”)
 Credit history of the customer
 Maximum Unsecured Exposure
 Maximum levels of loan-to-value (“LTV”) (for collateralized loans) combined with the purpose of the loan
 Collaterals and Guarantees provided
 Maximum limits per Product
6. Small Business Customer Rating system
The Group and the Bank have developed statistical models to assess the creditworthiness of small business customers. The
Rating model is a combination of 4 traditional modules and an innovative module based on current account cash flow data.
The modules are integrated to arrive at a final model score/rating which is subsequently calibrated to a PD. The five (5)
modules are:
 Borrower Characteristics model
 Financial statements model
 Credit bureau information model
 Behavioural model
 Cash flow model
Macro-economic models
A set of macro-economic models is used for the calculation of forward-looking lifetime PD projections for all portfolios. The
models combine exposure/portfolio idiosyncratic characteristics with projections of specific macro-economic variables to
produce adjustments to the spot obligor/exposure PDs that take into account forward looking conditions. Forward-looking
PDs are used for the purposes of IFRS 9 provision calculation, pricing, ICAAP, stress testing, etc. Moreover, macro-economic
models have been developed for the business portfolio that have as an input the Gross Value Added (“GVA”) macro instead
of the GDP. These models incorporate industry specific sensitivity and produce complementary information for the same
purposes the traditional macro PD models are used for.
Management regularly validates and tests the predictive ability of the creditworthiness evaluation of rating models
(Wholesale and Retail), thus ensuring its potential for accurately depicting credit risk and allowing for the timely
implementation of measures addressing potential problems.
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Recovery based on existing collateral, security and guarantees
Along with the assessment of the counterparties’ creditworthiness rating evaluation and during the process of setting and
reviewing credit limits, Management estimates the recovery rate related to the exposure in the event the debtors default on
their contractual obligations. The estimation of the recovery rate is based on the type of credit as well as the quality of any
collateral / security. According to standard practice, the lower the rating of a borrower, the higher the collateral / security
required, in order to maximize the recovery rate in the event that the borrower defaults on its contractual obligations to the
Group and the Bank.
Exposure at Default (EAD)
EAD is an estimate of the exposure at a future default date, taking into account expected changes in the exposure after the
reporting date. Thus, it is equal to the sum of the on-balance sheet exposure of the account on the observation date and any
additional amounts that are drawn until the date of default. A transformation commonly used is the CCF which is equal to
the ratio of “Balance at default” minus “Balance at observation point” over the undrawn amount at observation point (Limit
at observation – Balance at observation).
Loss Given Default (LGD)
LGD is defined as the ratio of economic loss during the recovery period to the EAD.
LGD is cash flow oriented and all costs are included and properly discounted with the EIR from the recovery date until the
date of default for its computation.
Self-cure rate models
9
are used for the calculation of LGD.
Recoveries are also taken into account and they can be of different types:
 Cash recoveries could be considered cash flows from customer, from guarantor, from cured facilities, from security
(eligible collateral/guarantee), from debt sale.
 Non-cash recoveries could be considered repossessions.
For the complete LGD estimation additional inputs are used:
 Cures via Modification: Cure Rate level of accounts that have changed to non-defaulted status via the
implementation of a Modification.
 Loss given non-cure: Incurred loss from cases that the Group and the Bank have not managed to cure.
 Loss given modification: Incurred losses due to the type of modification that was offered to the client.
Lending Portfolio Quality
The Lending Portfolio is segmented by quality into the following categories for both the retail and corporate portfolios:
9
For Non-retail portfolios the cure rate models include both self-cure rate and via modification probability estimates.
Piraeus Financial Holdings Group – 31 December 2023
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 Strong
- Retail: Stage 1 Loans and advances to customers at amortised cost that are in Bucket 0
- Corporate: Stage 1 Loans and advances to customers at amortised cost that have rating less or equal to 12
 Recommended
- Retail: Stage 1 Loans and advances to customers at amortised cost that are in Bucket 1
- Corporate: Stage 1 Loans and advances to customers at amortised cost that have rating more than 12
 Substandard
- Retail: Stage 2 Loans and advances to customers at amortised cost
- Corporate: Stage 2 Loans and advances to customers at amortised cost
 Default
- Retail: Stage 3 Loans and advances to customers at amortised cost
- Corporate: Stage 3 Loans and advances to customers at amortised cost
Unrated corporate loans that belong to Stage 1 are segmented according to their bucket.
The segmentation presented above is highly correlated with the PD levels of each portfolio (the PD levels differ among the
categories).
Significant increase in Credit Risk (SICR)
The assessment of SICR is a key element in determining the point of transition between the requirement to measure an
allowance based on 12-month ECL or lifetime ECL (excluding POCI financial assets for which are discussed separately below).
If, following this assessment, a SICR occurs, the Group and the Bank recognise a loss allowance which is determined taking
into account all possible default events over the expected life of the financial instrument.
To perform this assessment, the Group and the Bank compare the risk of a default occurring on the financial asset as at the
reporting date, with the risk of a default occurring on the financial asset as at the date of initial recognition.
The Group and the Bank's objective is to capture this SICR prior to the financial asset being treated as credit impaired.
The allocation between stages is based on the criteria presented below:
 If at the reporting date, the loan is in NPE status, it is allocated to Stage 3 and lifetime ECL is calculated.
 If at the reporting date a SICR was monitored against the credit risk at the initial recognition date, the loan is
allocated to Stage 2 and lifetime ECL is calculated.
 The remainder of the loans are allocated to Stage 1 and ECL is calculated for the next 12 months.
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The quantitative and qualitative criteria based on which the Group and the Bank assesse whether there is a SICR for an
exposure are outlined below.
Furthermore, the Group has developed a comprehensive and robust Early Warning System (“EWS”) that promotes the
identification of potential future non-performing obligors at an early stage and supports the adoption of predefined measures
and mitigation / rebalancing actions.
The EWS’ key objectives are the increased visibility around obligor’s c reditworthiness, the reduction of the likelihood of
default through preventive measures, the minimization of EAD and the increase of collateral coverage, in order to safeguard
cost of risk and return on capital. This is achieved through the continuous and effective interaction among all stakeholders
and the timely rebalancing of the obligor’s risk / return relationship to the current risk profile.
The newly introduced EWS consists of models and indicators (quantitative and qualitative / manual) and their respective
thresholds, facilitating the identification of early signs of deterioration of the obligor’s creditworthiness. Credit risk da ta along
with data from other sources such as transactional and current accounts data, were gathered and analyzed for the
development of the early warning models. The quantitative indicators are quantifiable signals based on internal and external
data (e.g. delinquencies in Bank’s products, detrimental events initiated by other lenders, bounced checks) and are enabled
upon occurrence. The qualitative indicators are based mainly on interaction with the obligor and / or non-quantifiable
information that could have a relevant influence on the repayment of a loan. These indicators require manual input in the
Loan Origination System (upon occurrence) and assessment by officers of the competent Business Units and are applicable
for Corporate/ SME obligors.
The process is implemented by dedicated business and credit officers responsible for each obligor.
Corporate and Retail Lending Portfolio
 Primary criteria
- significant increase in the PD of the financial asset at the reporting date compared to the one calculated at the
initial recognition date, based on certain absolute (300-650 bps depending on the portfolio segment) or relative
(200%) thresholds. The aforementioned thresholds are the same as last year.
 Secondary criteria
- existence of forbearance;
- behavioral flags (monitoring the maximum delinquency bucket for the last 12 months);
- existence of default event over the last 12 months based on the Defaulted exposures as the identification of
the latter is based on the EBA NPE Default Definition;
- watch list.
 Backstop
- 30 days past due or more
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 Additional criteria due to high energy prices and inflation
As of December 2023, additional criteria have been considered in order to capture retail exposures’ vulnerability to high
energy prices and inflation.
Criteria for assessing ECL allowance of loans and advances to customers at amortised cost on an individual
or collective basis
Individually Assessed
In order to better assess the expected risk, the Group and the Bank prepare a list of accounts for which an individual
assessment will be performed. Individual assessment is performed for loans and advances to customers at amortised cost
that are individually significant and meet both of the following criteria:
 They are extended to borrowers whose total loan exposure at the period end reporting date exceeded the amount
of € 1 million or the equivalent in foreign currency for the Group and the Bank. Lower thresholds have been
established for the subsidiaries.
 The exposures are classified as NPE as per the Group’s Credit Policy.
Apart from individually significant loans, other exposures may be assessed individually, at the discretion of the Bank’s
Provisioning Committee, irrespective of their exposure level.
Description of the ECL Calculation (Individual)
ECL is defined as the difference between all contractual cash flows that are due in accordance with the contract and all the
cash flows expected to be received (i.e., all cash shortfalls), discounted at the original EIR (or credit-adjusted EIR for POCI
financial assets). All contractual cash flows of the loan and cash flows resulting from the sale of collateral or other credit
enhancements are considered.
According to IFRS 9, probability weighted scenarios are taken into account over the expected life of the financial instrument
in the estimation of the ECL allowance.
The individual assessment consists of an evaluation of the amount and timing of the cash flows for each individual exposure.
Calculation of ECL under the individual assessment is defined as below:
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Where:
 IFRS Outstanding Balance: The gross carrying amount of the lending exposure at the reporting date.
 Present Value of the Recoverable Amount: Quantification of the recoverable amount, based upon the present value
of the expected future cash flows, related either to cash recoveries from the obligor or to cash proceeds from the
liquidation of loans’ collaterals, discounted to their present value at the loan’s original EIR.
Piraeus Financial Holdings Group – 31 December 2023
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 
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: the probability_weight of each scenario, under which the ECL amount is calculated.
Collectively Assessed
The Collective Assessment is applied to all other facilities i.e. those allocated in Stages 1 and 2, as well as to those in Stage 3
which have not been subject to an individual assessment. For the segmentation of the exposures refer to Note 3.1.
Description of the ECL Allowance Calculation (Collective)
For the calculation of the ECL allowance on a collective basis, statistical methods are used, based on credit risk parameters.
The equation used for the measurement of Lifetime ECL, for all portfolios, is depicted below:
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Where:
 Time to Maturity (T): Remaining time until the maturity of the loan.
 Probability of Default (PD): This parameter expresses the PD of a financial instrument. Loans and receivables
classified as Stage 1 are calculated using the 12-month PD, while those classified in Stage 2 are calculated based on
PDs over the life of the facility. For Stage 3, PD=1.
 Loss Given Default (LGD): This parameter defines the "expected" credit loss that arises in the event of default of a
financial instrument. It is expressed as a percentage of the exposure, which if multiplied by the exposure, gives the
amount of the Group and the Bank's loss at the time of the default.
 Exposure at Default (EAD): This parameter defines the exposure value in the event of a default of a financial
instrument. The EAD is based on the following formula:
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 
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 Credit Conversion Factor (CCF): This parameter converts off-balance sheet items, such as undrawn exposures, to
equivalent On-Balance Sheet credit exposures.
 Discount Factor in t (DFt): Factors used to discount an expected loss to a present value at the reporting date (EIR).
 Probability weighted outcome (Pi): the probability-weight of each scenario, under which the ECL amount is
calculated.
The Group and the Bank measure ECL of a financial asset, taking into account multiple possible outcomes. Under the collective
assessment, the Group and the Bank apply three alternative scenarios, with their impact being incorporated in the risk
parameters of the ECL model. Subsequently, the relevant probability weights are applied in the ECL allowance under each
scenario, leading to the probability weighted ECL allowance.
The Economics and Investments Strategy Unit is responsible for the calculation of alternative macroeconomic scenarios,
including the projections of relevant macroeconomic variables and the corresponding probability weights, used in the
Piraeus Financial Holdings Group – 31 December 2023
237
impairment calculation.
Calculation of expected future cash flows for corporate lending portfolio
The following debtors’ specific element are considered for the assessment of future cash flows of corporate lending portfolio:
 Ongoing operating cash flows: The operating cash flows of the obligor or guarantor, which are ongoing and can be
used to service the debt.
 Existing collateral and guarantees: The current value of the obligor’s existing collaterals and guarantees, and their
eligibility for liquidation, are assessed under a forced liquidation scenario or under a voluntary surrender or sale
scenario.
 Binding Repayment or Settlement Agreements: Any additional debt restructuring or settlement agreements made
between the Group and the Bank and the Obligor are also taken into consideration.
 Additional Information received by the Account Officer: Any additional and reliable information available to the
Account Officer regarding the borrower’s ability to meet its contractual obligations to the Group and the Bank is
considered.
 Personal Guarantees of the obligor: In exceptional cases, those mainly involving exposures of prominent customers,
the value of personal guarantees in favor of the obligor may be taken into consideration.
 Special Administration or Reconciliation Process via Art.106, Greek law 3588/2007: Any proceeds anticipated
through the Special Administration or Reconciliation Process via Art.106.
In addition, in line with the ECB’s guidance on how institutions are expected to consider Climate & Environmental risks, the
Group has planned initiatives which are presented in Note 2.2.
Going Concern Approach
Under a “going concern” scenario, the debtor/ guarantor is able to generate cash flows that can be used to repay the financial
debt to all creditors. The Group and the Bank consider different approaches depending on the specific borrower in applying
the going-concern assumption in determining the cash flows to be received from the operations of the borrower, as well as
from the realization of non-core collaterals in cases where applicable:
 The estimated future cash flows based on the updated financial statements of the debtor / guarantor.
 In restructuring cases, the restructuring plans and the resulting changes to the structure of the entity.
 Estimations consider potential investments that are necessary to maintain future cash flows (CAPEX).
 Where cash flows are based on the realisation of the debtor’s assets, the Group an d the Bank estimate the expected
selling price to reflect the future expected cash flows derived from the sale of assets less the estimated costs
associated with the realization. Collateral may be realised to the extent that it does not affect operating cash flows.
In addition, where a “two-step” approach is used (i.e. period by period analysis followed by an estimate of the
terminal value), a “gone concern” approach may also be assumed for the second step, involving the liquidation of
Piraeus Financial Holdings Group – 31 December 2023
238
collaterals.
Based on the previous information, the ECL allowance will be measured as the difference between the asset’s carrying
amount and the estimated future cash flows discounted at the financial asset’s original EIR.
In addition, in line with the ECB’s guidance on how institutions are expected to consider C&E risks, the Group has planned
initiatives which are presented in Note 2.2.
Gone Concern Approach
ECL allowance is measured on a “gone concern” basis when Management determines that the debtor’s operating cash flows
cease and collateral is exercised, including any other collections that Management determines as recoverable.
This could be the case when one or a combination of the below takes place:
 Future operating cash flows of the debtor are estimated to be low or negative; or / and
 Exposure is significantly collateralized, and this asset is central to cash flow generation; or / and
 There is a very significant degree of uncertainty surrounding the estimation of the future cash flows; or / and
 Insufficient information is available to perform a going concern analysis.
The sale proceeds from collateral execution are adjusted for liquidation costs and market discounts where applicable.
Consideration of market valuations, expectation on collateral liquidation strategy (consensual vs. non-consensual forced) and
underlying legal framework is taken in order to determine market price discount that may need to be applied as well as time
to sell assumptions.
Write-offs
The Group and the Bank write off loans and advances when there is no reasonable expectation of recovery of all or part of
the amount due.
Usually this is the case when: i) all necessary legal actions, foreclosure procedures and recovery collection efforts against the
borrower, co-borrowers or guarantors have been exhausted, ii) the continuation of legal proceedings, whether in or out of
court is not likely to result in a positive outcome for the Group and the Bank, iii) the cost of collection is economically
unfavorable in relation to the benefit.
The contractual amount outstanding on loans that were written off during the year ended 31 December 2023 and that are
still subject to enforcement activity is € 73 million (2022: € 148 million).
The Provisioning Committee approves accounting write-offs while the BoD or other authorized bodies approve debt
forgiveness requests.
Debt securities and other short term treasury products
The Group and the Bank recognize impairment allowances on debt securities and other short-term treasury products that
are measured at amortised cost or at FVTOCI.
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The amount of impairment losses depends on the extent of the credit deterioration of the issuer since initial recognition. The
assessment of significant deterioration is key factor in establishing the point of transitioning between the requirement to
measure an allowance based on 12-month ECL and lifetime ECL. The approach of recognizing impairment is based on the
following allocation to Stages:
 Stage 1: Contains instruments that have not deteriorated significantly in credit quality since initial recognition or
have low credit risk at the reporting date.
The Group and the Bank follow the ‘low risk simplification’, according to which, if a financial instrument has low
credit risk, it is assumed that no significant increases in credit risk have occurred. The Group and the Bank consider
that all investment grade instruments are low risk instruments; hence, they are allocated to Stage 1.
At stage 1, 12-month ECL is recognized. For instruments with a residual maturity of less than 12 months, ECL is
calculated for the remaining period until maturity.
 Stage 2: Contains instruments that have deteriorated significantly in credit quality since initial recognition. At Stage
2, lifetime ECL is recognized.
 Stage 3: Contains instruments that have incurred an actual default (impaired). At Stage 3, lifetime ECL is recognized.
For the assessment of significant credit risk deterioration of non-investment grade instruments and the allocation from Stage
1 to Stage 2 (and vice versa), the Group and the Bank rely on the following two (2) independent conditions: a) external credi t
rating downgrade (upgrade) since the recognition date or b) increase (decrease) in the 12-month PD since the recognition
date. In case where an external credit rating is not available, the Group and the Bank use the internal rating evaluation.
As a parallel staging process, the Group and the Bank also monitor the bond market credit singular evolution. Any increase
in credit spreads above an indicative spread threshold since initial recognition, triggers an internal review process of the
affected financial instruments’ current staging, in order to assess if the observed change of the credit spread reflects an actual
change in credit risk expectations.
Default Definition
A debt security or other short-term treasury product is considered as defaulted and consequently allocated to Stage 3, when
it has been assigned a ‘Default’ rating by an external credit rating agency. Furthermore, if the issuer or counterparty has
additional obligations with the Group and the Bank and is in default in one of these obligations, then based on the cross-
contamination rule, the instrument will be assigned to Stage 3.
Expected Credit Loss Estimation
The Group and the Bank use the following key elements to measure ECL for debt securities:
• PD: Can be classified in the following two categories:
- 12-month PD, which corresponds to the estimated PD occurring within the horizon of the next 12 months and is
used to compute 12-month ECL for stage 1 allocation.
- Lifetime PD, which expresses the estimated PD occurring over the remaining life of the financial asset and is used to
Piraeus Financial Holdings Group – 31 December 2023
240
calculate the lifetime ECL for Stage 2 allocation. For stage 3 allocation, PD equal to 100% is used.
 LGD: Defined as the fraction of the total exposure that the Bank estimates not to be able to recover in the case of
default. The LGD assumption depends on the type of the issuer, level of seniority and the presence of collateral.
 EIR: The yield to maturity of the instrument at the time of acquisition.
 EAD: Defined as the total loss that the Bank may incur, from a potential default of the issuer of the financial
instrument. The Bank follows a forward amortizing cost approach to calculate EAD and it is estimated assuming that
future cash flows will not be received and in return, the Bank will receive a recovery amount. EAD is the sum of the
discounted cash flows as at the reporting date, using the EIR.
The Group and the Bank do not utilize any internal models for estimating the PDs, LGDs or any of the staging criteria used for
the ECL calculation of debt securities and other short-term treasury products. As primary methodology for the staging and
ECL calculation, the Bank relies on the assessment of external rating agencies and the published rating-mapped PDs. This
approach assumes a single ‘average’ economic state scenario, which represents the average of all possible outcomes under
different scenarios of macroeconomic conditions.
The assessment of SICR for debt securities is performed through an automated process. Any other assessment relating to
SICR and which leads to different outcome in terms of stage allocation as defined above, will need to be approved by the
Provisioning Committee at each reporting date.
Purchased or originated credit impaired
POCI financial assets are credit-impaired on initial recognition. Unlike credit-impaired financial assets, the corresponding
assessment for POCIs is made at initial recognition rather than in subsequent periods.
For POCI assets, the amortised cost always reflects the lifetime ECL. POCI assets remain in the POCI category for their entire
lifetime and are not assessed for stage allocation or any stage transfers, therefore, any POCI that is no longer credit impaired
as of the end of the reporting period is still presented in this category for classification purposes.
Analysis of inputs to the ECL model under multiple economic scenarios
The Economics and Investments Strategy Unit of the Group produces forecasts for the possible evolution of macroeconomic
variables, such as GDP, unemployment rate, inflation rate, House Price Index and Commercial real estate index that affect
the level of ECL of loan portfolios under multiple economic scenarios. When estimating the ECLs, the Management considers
three (3) scenarios and each of these are associated with different PDs and LGDs (Optimistic – Base – Pessimistic).
Management has assigned the following weights in each scenario: 60% base scenario, 20% optimistic and 20% pessimistic.
When relevant, the assessment of multiple economic scenarios also incorporates how defaulted loans are expected to be
recovered, including the probability that the loans will cure. Further information is presented in Note 3.2.
Multiple scenarios on the allowance
Management assesses and considers the sensitivity of the Group’s ECL allowance on loans and advances to customers at
Piraeus Financial Holdings Group – 31 December 2023
241
amortised cost, against reasonably possible changes in Greece’s real GDP growth, compared to the forward-looking scenarios
utilised in the ECL measurement as of 31 December 2023. The sensitivity analysis was performed assuming a ‘favorable’ and
an ‘adverse’ shift in the three (3) forward-looking scenarios for GDP by 1%, thus affecting the full GDP growth trajectory. A
complete re-estimation of all modelled macroeconomic variables was performed taking under consideration the
aforementioned ‘favorable’ and ‘adverse’ variations of the original forward-looking scenarios, since GDP plays a pivotal role
in the modelling of all other macroeconomic variables.
The following tables include the ECL impact as of 31 December 2023 and 2022, for each of the alternative scenarios assumed.
The impact should be read in the context of the sensitivity analysis as a whole, in conjunction with the narrative disclosure s
provided above.
ECL impact Alternative scenario assumed as at 31/12/2023 (Group) Stage 1 Stage 2 Stage 3 Total Higher GDP (+1%) (6) (10) (8) (24) Lower GDP (-1%) 6 9 7 22 ECL impact Alternative scenario assumed as at 31/12/2022 (Group) Stage 1 Stage 2 Stage 3 Total Higher GDP (+1%) (3) (9) (1 3) (2 5) Lower GDP (-1%) 2 8 10 20
The Company has no loans and advances to customers at amortised cost as at 31 December 2023 and 2022.
4.3 Credit Risk Management
Maximum exposure to credit risk before collateral held or other credit enhancements
The following table represents the maximum credit risk exposure of the Group and the Company as at 31 December 2023
and 2022, without taking account of any collateral held or other credit enhancements attached for those financial assets
which are not subject to IFRS 9 impairment requirements. For on-balance sheet assets, the exposures set out below are based
on net carrying amounts as reported in the Statement of Financial Position.
Piraeus Financial Holdings Group – 31 December 2023
242
Group Company 31/12/202 31/12/202 31/12/202 31/12/202 3 2 3 2 Due from banks (Note 20- as reclas sified) 1,034 1,414 34 45 Derivative financial instruments (Note 21) 191 220 - - Financial assets at FVTPL (Note 22) 576 528 - - Loans and advance s to customers at amortised cost (No te 23) 37,527 37,367 - - Investment securities (Note 24) 12,994 11,640 848 796 Assets held for sale (Note 29) 241 400 - - Other financial assets (Note 30- as reclassified) 1,089 1,125 24 29 Credit commitments (Note 41) 7,762 6,527 - - Total 61,41 4 59,221 906 870
The below tables show the gross amounts of the Group and the Company’s credit exposures, per staging, for financial
instruments at amortised cost or at FVTOCI and other financial assets, as well as off-balance credit exposures.
Group Stage 1 Stage 2 Stage 3 POCI Total 31/12/2023 Collective Individual Collective Individual Due from ban ks 1,034 - - - - - 1,034 Loans and adv ances to cu s tomer s at am ortised cost 33,215 3,346 478 702 492 113 38,346 Retail Lend i ng 5,657 1,835 265 19 337 2 8,115 Mortgages 4,431 1,514 206 16 285 2 6,454 Consumer, P ersonal and Other 900 221 49 3 51 - 1,224 Credit Cards 326 100 11 - 1 - 437 Corporate an d Public Sector L ending 27,558 1,511 212 683 156 111 30,231 Large Corporate 18,915 606 2 379 60 26 19,988 SMEs 7,647 904 210 303 94 85 9,244 Public Sector 996 - - - 2 - 999 Debt securiti es measured at FVTO C I 1,335 - - - - - 1,335 Debt securiti es at amortised cost 11,673 - 7 - - - 11,681 Other asset s - Financial assets 1,011 54 7 212 - - 1,285 Total on bal ance sheet credit ex po sure s 48,268 3,400 492 914 492 113 53,680 Financial guaran tees 5,320 187 172 - - - 5,680 Letters of credi t 121 - - - - - 121 Irrevocable und rawn cre dit commitments 1,920 34 - - 6 - 1,961 Total off bal ance sheet c redit ex posures 7,362 222 172 - 6 - 7,762
Piraeus Financial Holdings Group – 31 December 2023
243
Group Stage 1 Stage 2 Stage 3 POCI Total 31/12/2022 Collective Individual Collective Individual Due from ban ks (as recl assified) 1,415 - - - - - 1,415 Loans and adv ances to cu s tomer s at am ortised cost 31,932 3,797 799 1,478 595 186 38,787 Retail Lend i ng 5,763 2,040 526 47 394 5 8,774 Mortgages 4,551 1,677 306 20 319 5 6,879 Consumer, P ersonal and Other 876 263 172 27 71 - 1,409 Credit Cards 336 99 48 - 3 - 485 Corporate an d Public Sector L ending 26,169 1,757 273 1,431 202 181 30,013 Large Corporate 17,778 536 6 654 67 34 19,076 SMEs 6,776 1,221 267 772 132 147 9,313 Public Sector 1,615 - - 5 2 - 1,623 Debt securiti es measured at FVTO C I 796 - - - - - 796 Debt securiti es at amortised cost 10,867 11 - - - - 10,878 Other asset s - Financial assets (as reclassifi ed) 1,037 52 9 202 - - 1,300 Total on bal ance sheet credit ex po sure s 46,047 3,859 808 1,680 595 187 53,176 Financial guaran tees 4,550 37 202 - - - 4,789 Letters of credi t 114 - - - - - 114 Irrevocable und rawn cre dit commitments 1,536 78 3 - 6 - 1,624 Total off bal ance sheet credit ex po sure s 6,200 116 204 - 6 - 6,527
Company
Stage 1
Stage 2
Stage 3
POCI
Total
31/12/2023
Collective
Individual
Collective
Individual
Due from banks
34
-
-
-
-
-
34
Loans and advances to customers at amortised cost
-
-
-
-
-
-
-
Retail Lending
-
-
-
-
-
-
-
Mortgages
-
-
-
-
-
-
-
Consumer, Personal and Other
-
-
-
-
-
-
-
Credit Cards
-
-
-
-
-
-
-
Corporate and Public Sector Lending
-
-
-
-
-
-
-
Large Corporate
-
-
-
-
-
-
-
SMEs
-
-
-
-
-
-
-
Public Sector
-
-
-
-
-
-
-
Debt securities measured at FVTOCI
-
-
-
-
-
-
-
Debt securities at amortised cost
855
-
-
-
-
-
855
Reverse repos with customers
-
-
-
-
-
-
-
Other assets - Financial assets
20
-
-
4
-
-
24
Total on balance sheet credit exposures
910
-
-
4
-
-
913
Financial guarantees
-
-
-
-
-
-
-
Letters of credit
-
-
-
-
-
-
-
Irrevocable undrawn credit commitments
-
-
-
-
-
-
-
Total off balance sheet credit exposures
-
-
-
-
-
-
-
Piraeus Financial Holdings Group – 31 December 2023
244
Company
Stage 1
Stage 2
Stage 3
POCI
Total
31/12/2022
Collective
Individual
Collective
Individual
Due from banks
45
-
-
-
-
-
45
Loans and advances to customers at amortised cost
-
-
-
-
-
-
-
Retail Lending
-
-
-
-
-
-
-
Mortgages
-
-
-
-
-
-
-
Consumer, Personal and Other
-
-
-
-
-
-
-
Credit Cards
-
-
-
-
-
-
-
Corporate and Public Sector Lending
-
-
-
-
-
-
-
Large Corporate
-
-
-
-
-
-
-
SMEs
-
-
-
-
-
-
-
Public Sector
-
-
-
-
-
-
-
Debt securities measured at FVTOCI
-
-
-
-
-
-
-
Debt securities at amortised cost
819
-
-
-
-
-
819
Reverse repos with customers
-
-
-
-
-
-
-
Other assets - Financial assets
18
-
-
11
-
-
29
Total on balance sheet credit exposures
882
-
-
11
-
-
892
Financial guarantees
-
-
-
-
-
-
-
Letters of credit
-
-
-
-
-
-
-
Irrevocable undrawn credit commitments
-
-
-
-
-
-
-
Total off balance sheet credit exposures
-
-
-
-
-
-
-
4.3.1 Loans and advances to customers at amortised cost
For credit risk management purposes, the Group monitors its credit risk exposure on all acquired loans and advances to
customers at amortised cost on a gross basis, i.e. the EAD is grossed up with the unamortised purchase price allocation
adjustment (the “PPA adjustment”) as at the reporting date.
For the purposes of this disclosure, gross carrying amount is defined as the amortised cost, before adjusting for any loss
allowance, grossed up with the PPA adjustment. Similarly, the ECL allowance for impairment losses presented in the following
tables includes the PPA adjustment. As such, the gross carrying amount and ECL allowance for impairment losses presented
below does not reconcile to Note 23.
The Company has no loans and advances to customers at amortised cost as at 31 December 2023 and 2022.
Loans and advances to customers at amortised cost for the Group as at 31 December 2023 and 2022 are summarised as
follows:
Piraeus Financial Holdings Group – 31 December 2023
245
Group Stage 3 POCI Stage 1 Stage 2 Credit impaired Credit impaired Total 31/12/2023 12-month ECL Lifetime ECL Lifetime ECL Lifetime ECL Mortgages Gross carrying amou nt 4,431 1,514 221 287 6,454 Less: ECL Allowance for impairmen t losses (3) (15) (17) (6) (42) Total Mortgages 4,428 1,499 204 281 6,412 Consumer, Personal and Other l oans Gross carrying amou nt 900 221 52 51 1,224 Less: ECL Allowance for impairmen t losses (7) (22) (27) (5) (61) Total Consumer, Personal and Other loans 892 199 25 46 1,162 Credit Cards Gross carrying amou nt 326 100 11 1 437 Less: ECL Allowance for impairmen t losses (2) (7) (9) - (18) Total Credit Cards 324 93 2 - 419 Retail Lending Gross carrying amou nt 5,657 1,835 284 339 8,115 Less: ECL Allowance for impairmen t losses (12) (44) (53) (12) (122) Total Retail Lending 5,644 1,791 231 327 7,993 Large Corporate Lending Gross carrying amou nt 18,915 606 382 86 19,988 Less: ECL Allowance for impairmen t losses (17) (8) (233) (19) (278) Total Large Corporate Lendi ng 18,897 598 148 67 19,710 SMEs Lending Gross carrying amou nt 7,647 904 513 179 9,244 Less: ECL Allowance for impairmen t losses (18) (53) (283) (64) (419) Total SMEs Lending 7,629 851 230 115 8,825 Public Sector Lending Gross carrying amou nt 996 - 1 2 999 Less: ECL Allowance for impairmen t losses - - (1) - (1) Total Public Sector Lending 996 - - 2 998 Corporate and Public Sector Lendi ng Gross carrying amou nt 27,558 1,511 895 267 30,231 Less: ECL Allowance for impairmen t losses (36) (61) (517) (83) (697) Total Corporate and Publi c Sector Lending 27,523 1,449 378 183 29,534 Loans and advances to cus tomers at amortised cost Gross carrying amou nt 33,215 3,346 1,180 605 38,346 Less: ECL Allowance for impairmen t losses (48) (106) (571) (95) (819) Total Loans and advances to custo me rs at amortised cost 33,167 3,240 609 510 37,527
Piraeus Financial Holdings Group – 31 December 2023
246
Group Stage 3 POCI Stage 1 Stage 2 Credit impaired Credit impaired Total 12-month ECL Lifetime ECL 31/12/2022 Lifetime ECL Lifetime ECL Mortgages Gross carrying amou nt 4,551 1,677 327 324 6,879 Less: ECL Allowance for impairmen t losses (3) (20) (48) (15) (86) Total Mortgages 4,548 1,657 278 309 6,793 Consumer, Personal and Other l oans Gross carrying amou nt 876 263 199 71 1,410 Less: ECL Allowance for impairmen t losses (6) (28) (116) (13) (163) Total Consumer, Personal and Other loans 870 236 83 58 1,247 Credit Cards Gross carrying amou nt 336 99 48 3 485 Less: ECL Allowance for impairmen t losses (1) (5) (41) (3) (50) Total Credit Cards 334 94 6 - 435 Retail Lending Gross carrying amou nt 5,763 2,040 573 399 8,774 Less: ECL Allowance for impairmen t losses (11) (53) (206) (31) (300) Total Retail Lending 5,752 1,987 367 368 8,475 Large Corporate Lending Gross carrying amou nt 17,778 536 660 102 19,076 Less: ECL Allowance for impairmen t losses (12) (5) (325) (20) (363) Total Large Corporate Lendi ng 17,766 531 335 81 18,713 SMEs Lending Gross carrying amou nt 6,776 1,221 1,039 279 9,314 Less: ECL Allowance for impairmen t losses (14) (62) (581) (97) (754) Total SMEs Lending 6,762 1,159 458 182 8,560 Public Sector Lending Gross carrying amou nt 1,615 - 5 2 1,623 Less: ECL Allowance for impairmen t losses - - (4) - (4) Total Public Sector Lending 1,615 - 2 2 1,619 Corporate and Public Sector Lendi ng Gross carrying amou nt 26,169 1,757 1,704 383 30,013 Less: ECL Allowance for impairmen t losses (26) (68) (910) (117) (1,121) Total Corporate and Publi c Sector Lending 26,143 1,689 794 265 28,892 Loans and advances to cus tomers at amortised cost Gross carrying amou nt 31,932 3,797 2,277 782 38,787 Less: ECL Allowance for impairmen t losses (37) (120) (1,115) (148) (1,421) Total Loans and advances to custo me rs at amortised cost 31,895 3,677 1,162 633 37,367
Stage 1 exposures presented under note line “Large corporate lending” include collateralised loan obligations (“CLOs”) with
a gross carrying amount of € 466 million as at 31 December 2023 (31 December 2022: € 502 million). The corresponding ECL
is immaterial for both years. Refer also to Note 23.
Piraeus Financial Holdings Group – 31 December 2023
247
4.3.2 Credit quality per loan portfolio and industry
The tables below present the credit quality per loan portfolio and industry, inclusive of the value of collateral for the Group’s
gross carrying amount of loan and advances to customers at amortised cost as at 31 December 2023 and 2022.
The Group implements guidelines on the eligibility and valuation of collateral value which are described in the Credit Policy
Manual and further explained in note 4.3.3.
The fair value of collateral depicted in the tables below is capped at the gross carrying amount of the loan without application
of a haircut.
Group 31/12/2023 Strong Recommended Substandard Default Total Value of collateral Retail Lending 5,595 62 2,140 318 8,115 6,671 Mortgages 4,395 36 1,772 251 6,454 6,210 Consumer, Personal a nd Other 880 19 268 56 1,224 460 Credit Cards 319 7 100 11 437 1 Corporate Lending 24,623 1,997 1,652 959 29,232 18,355 Large Corporate 17,892 1,045 662 390 19,988 12,717 SMEs 6,731 952 990 570 9,244 5,638 Public Sector 996 0 2 1 999 953 Greece 996 0 2 1 999 953 Total 31,214 2,059 3,795 1,278 38,346 25,979 Group Substandar 31/12/2022 Strong Recommended Default Total Value of collateral d Retail Lending 5,704 59 2,356 655 8,774 7,133 Mortgages 4,517 34 1,939 389 6,879 6,551 Consumer, Personal a nd Other 858 18 317 216 1,410 581 Credit Cards 329 7 100 50 485 1 Corporate Lending 22,630 1,952 1,948 1,860 28,390 18,959 Large Corporate 16,941 839 611 685 19,076 12,849 SMEs 5,689 1,113 1,337 1,175 9,314 6,110 Public Sector 1,609 6 2 5 1,623 1,566 Greece 1,609 6 2 5 1,623 1,566 Total 29,944 2,017 4,306 2,521 38,787 27,658
The value of collateral for large corporate mainly includes the guarantee provided by the Hellenic Republic under the Hellenic
Asset Protection Scheme for the senior notes held by the Bank related to its own securitizations. The respective figure for
2022 has been restated for comparability purposes.
The balance for the Group’s gross carrying amount of loan and advances to customers at amortised cost, where collaterals is
held as at 31 December 2023 is € 31,034 million (31 December 2022: € 32,446 million)
The tables below show the Group’s ageing analysis of past dues and the classification of gross exposures per loan category,
into stages, inclusive of the corresponding value of collateral:
Piraeus Financial Holdings Group – 31 December 2023
248
Group Gross loans and adva nces to customers at a m ortised cost 91-180 181-365 31/12/2023 Current 1-30 days 31-90 days 365+ days Denounced Total Stage 1 Stage 2 Stage 3 POCI Total days days Retail Lend i ng 7,695 172 66 49 43 56 34 8,115 5,657 1,835 284 339 8,115 Mortgages 6,168 100 47 36 37 34 31 6,454 4,431 1,514 221 287 6,454 Consumer, P ersonal and Other 1,117 55 16 10 4 19 3 1,224 900 221 52 51 1,224 Credit Cards 409 17 4 3 1 3 - 437 326 100 11 1 437 Corporate L e nding 26,441 1,981 200 57 30 166 357 29,232 26,562 1,511 895 265 29,232 Large Corporat e 18,309 1,495 101 30 - 38 14 19,988 18,915 606 382 86 19,988 SMEs 8,132 485 99 27 30 127 343 9,244 7,647 904 513 179 9,244 Public Sector 998 - - - - - - 999 996 - 1 2 999 Greece 998 - - - - 1 - 999 996 - 1 2 999 Total 35,134 2,153 266 106 73 223 391 38,346 33,215 3,346 1,180 605 38,346 Value of col l ateral 23,986 1,267 178 94 64 146 244 25,979 22,220 2,578 705 477 25,979
Group Gross loans and adva nces to customers at a m ortised cost 91-180 181-365 31/12/2022 Current 1-30 days 31-90 days 365+ days Denounced Total Stage 1 Stage 2 Stage 3 POCI Total days days Retail Lend i ng 8,080 174 79 69 87 132 155 8,774 5,763 2,040 573 399 8,774 Mortgages 6,501 98 53 48 56 45 78 6,879 4,551 1,677 327 324 6,879 Consumer, P ersonal and Other 1,158 59 22 17 26 61 66 1,410 876 263 199 71 1,410 Credit Cards 420 16 5 3 5 25 11 485 336 99 48 3 485 Corporate L e nding 25,268 1,608 180 32 82 441 780 28,390 24,554 1,757 1,699 381 28,390 Large Corporat e 17,888 809 43 - 58 207 71 19,076 17,778 536 660 102 19,076 SMEs 7,380 798 136 32 25 234 709 9,314 6,776 1,221 1,039 279 9,314 Public Sector 1,617 - - - - - 5 1,623 1,615 - 5 2 1,623 Greece 1,617 - - - - - 5 1,623 1,615 - 5 2 1,623 Total 34,965 1,781 259 102 169 573 939 38,787 31,932 3,797 2,277 782 38,787 Value of col l ateral 25,401 1,108 199 85 117 296 453 27,658 22,839 2,981 1,272 567 27,658
The tables below show the Group’s ECL allowance, per loan category, based on past dues and staging:
Piraeus Financial Holdings Group – 31 December 2023
249
Group ECL allowance for i m pairments on loans and ad vances to customers at a mortised cost 91-180 181-365 31/12/2023 Current 1-30 days 31-90 days 365+ days Denounced Total Stage 1 Stage 2 Stage 3 POCI Total days days Retail Lend i ng 67 10 6 7 3 20 9 122 12 44 53 12 122 Mortgages 29 1 2 2 1 2 6 42 3 15 17 6 42 Consumer, P ersonal and Other 29 7 3 4 1 15 3 61 7 22 27 5 61 Credit Cards 9 2 1 2 1 3 - 18 2 7 9 - 18 Corporate L e nding 279 16 56 18 6 75 247 697 35 61 517 83 697 Large Corporat e 178 10 48 14 - 23 5 278 17 8 233 19 278 SMEs 101 6 7 4 6 52 242 419 18 53 283 64 419 Public Sector - - - - - 1 - 1 - - 1 - 1 Greece - - - - - 1 - 1 - - 1 - 1 Total 346 26 62 25 9 96 256 819 48 106 571 95 819
Group ECL allowance for i m pairments on loans and ad vances to customers at a mortised cost 91-180 181-365 31/12/2022 Current 1-30 days 31-90 days 365+ days Denounced Total Stage 1 Stage 2 Stage 3 POCI Total days days Retail Lend i ng 88 13 9 12 19 77 81 300 11 53 206 31 300 Mortgages 39 2 3 4 4 10 24 86 3 20 48 15 86 Consumer, P ersonal and Other 41 10 5 6 11 43 47 163 6 28 116 13 163 Credit Cards 8 2 1 2 4 23 10 50 1 5 41 3 50 Corporate L e nding 253 16 7 8 50 248 536 1,117 26 68 906 117 1,117 Large Corporat e 153 1 - - 44 118 47 363 12 5 325 20 363 SMEs 100 15 7 8 6 130 488 754 14 62 581 97 754 Public Sector - - - - - - 3 4 - - 4 - 4 Greece - - - - - - 3 4 - - 4 - 4 Total 341 29 16 20 69 325 620 1,421 37 120 1,115 148 1,421
Piraeus Financial Holdings Group – 31 December 2023
250
The tables below present the credit quality per loan portfolio and industry:
Group Gross loans and advances to customers at amortised cost Stage 1 Stage 2 Stage 3 POCI Total 31/12/2023 Collective Individual Collective Individual Retail Lending 5,657 1,835 265 19 337 2 8,115 Corporate and Public Sector Lending 27,558 1,511 212 683 156 111 30,231 Financial corpo r ations 7,485 74 - 3 7 3 7,572 Manufacturing / 3,741 Handicraft 3,210 331 31 143 15 11 Construction 731 58 11 19 10 13 841 Real Estate Companies 809 22 3 129 14 4 981 Project Finance 2,605 4 - - - - 2,609 Wholesale and retail trade 2,972 197 71 80 17 28 3,365 Shipping Co mpanies 2,122 146 - - - - 2,269 Coastline / Ferrie s 116 Companies 115 1 - - - - Hotels 2,086 381 6 41 52 17 2,583 Agriculture 511 43 32 19 6 - 610 Energy 1,148 22 1 4 14 11 1,201 Transports 710 and Logistics 577 22 9 101 2 - Other industries 2,191 209 49 144 17 24 2,635 Public sector 996 - - - 2 - 999 Total 33,215 3,346 478 702 492 113 38,346
Piraeus Financial Holdings Group – 31 December 2023
251
Group Gross loans and advances to customers at amortised cost Stage 1 Stage 2 Stage 3 POCI Total 31/12/2022 Collective Individual Collective Individual Retail Lending 5,763 2,040 526 47 393 6 8,774 Corporate and Public Sector Lending 26,169 1,757 273 1,431 202 181 30,013 Financial corpo r ations 7,280 39 2 11 7 3 7,344 Manufacturing/ 3,388 325 45 231 21 22 4,032 Handicraft Construction 539 225 25 99 12 13 914 Real Estate Companies 770 35 3 247 15 22 1,093 Project Finance 2,182 5 1 9 - - 2,198 Wholesale and retail trade 2,563 351 84 223 25 27 3,272 Shipping Co mpanies 2,141 62 2 2 - - 2,206 Coastline/ Ferrie s 124 - - 99 - - 223 Companies Hotels 1,772 296 10 172 67 27 2,345 Agriculture 493 34 23 20 7 - 577 Energy 854 25 2 30 15 12 938 Transports 456 97 13 142 2 - 709 and Logistics Other industries 1,991 260 63 140 29 55 2,539 Public sector 1,615 - - 5 2 - 1,623 Total 31,932 3,797 799 1,478 595 187 38,787
Piraeus Financial Holdings Group – 31 December 2023
252
Group ECL allowance for impairments on loan s and advances to customers at amortised cost Stage 1 Stage 2 Stage 3 POCI Total 31/12/2023 Collective Individual Collective Individual Retail Lending 12 44 48 5 12 - 122 Corporate and Public Sector Lending 36 61 84 433 13 70 697 Financial corpo r ations 4 - - 3 - 3 11 Manufacturing / 4 14 12 75 3 8 116 Handicraft Construction 2 5 5 11 2 9 34 Real Estate Companies - 1 - 81 - 1 84 Project Finance 2 - - - - - 3 Wholesale and retail trade 6 17 31 51 3 17 125 Shipping Co mpanies 1 1 - - - - 2 Coastline / Ferrie s - - - - - - - Companies Hotels 3 3 1 30 1 4 41 Agriculture 4 5 10 13 - - 31 Energy 4 1 - 2 1 7 15 Transports 1 2 4 87 - - 95 and Logistics Other industries 5 12 19 82 2 21 140 Public sector - - - - - - 1 Total 48 106 132 439 24 71 819
Piraeus Financial Holdings Group – 31 December 2023
253
Group ECL allowance for impairments on loan s and advances to customers at amortised cost Stage 1 Stage 2 Stage 3 POCI Total 31/12/2022 Collective Individual Collective Individual Retail Lending 11 53 177 28 30 1 300 Corporate and Public Sector Lending 26 68 120 790 24 94 1,121 Financial corpo r ations 2 - 2 11 - 2 18 Manufacturing/ 3 13 19 102 5 11 154 Handicraft Construction 1 7 13 61 2 8 92 Real Estate Companies 1 1 1 110 - 11 125 Project Finance 2 1 - 7 - - 11 Wholesale and retail trade 4 22 39 156 6 14 242 Shipping Co mpanies 1 - 1 1 - - 3 Coastline/ Ferrie s - - - 67 - - 67 Companies Hotels 2 3 3 38 1 3 48 Agriculture 1 3 8 9 1 - 23 Energy 4 2 1 20 1 5 34 Transports 1 2 6 108 1 - 118 and Logistics Other industries 4 12 27 95 6 39 183 Public sector - - - 3 - - 4 Total 37 120 298 818 54 95 1,421
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Group Loans and advances to customers at amortised cost Stage 1 Stage 2 Stage 3 POCI Total 31/12/2023 Collective Individual Collective Individual Retail Lending 5,644 1,791 217 14 325 2 7,993 Corporate and Public Sector Lending 27,523 1,449 129 250 143 41 29,534 Financial corpo r ations 7,481 74 - - 6 - 7,561 Manufacturing / 3,205 317 19 68 13 3 3,625 Handicraft Construction 729 53 6 8 8 3 807 Real Estate Companies 809 21 2 48 14 3 897 Project Finance 2,602 4 - - - - 2,606 Wholesale and retail trade 2,966 180 40 30 13 11 3,240 Shipping Co mpanies 2,122 145 - - - - 2,267 Coastline / Ferrie s Companies 115 1 - - - - 116 Hotels 2,083 378 5 12 51 13 2,542 Agriculture 507 38 21 6 6 - 578 Energy 1,144 21 - 2 13 4 1,185 Transports 576 20 5 14 1 - 616 and Logistics Other industries 2,186 197 31 62 15 3 2,495 Public sector 996 - - - 2 - 998 Total 33,167 3,240 346 263 468 42 37,527
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Group Loans and advances to customers at amortised cost Stage 1 Stage 2 Stage 3 POCI Total 31/12/2022 Collective Individual Collective Individual Retail Lending 5,752 1,987 349 19 363 4 8,475 Corporate and Public Sector Lending 26,143 1,689 153 642 178 88 28,892 Financial corpo r ations 7,278 39 1 - 7 1 7,326 Manufacturing / 3,385 312 26 129 16 11 3,878 Handicraft Construction 538 218 13 38 10 5 822 Real Estate Companies 769 34 2 137 14 11 968 Project Finance 2,180 4 1 2 - - 2,187 Wholesale and retail trade 2,558 330 45 67 18 13 3,031 Shipping Co mpanies 2,140 62 - 1 - - 2,204 Coastline / Ferrie s Companies 124 - - 32 - - 156 Hotels 1,771 294 8 135 66 24 2,297 Agriculture 492 31 14 11 6 - 554 Energy 850 23 1 10 14 6 904 Transports 455 95 7 33 1 - 591 and Logistics Other industries 1,987 248 36 45 23 16 2,355 Public sector 1,615 - - 1 2 - 1,619 Total 31,895 3,677 501 660 541 92 37,367
The tables that follow show the credit quality, per staging, of each loan category of the Group as at 31 December 2023 and
2022, inclusive of the value of collaterals.
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Mortgages
Group Mortgages - Internal rating grade 31/12/2023 Stage 1 Stage 2 Stage 3 POCI Total Strong 4,395 - - - 4,395 Recommended 36 - - - 36 Substandard - 1,514 - 258 1,772 Default - - 221 29 251 Total Gross Bal ance 4,431 1,514 221 287 6,454 Strong 3 - - - 3 Recommended - - - - - Substandard - 15 - 2 18 Default - - 17 4 21 Total ECL Allowance 3 15 17 6 42 Total Balance 4,428 1,499 204 281 6,412 Value of collateral 4,283 1,447 212 269 6,210
Group Mortgages - Internal rating grade 31/12/2022 Stage 1 Stage 2 Stage 3 POCI Total Strong 4,517 - - - 4,517 Recommended 34 - - - 34 Substandard - 1,677 - 262 1,939 Default - - 327 62 389 Total Gross Bal ance 4,551 1,677 327 324 6,879 Strong 3 - - - 3 Recommended - - - - - Substandard - 20 - 3 22 Default - - 48 13 61 Total ECL Allowance 3 20 48 15 86 Total Balance 4,548 1,657 278 309 6,793 Value of collateral 4,378 1,586 290 298 6,551
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Consumer, Personal and Other Lending
Group Consumer, Personal and Other Lending - Internal rating grade 31/12/2023 Stage 1 Stage 2 Stage 3 POCI Total Strong 880 - - - 880 Recommended 19 - - - 19 Substandard - 221 - 47 268 Default - - 52 4 56 Total Gross Bal ance 900 221 52 51 1,224 Strong 7 - - - 7 Recommended - - - - - Substandard - 22 - 4 26 Default - - 27 1 28 Total ECL Allowance 7 22 27 5 61 Total Balance 892 199 25 46 1,162 Value of collateral 342 73 18 27 460
Group Consumer, Personal and Other Lending - Internal rating grade 31/12/2022 Stage 1 Stage 2 Stage 3 POCI Total Strong 858 - - - 858 Recommended 18 - - - 18 Substandard - 263 - 54 317 Default - - 199 18 216 Total Gross Bal ance 876 263 199 71 1,410 Strong 6 - - - 6 Recommended - - - - - Substandard - 28 - 5 33 Default - - 116 8 124 Total ECL Allowance 6 28 116 13 163 Total Balance 870 236 83 58 1,247 Value of collateral 403 95 50 33 581
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Credit Cards
Group Credit Cards - Internal rating grade 31/12/2023 Stage 1 Stage 2 Stage 3 POCI Total Strong 319 - - - 319 Recommended 7 - - - 7 Substandard - 100 - - 100 Default - - 11 - 11 Total Gross Bal ance 326 100 11 1 437 Strong 1 - - - 1 Recommended - - - - - Substandard - 7 - - 7 Default - - 9 - 9 Total ECL Allowance 2 7 9 - 18 Total Balance 324 93 2 1 419 Value of collateral 1 - - - 1
Group Credit Cards - Internal rating grade 31/12/2022 Stage 1 Stage 2 Stage 3 POCI Total Strong 329 - - - 329 Recommended 7 - - - 7 Substandard - 99 - - 100 Default - - 48 3 50 Total Gross Bal ance 336 99 48 3 485 Strong 1 - - - 1 Recommended - - - - - Substandard - 5 - - 5 Default - - 41 3 44 Total ECL Allowance 1 5 41 3 50 Total Balance 334 94 6 - 435 Value of collateral 1 - - - 1
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Large Corporate
Group Large Corporate - Internal rating grade 31/12/2023 Stage 1 Stage 2 Stage 3 POCI Total Strong 17,892 - - - 17,892 Recommended 1,023 22 - - 1,045 Substandard - 584 18 60 662 Default - - 364 26 390 Total Gross Bal ance 18,915 606 382 86 19,988 Strong 13 - - - 13 Recommended 4 - - - 4 Substandard - 8 2 1 11 Default - - 232 18 250 Total ECL Allowance 17 8 233 19 278 Total Balance 18,897 598 148 67 19,710 Value of collateral 12,113 421 132 51 12,717
Group Large Corporate - Internal rating grade 31/12/2022 Stage 1 Stage 2 Stage 3 POCI Total Strong 16,941 - - - 16,941 Recommended 837 2 - - 839 Substandard - 534 10 67 611 Default - - 650 35 685 Total Gross Bal ance 17,778 536 660 102 19,076 Strong 9 - - - 9 Recommended 3 - - - 3 Substandard - 5 - 2 7 Default - - 325 19 344 Total ECL Allowance 12 5 325 20 363 Total Balance 17,766 531 335 81 18,713 Value of collateral 12,044 391 355 60 12,849
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SME
Group SME - Internal rating grade 31/12/2023 Stage 1 Stage 2 Stage 3 POCI Total Strong 6,731 - - - 6,731 Recommended 916 36 - - 952 Substandard - 868 34 88 990 Default - - 479 91 570 Total Gross Bal ance 7,647 904 513 179 9,244 Strong 16 - - - 16 Recommended 3 - - - 3 Substandard - 53 33 2 87 Default - - 250 62 313 Total ECL Allowance 18 53 283 64 419 Total Balance 7,629 851 230 115 8,825 Value of collateral 4,529 637 342 130 5,638
Group SME - Internal rating grade 31/12/2022 Stage 1 Stage 2 Stage 3 POCI Total Strong 5,689 - - - 5,689 Recommended 1,086 27 - - 1,113 Substandard - 1,194 37 106 1,337 Default - - 1,002 173 1,175 Total Gross Bal ance 6,776 1,221 1,039 279 9,314 Strong 10 - - - 10 Recommended 4 - - - 4 Substandard - 62 33 2 98 Default - - 547 95 642 Total ECL Allowance 14 62 581 97 754 Total Balance 6,762 1,159 458 182 8,560 Value of collateral 4,452 909 573 177 6,110
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Public Sector
Group Public Sector - Internal rating grade 31/12/2023 Stage 1 Stage 2 Stage 3 POCI Total Strong 996 - - - 996 Recommended - - - - - Substandard - - - 2 2 Default - - 1 - 1 Total Gross Bal ance 996 - 1 2 999 Strong - - - - - Recommended - - - - - Substandard - - - - - Default - - 1 - 1 Total ECL Allowance - - 1 - 1 Total Balance 996 - - 2 998 Value of collateral 953 - - - 953
Group Public Sector - Internal rating grade 31/12/2022 Stage 1 Stage 2 Stage 3 POCI Total Strong 1,609 - - - 1,609 Recommended 6 - - - 6 Substandard - - - 2 2 Default - - 5 - 5 Total Gross Bal ance 1,615 - 5 2 1,623 Strong - - - - - Recommended - - - - - Substandard - - - - - Default - - 4 - 4 Total ECL Allowance - - 4 - 4 Total Balance 1,615 - 2 2 1,619 Value of collateral 1,562 - 4 - 1,566
As at 31 December 2023 and 2022 the Group has not granted any Public Sector lending outside Greece.
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An analysis of changes in the gross carrying amount and the corresponding ECL allowance for impairment losses in relation
to the Group’s Retail lending portfolio for 2023 is as follows:
Retail Lending - Movement in gross carrying amounts Group Stage 1 Stage 2 Stage 3 POCI Total Gross carrying amount as at 1/1/2023 5,763 2,040 573 399 8,775 Transfer (to) / from Held for Sale (6) (23) (367) (58) (455) New assets originated o r purchased 472 23 - - 495 Other debits to the Gross Balance / (Repayments) (849) (308) (7) (20) (1,183) Assets sold - - - - - Assets derecogni sed (excluding write offs) - - - - - Transferred from Stage 1 to Stage 2 (1,022) 1,022 - Transferred from Stage 1 to Stage 3 (18) 18 - Transferred from Stage 2 to Stage 1 975 (975) - Transferred from Stage 2 to Stage 3 (157) 157 - Transferred from Stage 3 to Stage 1 - - - Transferred from Stage 3 to Stage 2 98 (98) - Change in the present value of the allo wance 321 105 26 17 469 Write-off of interest recog nised from change in the present value of the al lowance - - (8) (1) (9) Write-offs (1) (1) (10) - (12) FX differences and othe r movements 21 10 2 2 35 Gross carrying amount as at 31/12/2023 5,657 1,835 284 339 8,115
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Retail Lending - Movement in ECL allowanc e Group Stage 1 Stage 2 Stage 3 POCI Total ECL allowance as at 1/1/2023 11 53 205 31 299 Transfer (to) / from Held fo r Sale - (2) (167) (20) (189) Transferred from Stage 1 to Stage 2 (6) 6 - Transferred from Stage 1 to Stage 3 - - - Transferred from Stage 2 to Stage 1 19 (19) - Transferred from Stage 2 to Stage 3 (12) 12 - Transferred from Stage 3 to Stage 1 - - - Transferred from Stage 3 to Stage 2 17 (17) - ECL impairment charge / (release) for the year (P&L) (11) (1) 28 (12) 5 ECL impairment charge for new fin ancial assets originated o r purchased (P&L) - - - - - Recoveries of amoun t s previously written-off (P&L) - - - - - Change in the present value of the allo wance - - 9 1 10 Write-off of interest recog nised from change in the present value of the al lowance - - (8) (1) (9) Write-offs (1) (1) (10) (0) (12) Financial assets dereco gnised - - - - - Disposals of loans an d advances - - - - - FX differences and othe r movements 1 3 1 12 16 ECL allowance as at 31/12/2023 12 44 53 12 121
An analysis of changes in the gross carrying amount and the corresponding ECL allowance for impairment losses in relation
to the Group’s Retail lending portfolio for 2022 is as follows:
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Retail Lending - Movement in gross carrying amounts Group Stage 1 Stage 2 Stage 3 POCI Total Gross carrying amount as at 1/1/2022 5,806 2,271 676 436 9,189 Transfer (to) / from Held fo r Sale (1) (2) (120) (23) (146) New assets originated o r purchased 609 37 - 4 649 Other debits to the Gross Balance / (Repayments) (902) (258) (42) (22) (1,224) Assets sold - - - - - Assets derecogni sed (excluding write offs) - - - - - Transferred from Stage 1 to Stage 2 (1,115) 1,115 - Transferred from Stage 1 to Stage 3 (14) 14 - Transferred from Stage 2 to Stage 1 1,177 (1,177) - Transferred from Stage 2 to Stage 3 (240) 240 - Transferred from Stage 3 to Stage 1 - - - Transferred from Stage 3 to Stage 2 206 (206) - Change in the present value of the allo wance 206 78 21 11 316 Write-off of interest recog nised from change in the present value of the al lowance - - (8) (1) (9) Write-offs (11) (1) (3) (8) (23) FX differences and othe r movements 9 10 2 2 22 Gross carrying amount as at 31/12/2022 5,763 2,040 573 399 8,775
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Retail Lending - Movement in ECL allowanc e Group Stage 1 Stage 2 Stage 3 POCI Total ECL allowance as at 1/1/2022 21 60 177 36 295 Transfer (to) / from Held fo r Sale - (1) (67) (13) (82) Transferred from Stage 1 to Stage 2 (3) 3 - Transferred from Stage 1 to Stage 3 - - - Transferred from Stage 2 to Stage 1 24 (24) - Transferred from Stage 2 to Stage 3 (20) 20 - Transferred from Stage 3 to Stage 1 - - - Transferred from Stage 3 to Stage 2 27 (27) - ECL impairment charge / (release) for the year (P&L) (26) - 72 (1) 46 ECL impairment charge for new fin ancial assets originated or purchased (P&L) - - - - - Recoveries of amoun t s previously written-off (P&L) - - - - - Change in the present value of the allo wance - - 9 1 10 Write-off of interest recog nised from change in the present value of the al lowance - - (8) (1) (9) Write-offs (11) (1) (3) (8) (23) Financial assets dereco gnised - - - - - Disposals of loans an d advances - - - - - FX differences and othe r movements 6 8 34 15 63 ECL allowance as at 31/12/2022 11 53 205 31 299
An analysis of changes in the gross carrying amount and the corresponding ECL allowance for impairment losses in relation
to the Group’s Corporate and Public sector lending portfolio for 2023 is as follows:
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Corporate and Public Sector Lendin g - M ovement in gross carrying amounts Group Stage 1 Stage 2 Stage 3 POCI Total Gross carrying amount as at 1/1/2023 26,169 1,757 1,704 383 30,013 Transfer (to) / from Held fo r Sale (37) (1) (295) (42) (375) Intercompany loan s (recognized) / derecognized due to change in Gro up’s perimeter - - (89) - (89) New assets originated o r purchased 5,569 107 12 - 5,688 Other debits to the Gross Balance / (Repayments) (3,287) (456) (156) (65) (3,963) Assets sold (50) - (42) (11) (102) Assets derecogni sed (excluding write offs) (1,656) (8) - - (1,664) Transferred from Stage 1 to Stage 2 (1,363) 1,363 - Transferred from Stage 1 to Stage 3 (209) 209 - Transferred from Stage 2 to Stage 1 1,469 (1,469) - Transferred from Stage 2 to Stage 3 (62) 62 - Transferred from Stage 3 to Stage 1 2 (2) - Transferred from Stage 3 to Stage 2 191 (191) - Debt for equity exch ange - - (12) - (12) Change in the present value of the allo wance 1,026 97 78 21 1,222 Write-off of interest recog nised from change in the present value of the al lowance - - (44) (8) (53) Write-offs (1) (1) (333) (13) (347) FX differences and othe r movements (76) (7) (5) 1 (86) Gross carrying amount as at 31/12/2023 27,558 1,511 896 267 30,231
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Corporate and Public Sector Lendin g - M ovement in ECL allowance Group Stage 1 Stage 2 Stage 3 POCI Total ECL allowance as at 1/1/2023 26 68 910 117 1,121 Transfer (to) / from Held fo r Sale - - (185) (25) (210) Intercompany loan s (recognized) / derecog nized due to change in Gro up’s perimeter - - - Transferred from Stage 1 to Stage 2 (4) 4 - Transferred from Stage 1 to Stage 3 (2) 2 - Transferred from Stage 2 to Stage 1 18 (18) - Transferred from Stage 2 to Stage 3 (6) 6 - Transferred from Stage 3 to Stage 1 - - - Transferred from Stage 3 to Stage 2 13 (13) - ECL impairment charge / (release) for the year (P&L) (10) 1 408 7 407 ECL impairment charge for new fin ancial assets originated o r purchased (P&L) - 1 - - 1 Recoveries of amoun t s previously written-off (P&L) - - (9) - (9) Change in the present value of the allo wance - - 44 8 52 Write-off of interest recog nised from change in the present value of the al lowance - (44) (8) (53) Write-offs (1) (1) (333) (13) (347) Financial assets dereco gnised (12) - (1) - (13) Disposals of loans an d advances - - (9) (6) (15) Changes to contractual cash flows due to modifications no t resulting in derecognition 2 - - - 2 Debt for equity exch ange - - - - - FX differences and othe r movements 18 1 (259) 2 (238) ECL allowance as at 31/12/2023 35 61 517 83 697
Regarding the movement in gross carrying amounts the “transfer to / from assets held for sale” of € 830 million (€ 455
million in Retail and € 375 million in Corporate & Public Sector) refers to Senna, Delta, Monza and Wheel II portfolios.
Regarding the movement in ECL allowance, line item “transfer (to) / from assets held for sale” of € 399 million (€ 189 million
in Retail and € 210 million in Corporate & Public Sector) refers to Senna, Delta and Monza portfolios. Amount of € 262
million in line item “ECL impairment charge/ (release) for the year (P&L)” relates mainly to the ECL recognised during the
year upon classification of the aforementioned portfolios as HFS. Accordingly, the respective ECL related to the said HFS
portfolios is deducted from line item “FX differences and other movements”. Refer to Note 29 for further information of
the aforementioned portfolios.
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An analysis of changes in the gross carrying amount and the corresponding ECL allowance for impairment losses in relation
to the Group’s Corporate and Public sector lending portfolio for 2022 is as follows:
Corporate and Public Sector Lendin g - M ovement in gross carrying amounts Group Stage 1 Stage 2 Stage 3 POCI Total Gross carrying amount as at 1/1/2022 22,202 2,855 3,666 580 29,303 Transfer (to) / from Held fo r Sale (2) 30 (610) (121) (704) Intercompany loan s (recognized) / derecognized due to change in Gro up’s perimeter (75) - 5 - (70) Contribution to Associates - - (421) - (421) New assets originated o r purchased 6,864 166 35 5 7,069 Other debits to the Gross Balance / (Repayments) (3,585) (581) (314) (72) (4,551) Assets sold - - (62) (2) (64) Assets derecogni sed (excluding write offs) (830) - (4) - (834) Transferred from Stage 1 to Stage 2 (1,708) 1,708 - Transferred from Stage 1 to Stage 3 (32) 32 - Transferred from Stage 2 to Stage 1 2,715 (2,715) - Transferred from Stage 2 to Stage 3 (116) 116 - Transferred from Stage 3 to Stage 1 60 (60) - Transferred from Stage 3 to Stage 2 328 (328) - Debt for equity exch ange - - (44) - (44) Change in the present value of the allo wance 569 85 94 23 771 Write-off of interest recog nised from change in the present value of the al lowance - (2) (56) (13) (71) Write-offs - - (380) (19) (399) FX differences and othe r movements (7) (2) 35 1 28 Gross carrying amount as at 31/12/2022 26,169 1,757 1,704 383 30,013
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Corporate and Public Sector Lendin g - M ovement in ECL allowance Group Stage 1 Stage 2 Stage 3 POCI Total ECL allowance as at 1/1/2022 69 115 1,330 160 1,675 Transfer (to) / from Held for Sale (1) 15 (295) (71) (351) Intercompany loan s (recognized) / derecog nized due to change in Gro up’s perimeter 2 2 Contribution to Associates (92) (92) Transferred from Stage 1 to Stage 2 (11) 11 - Transferred from Stage 1 to Stage 3 - - - Transferred from Stage 2 to Stage 1 63 (63) - Transferred from Stage 2 to Stage 3 (13) 13 - Transferred from Stage 3 to Stage 1 - - - Transferred from Stage 3 to Stage 2 30 (30) - ECL impairment charge / (release) for the year (P&L) (135) (32) 564 41 437 ECL impairment charge for new fin ancial assets originated or purchased (P&L) 1 - - - 1 Recoveries of amoun t s previously written-off (P&L) - - (12) - (12) Change in the present value of the allowance - 1 31 9 41 Write-off of interest recog nised from change in the present value o f the allowance - (2) (56) (13) (71) Write-offs - - (380) (19) (399) Financial assets dereco gniz ed (2) - - - (2) Disposals of loans an d advances - - - (1) (1) Changes to contractual cash flows due to modi f ications not resulting i n derecognition - - 1 - 1 Debt for equity exch ange - - (15) - (15) FX differences and othe r movements 44 5 (153) 12 (93) ECL allowance as at 31/12/2022 26 68 910 117 1,121
The table below presents the impact from the modification of contractual terms for Group loans and advances to customers
measured on lifetime ECL at the end of 31 December 2023 and 2022:
31/12/2023 31/12/2022 Gross modification impact befo re reversal of ECL allowance (A) 1 (3) Reversal of ECL allowance (B) (20) (1 6) Net modification impact in Inco m e Statement (A+B) (19) (1 9) Gross carrying amount of loa ns before modification 708 1,267
The gross carrying amount of modified loans initially ECL measured using lifetime ECL (Stage 3 and Stage 2) and currently
measured using 12 month ECL (Stage 1) as at 31 December 2023 amounted to € 334 million (31 December 2022: € 208
million).
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4.3.3 Collateral and other credit enhancements
Along with the evaluation of the creditworthiness of counterparties, the Group estimates the recovery rate against
exposures, when limits are set or reviewed. This estimation is based on the type of debt claim and the existence of any
connected collaterals and/or guarantees.
According to standard practice, when a borrower’s credit rating is l ow, then even stronger collaterals / guarantees are
requested, in order to secure a higher recovery rate to account for the borrowers’ default probability.
The Group has defined categories of acceptable collateral and it has incorporated them in the credit policy. Main types of
acceptable collateral are the following:
 Pledged deposits and cheques;
 Mortgages on real estate property;
 Ship mortgages;
 Greek government guarantees;
 Bank letters of guarantee;
 Guarantees by Development Bodies (i.e. the Hellenic Fund for Entrepreneurship & Development S.A);
 Pledged financial instruments such as mutual fund shares, stocks, bonds, T-bills and receivables.
The collateral / security associated with a credit facility is initially evaluated during the credit approval process, based on
their current value or fair value and it is re-evaluated at regular intervals. Collaterals or guarantees are not usually received
against exposures to financial institutions.
Market value assessment of properties, which may secure any type of credit facilities towards individuals or legal entities,
is performed by external certified independent valuers. The valuations are categorized into individual valuations on a
specific property either on-site or desktop and indexed valuations performed with statistical methodology (e.g. Propindex,
BoG Indexes etc.) or any other automated processes.
The Group accepts the following key valuation methodologies provided by International Valuation Standards (IVS):
a) Market approach or comparative method
b) Income approach
c) Cost Approach
The initial valuations of mortgaged properties are always performed on-site (physical inspection).
The Group and the Company update the valuations (either with individual valuations or statistical methods) for the
collateral of all exposures (irrespective of their classification as PE / NPE) at least annually.
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Furthermore, the revaluation of the immovable property is updated on an individual basis, at the time the exposure is
classified as NPE and at least annually (either through individual evaluations or statistical methods), while it continues to
be classified as such.
The Group, according to the credit policy manual is constantly monitoring the changes in the market conditions in the real
estate market, either internally, through macroeconomic reports of the Group’s Chief Economist, or externally through
reports produced by prestigious independent valuation firms. Changes in market conditions are considered as an important
factor in determining the market value of a real estate property. More volatile real estate market conditions may lead to a
higher evaluation frequency.
The Group may also obtain corporate guarantees from parent companies for loans and advances granted to its subsidiaries.
Group Fair value of collateral and credit enhancements held u nder the base scenario Type of collateral or credit enhancement 31/12/2023 Real estate Financial Total value of Guarantees Other collateral collateral collateral collateral received Loans and advance s to customers at 14,132 1,707 10,140 25,979 3,881 amortised cost Mortgages 6,104 66 41 6,210 - Consumer, Personal and Other 271 82 107 460 - Credit Cards - 1 - 1 - Large Corporate 4,820 1,046 6,851 12,717 1,485 SMEs 2,936 512 2,190 5,638 2,395 Public Sector 1 1 952 953 - Total financial as sets at amortised cost 14,132 1,707 10,140 25,979 3,881 Derivative financial instruments - 294 - 294 - Total financial i nstrument s at FVTPL - 294 - 294 - Financial guarante es 129 159 98 385 1,098 Letters of credit - 1 - 1 4 Irrevocable und r awn credit commitments 572 22 144 738 1,6 63 Total 701 181 242 1,124 2,7 65
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272
Group Fair value of collateral and credit enhancements held u nder the base scenario Type of collateral or credit enhancement 31/12/2022 Real estate Financial Total value of Guarantees Other collateral collateral collateral collateral received Loans and advance s to customers at amortised cost 14,899 1,427 11,333 27,658 3,449 Mortgages 6,426 70 56 6,551 - Consumer, Personal and Other 350 78 153 581 - Credit Cards - 1 - 1 - Large Corporate 5,018 853 6,979 12,849 1,453 SMEs 3,105 425 2,580 6,110 1,996 Public Sector 1 1 1,565 1,566 - Total financial as sets at amortised cost 14,899 1,427 11,333 27,658 3,449 Derivative financial instruments - 635 - 635 - Total financial i nstrument s at FVTPL - 635 - 635 - Financial guarante es 126 120 86 333 1,046 Letters of credit - 1 - 1 2 Irrevocable und r awn credit commitments 595 31 37 663 1,464 Total 721 152 123 996 2,512
The tables below provide the fair value of collaterals held and credit enhancements (r efer to Note 4.3.2 for further information)
for Stage 3 loans and advances to customers at amortised cost. Depending on the level of collateral some Stage 3 loans and
advances to customers at amortised cost may not have individual ECL when the expected value of the collateral is greater
than loan’s carrying amount, even if the future value of collateral is forecasted using multiple economic scenarios.
Fair value of collateral and credit enhancements of S tage 3 loans and advances to customers Group at amortised cost held under the base scenario Type of collateral or credit enhancement 31/12/2023 Real estate Financial Other Total value of Guarantees Associated collateral collateral collateral collateral received ECL Loans and advance s to customers at 515 11 178 705 153 571 amortised cost Mortgages 209 1 2 212 - 17 Consumer, Personal and Other 15 - 2 18 - 27 Credit Cards - - - - - 9 Large Corporate 106 8 18 132 88 233 SMEs 184 2 156 342 66 283 Public Sector - - - - - 1 Total loans and a dvances to 515 11 178 705 153 571 customers at amortised cost Financial guarante es 4 2 9 15 69 69 Letters of credit - - - - - - Total 4 2 9 15 69 69
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Fair value of collateral and credit enhancements of S tage 3 loans and advances to customers Group at amortised cost held under the base scenario Type of collateral or credit enhancement 31/12/2022 Real estate Financial Other Total value of Guarantees Associated collateral collateral collateral collateral received ECL Loans and advance s to customers at amortised cost 1,066 17 189 1,271 322 1,115 Mortgages 285 1 4 290 - 48 Consumer, Personal and Othe r 46 1 3 50 - 116 Credit Cards - - - - - 41 Large Corporate 331 3 21 354 147 325 SMEs 404 12 157 573 175 581 Public Sector - - 4 4 - 4 Total loans and a dvances to customers at amortised cost 1,066 17 189 1,271 322 1,115 Financial guarante es 13 1 8 22 137 80 Letters of credit - - - - - - Total 13 1 8 22 137 80
4.3.4 Loan-to-value ratio of mortgage and commercial real estate lending portfolios
The below table depicts the LTV ratio, which represents the correlation between mortgage and commercial portfolios gross
carrying amounts and the value of the property held as collateral (plus any other eligible collateral according to credit policy
manual). A clustering of residential and commercial real estate, by range of LTV, is summarized as follow:
Group Commercial Mortgages 31/12/2023 real estate (gross loans (gross amounts) amounts) Less than 50% 3,350 82 50%-70% 1,411 269 71%-80% 468 116 81%-90% 338 177 91%-100% 228 10 101%-120% 235 22 121%-150% 176 56 Greater than 150% 248 69 Total exposure 6,454 799 Weighted Average LTV 56.5% 99.3%
Piraeus Financial Holdings Group – 31 December 2023
274
Group Commercial real 31/12/2022 Mortgages estate loans (gross amounts) (gross amounts) Less than 50% 3,082 50 50%-70% 1,568 53 71%-80% 555 19 81%-90% 415 35 91%-100% 311 8 101%-120% 356 37 121%-150% 254 3 Greater than 150% 338 17 Total exposure 6,879 223 Weighted Average LTV 63.1% 92.5%
4.3.5 Repossessed collaterals
The below mentioned real estate collaterals refer to property that is included in line items "Other Assets", "Property and
equipment","Investment property" and "Assets held for sale" in the Statement of Financial Position.
Accumulated Net gain / Group Of which: Net sale price impairment or Of which: on losses on sale Gross amount added this Net amount of repossessed fair value newly added of repossessed 31/12/2023 year collaterals sold adjustment collaterals Real estate 2,005 39 (142) (4) 1,863 66 (3) -Residential 455 22 (27) (1) 429 18 4 -Commercial 1,549 17 (115) (3) 1,434 47 (7) Other collateral 6 - (6) (1) - 1 -
Accumulated Net gain / Group Of which: Net sale price impairment or Of which: on losses on sale Gross amount added this Net amount of repossessed fair value newly added of repossessed 31/12/2022 year collaterals sold adjustment collaterals Real estate 2,029 60 (127) (19) 1,902 53 6 -Residential 455 33 (29) (4) 425 24 3 -Commercial 1,574 27 (98) (16) 1,477 29 3 Other collateral 8 - (7) (1) 1 1 -
As of 31 December 2023 and 2022 the Company has no repossessed collaterals.
The Group mainly through the Bank grants loans and advances to customers at amortised cost which are secured by real
estate. In case these loans become defaulted, the Group and the Bank proceed to the repossession of the underlying real
estate collaterals relevant property, if this is assessed as the best solution by the responsible, authorized for this purpose,
units of the Bank and of the Group. In this context, the specific characteristics of each property (such as the type and the
condition of the property, the location, possible uses, etc.) and the cost for acquiring the property are being assessed, taking
into account the potential value of subsequent sale or the potential benefit resulting from own use of the asset. In this
context, as at 31 December 2023 the carrying amount of the repossessed property classified as investment property, which
is also rented, amounted to € 506 million.
Piraeus Financial Holdings Group – 31 December 2023
275
This assessment is part of the Group’s and the Bank's strategy and is in line with the real estate owned assets (“REO”) Policy
Framework and its objectives for profitability, liquidity and capital adequac y.
For the Group and the Bank, the selection of properties acquired from auctions and / or via voluntary surrenders is
performed by the Real Estate Committee of the Group, which is responsible for deciding in which auctions the Bank will
participate in order to acquire the collateral (based on recent market valuation), in cooperation with Intrum Hellas Credit
Servicing S.A. Furthermore, the management of the above-mentioned properties, as well as the supervision of the relevant
REO servicers, is performed by the Group Real Estate (“GRE”) unit.
Regarding the properties for sale, there are procedures in place that involve several sale channels. These procedures are
supervised by GRE and are executed via the Bank's branch network, real estate agencies, direct sales, or through public
tender processes. Relevant sale procedures are executed through the channels of the cooperating servicers ( Intrum REO
Solutions and Resolute Hellas). Furthermore, rental agreements for many acquired properties, managed by GRE unit or the
REO servicers, are signed when it is deemed favorable for the asset. Such rental agreements for the perimeter of assets
under the exclusive management of GRE are being monitored by the REO servicers, who are responsible for the monitoring
and collection of rents. Additionally, the Real Estate portfolio includes properties to be used by the Bank or to be rented t o
other companies of the Group. Such assets are managed by GRE, in cooperation with the Technical Division of the Bank. In
addition, special properties that can be utilized through further investments are examined on an individual base.
The above-mentioned activities determine the basic policy and framework for the Group’s procedures under normal real
estate conditions. However, the Μanagement assesses alternative scenarios for portfolio sales of repossessed property or
their contribution to various investment vehicles, in an attempt to improve total assets’ return.
4.4 Forbearance
Overview of forborne loans
The Group applies the Implementing Technical Standards (“ITS”) of EBA relating to forborne loans.
The alignment of the Restructuring Policy of the Group with the relevant EBA definitions and B oG guidelines, was backed
up with the development of structures and procedures, deployment of new information systems and updates on existing
applications, in order to achieve more effective and reliable management of loans past dues, by performing restructurings
according to the financial ability of the borrower and monitoring the effectiveness of various types of forbearance
measures.
Forborne loans and advances are defined as exposures arising from loans that have been subject to forbearance measures.
These measures are considered as a concession of the Group to a borrower who is facing or is about to face financial
difficulties in fulfilling its debt obligations. Forbearance may involve modification of contractual terms and conditions and
/or refinancing of debts.
Forbearance measures do not lead to derecognition, unless the modification changes substantially the loan terms of the
original contract.
According to the ITS of EBA, for the forborne status to be removed, all relevant criteria should apply, including mainly the
minimum required probation period (at least 2 years from the date of classification as non forborne exposure) . All forborne
Piraeus Financial Holdings Group – 31 December 2023
276
performing exposures are classified in Stage 2, while all forborne non-performing exposures are classified in Stage 3. The
Group has relevant detailed procedures in place.
In order to achieve greater efficiencies in the management of NPEs, the Group entered in October 2019 to a long-term
strategic partnership with Intrum for the management of NPEs and REOs, through the establishment of an independent
NPE servicing entity in Greece. Intrum provides restructuring and turnaround services of NPE portfolios, aiming at
maximising recoveries and minimising credit related losses, in line with the operational and financial targets set by the
Group.
The Group Planning Committee of the Bank, which inter-alia, is responsible for the management of loans’ past dues,
collaborates with GRM for the achievement of a common understanding and the development of appropriate
methodologies to assess the risk of the portfolio managed by Intrum. GRM monitors the forbearance process, assesses the
relative risks by portfolio and forbearance type and informs the CRO about the NPE evolutions on a monthly basis.
As of 31 December 2023 and 2022, the Company’s forborne loans and advances to customers measured at amortised cost
portfolio is nil.
Piraeus Financial Holdings Group – 31 December 2023
277
Credit quality of forborne loans and advances to customers measured at amortised cost
Group 31/12/2023 Loans measured at Forborne loans measured at % of Forborne loans amortised cost amortised cost measured at amortised cost Stage 1 33,215 - 0.0% Stage 2 3,346 649 19.4% Stage 3 1,180 533 45.2% POCI 605 101 16.7% Total Gross expos ure 38,346 1,283 3.3% Stage 1 ECL allowance (48) - 0.0% Stage 2 ECL allowance (106) (19) 17.8% Stage 3 ECL allowance (571) (276) 48.3% POCI ECL allowance (95) (14) 14.9% Total ECL allowance (819) (309) 37.7% Stage 1 33,167 - 0.0% Stage 2 3,240 630 19.4% Stage 3 609 258 42.3% POCI 510 87 17.0% Loans measured at amortised cost 37,527 974 2.6% Value of collateral 25,979 881 3.4%
Piraeus Financial Holdings Group – 31 December 2023
278
Group 31/12/2022 Loans measured at Forborne loans measured at % of Forborne loans amortised cost amortised cost measured at amortised cost Stage 1 31,932 - 0.0% Stage 2 3,797 1,223 32.2% Stage 3 2,277 936 41.1% POCI 782 206 26.4% Total Gross expos ure 38,787 2,365 6.1% Stage 1 ECL allowance (37) - 0.0% Stage 2 ECL allowance (120) (44) 36.9% Stage 3 ECL allowance (1,115) (351) 31.5% POCI ECL allowance (148) (24) 16.4% Total ECL allowance (1,421) (420) 29.5% Stage 1 31,895 - 0.0% Stage 2 3,677 1,178 32.0% Stage 3 1,162 585 50.4% POCI 633 182 28.7% Loans measured at amortised cost 37,367 1,945 5.2% Value of collateral 27,658 1,727 6.2%
Forborne loans and advances to customers measured at amortised cost by type of forbearance measure
Group 31/12/2023 31/12/2022 Reduced paymen t schedule 264 395 Payment moratorium / Holi days 55 21 Term extension 37 177 Arrears capitalization 84 113 Hybrid (i.e. combi nation of forbearance measure s) 484 1,037 Other 51 202 Total net amount 974 1,945
Piraeus Financial Holdings Group – 31 December 2023
279
Movement of forborne loans measured at amortised cost for the year ended 31 December 2023 and 2022
Group 31/12/2023 31/12/2022 Opening balance as at 1/1 (net) 1,945 2,950 Forbearance measures du ring the year 267 435 Repayment of loans (partial or total) (205) (282) Loans that exited forbearance st atus during the year (1,010) (989) Transfer (to) / from Held fo r sale (49) (152) ECL impairment charge for the ye ar 21 (33) FX differences and othe r movements 6 16 Closing balance (net) 974 1,945
Forborne loans measured at amortised cost by product line
Group 31/12/2023 31/12/2022 Retail lending 347 869 Mortgage 307 761 Consumer, Personal and Other 40 107 Credit cards - - Corporate lending 627 1,077 Large Corporate 350 513 SME 277 564 Public sector - - Greece - - Other countries - - Total net amount 974 1,945
Forborne loans measured at amortised cost by geographical region
Group 31/12/2023 31/12/2022 Greece 963 1,921 Rest of Europe 12 24 Total net amount 974 1,945
Piraeus Financial Holdings Group – 31 December 2023
280
4.5 Debt to equity transactions
In certain cases, a debt restructuring may involve the exchange of equity for debt in an effort to make the borrower’s
businesses viable. Such debt restructuring agreements result to obtaining a controlling interest, joint control, significant
influence or a minority shareholding over the borrower. The Group did not engage into material debt to equity transactions
with third party in 2023 and 2022.
4.6 Investment securities
The tables below present the credit rating and stage allocation of debt securities measured at FVTOCI, based on Standard
and Poor’s rating scale:
Group External rating grade of debt securities measured at FVTOCI 31/12/2023 Stage 1 Stage 2 Stage 3 POCI Total AAA 297 - - - 297 A- to A+ - - - - - BBB- to ΒΒΒ+ - - - - - BB- to ΒΒ+ 1,038 - - - 1,038 Lower than BB- - - - - - Unrated - - - - - Total 1,335 - - - 1,335
Group External rating grade of debt securities measured at FVTOCI 31/12/2022 Stage 1 Stage 2 Stage 3 POCI Total AAA - - - - - A- to A+ - - - - - BBB- to ΒΒΒ+ - - - - - BB- to ΒΒ+ 795 - - - 795 Lower than BB- 1 - - - 1 Unrated - - - - - Total 796 - - - 796
The Company had no debt securities measured at FVTOCI as at 31 December 2023 and 2022.
The tables below present the credit rating, stage allocation and ECL allowance of debt securities measured at amortised
cost, based on Standard and Poor’s rating scale:
Piraeus Financial Holdings Group – 31 December 2023
281
Group External rating grade of debt securities at amortised co st 31/12/2023 Stage 1 Stage 2 Stage 3 POCI Total ECL Allowance Total AAA 524 - - - 524 - 524 A- to A+ 83 - - - 83 - 83 BBB- to ΒΒΒ+ 2,552 - - - 2,552 2 2,549 BB- to ΒΒ+ 8,435 - - - 8,435 13 8,422 Lower than BB- 79 -7-87 6 81 Total 11,673 -7-11,681 21 11,659
Company
External rating grade of debt securities at amortised cost
31/12/2023
Stage 1
Stage 2
Stage 3
POCI
Total
ECL
Allowance
Total
BBB- to ΒΒΒ+
-
-
-
-
-
-
-
BB- to ΒΒ+
855
-
-
-
855
7
848
Lower than BB-
-
-
-
-
-
-
-
Total
855
-
-
-
855
7
848
Group External rating grade of debt securities at amortised co st 31/12/2022 Stage 1 Stage 2 Stage 3 POCI Total ECL Allowance Total AAA 10 - - - 10 -10 A- to A+ 21 - - - 21 -21 BBB- to ΒΒΒ+ 2,463 - - - 2,463 -2,462 BB- to ΒΒ+ 8,126 - - - 8,126 25 8,101 Lower than BB- 248 11 - - 258 9 250 Total 10,867 11 - - 10,878 34 10,844
Company
External rating grade of debt securities at amortised cost
31/12/2022
Stage 1
Stage 2
Stage 3
POCI
Total
ECL Allowance
Total
BBB- to ΒΒΒ+
-
-
-
-
-
-
-
BB- to ΒΒ+
819
-
-
-
819
23
796
Lower than BB-
-
-
-
-
-
-
-
Total
819
-
-
-
819
23
796
4.7 Concentration of risks of financial assets with credit risk exposure
Geographical sector
The following tables break down the gross carrying amounts of financial assets, which are exposed to credit risk. The credit
risk exposure is based on the country of domicile of each counterparty.
Piraeus Financial Holdings Group – 31 December 2023
282
Group Gross carrying amounts Grand 31/12/2023 Greece Other Countries Total Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total Due from banks 392 - - - 392 642 - - - 642 1,034 Loans and advance s to customers at amortised 23,613 3,082 1,029 594 28,317 9,602 264 151 11 10,028 38,346 cost Retail Lending 5,585 1,813 280 332 8,011 71 22 4 7 104 8,115 Mortgages 4,363 1,493 218 280 6,355 68 21 4 7 99 6,454 Consumer, Persona l 897 220 52 51 1,220 2 1 - - 4 1,224 and Other Credit car ds 325 100 11 1 436 1 - - - 1 437 Corporate and Public 18,027 1,269 748 262 20,307 9,531 242 147 5 9,924 30,231 Sector Le nding Large Corporat e 9,449 390 285 86 10,210 9,465 216 97 - 9,778 19,988 SME 7,581 879 463 174 9,098 66 25 50 5 146 9,244 Public Sect or 996 - 1 2 999 - - - - - 999 Financial assets at 1,038 - - - 1,038 297 - - - 297 1,335 FVTOCI Debt securities at 8,415 7 - - 8,423 3,251 - 7 - 3,258 11,681 amortised cost Other assets - Financial 959 41 183 - 1,184 87 - 14 - 101 1,285 Instruments Total 34,417 3,130 1,212 594 39,354 13,878 264 172 11 14,325 53,679
Piraeus Financial Holdings Group – 31 December 2023
283
The comparative figures for the Group of line items “Due from banks” and “Other assets – Financial instruments” have been
reclassified. Refer to Notes 4.8 and 49 for further information.
Company
Gross carrying amounts
31/12/2023
Greece
Other Countries
Grand Total
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
Due from banks
34
-
-
-
34
-
-
-
-
-
34
Debt securities at
amortised cost
855
-
-
-
855
-
-
-
-
-
855
Other assets -
Financial
Instruments
20
-
-
-
20
-
-
4
-
4
24
Total
910
-
-
-
910
-
-
4
4
914
Group Gross carrying amounts 31/12/2022 Greece Other Countries Grand Total Stage 1 Stage 2 Stage 3 POCI Total Stage 1 Stage 2 Stage 3 POCI Total Due from banks 77 - - - 77 1,338 - - - 1,338 1,415 Loans and advance s to customers at amortised 22,526 3,612 1,735 766 28,638 9,407 185 542 15 10,149 38,787 cost Retail Lending 5,673 1,994 509 390 8,566 90 46 64 9 208 8,774 Mortgages 4,478 1,649 315 316 6,758 73 28 11 9 121 6,879 Consumer, Persona l 860 246 146 71 1,323 16 17 53 - 86 1,410 and Other Credit car ds 335 99 47 3 484 1 - - - 1 485 Corporate and Public 16,852 1,617 1,226 376 20,072 9,317 139 478 6 9,941 30,013 Sector Le nding Large Corporat e 8,572 424 439 100 9,535 9,206 112 221 2 9,541 19,076 SME 6,665 1,193 782 275 8,915 111 28 257 4 400 9,314 Public Sect or 1,615 - 5 2 1,623 - - - - - 1,623 Financial assets at 795 - - - 795 1 - - - 1 796 FVTOCI Debt securities at 8,177 - - - 8,177 2,690 11 - - 2,701 10,878 amortised cost Other assets - Financial 967 43 166 - 1,176 67 - 57 - 124 1,300 Instruments Total 32,542 3,654 1,901 766 38,863 13,503 196 599 15 14,313 53,176
Piraeus Financial Holdings Group – 31 December 2023
284
Company
Gross carrying amounts
31/12/2022
Greece
Other Countries
Grand
Total
Stage 1
Stage 2
Stage 3
POCI
Total
Stage 1
Stage 2
Stage 3
POCI
Total
Due from banks
45
-
-
-
45
-
-
-
-
-
45
Debt securities at
amortised cost
819
-
-
-
819
-
-
-
-
-
819
Other assets - Financial
Instruments
18
-
-
-
18
-
-
11
-
11
29
Total
882
-
-
-
882
-
-
11
-
11
893
Piraeus Financial Holdings Group – 31 December 2023
285
Industry Sector
The following tables break down the gross carrying amounts per industry sector of the Group’s financial assets that are exposed to credit risk, inclusive of staging classification.
The allocation was performed according to the business sector of each counterparty.
Group Gross carrying amount s - Industry sec tors Wholesale Coastline / Financial Manufacturing Real Estate Project Public Shipping Agricul- Transport Other 31/12/2023 Construction and retail Ferries Hotels Energy Individuals Total corporations / Handicraft Companies Finance sector Companies ture and Logistics industries trade Companies Due from banks 1,034 - - - - - - - - - - - - - - 1,034 Loans and ad vances to customers at amortised cost 7,572 3,741 841 981 2,609 3,365 999 2,269 116 2,583 610 1,201 710 2,635 8,115 38,346 Retail lending - - - - - - - - - - - - - - 8,115 8,115 Mortgages - - - - - - - - - - - - - - 6,454 6,454 Consumer, Person al and Other - - - - - - - - - - - - - - 1,224 1,224 Credit cards - - - - - - - - - - - - - - 437 437 Corporate and Pu blic Sector Lending 7,572 3,741 841 981 2,609 3,365 999 2,269 116 2,583 610 1,201 710 2,635 - 30,231 Large Corporate 7,523 1,487 332 672 2,605 945 - 2,269 116 1,372 14 886 405 1,364 - 19,988 SME 49 2,254 510 309 4 2,420 - - - 1,211 596 315 306 1,271 - 9,244 Public Sector 999 999 Financial assets at FVT OCI - - - - - - 1,335 - - - - - - - - 1,335 Debt securities at amortised cost 1,090 87 - 9 - - 10,233 - - - - 26 27 208 - 11,681 Other assets - Fina ncial Instruments 13 27 17 16 - 2 550 - - - - 12 - 503 144 1,285 Total 9,709 3,855 858 1,006 2,609 3,368 13,116 2,269 116 2,583 610 1,239 738 3,346 8,259 53,679 Stage 1 9,621 3,323 736 833 2,605 2,972 13,038 2,122 115 2,086 511 1,186 604 2,752 5,791 48,296 Stage 2 74 331 58 22 4 197 22 146 1 381 43 22 22 234 1,835 3,394 Stage 3 4 175 42 133 - 153 53 - - 47 49 5 110 319 294 1,384 POCI 10 26 23 18 - 45 2 - - 69 7 25 2 40 339 604 Total 9,709 3,855 858 1,006 2,609 3,368 13,116 2,269 116 2,583 610 1,239 738 3,346 8,259 53,679
The Group’s gross carrying amount of the Public sector’s loans of € 999 million as at 31 December 2023 includes the funding facility to OPEKEPE of € 951 million (31 December
2022: € 1,558 million).
Piraeus Financial Holdings Group – 31 December 2023
286
Group Gross carrying amount s - Industry sec tors Manufacturi Wholesale Coastline/ Financial Real Estate Project Public Shipping Agricul- Transport Other 31/12/2022 ng / Construction and retail Ferries Hotels Energy Individuals Total corporations Companies Finance sector Companies ture and Logistics industries Handicraft trade Companies Due from banks 1,415 - - - - - - - - - - - - - - 1,415 Loans and ad vances to customers at amortised cost 7,344 4,032 914 1,093 2,198 3,272 1,623 2,206 223 2,345 577 938 709 2,539 8,774 38,787 Retail lending - - - - - - - - - - - - - - 8,774 8,774 Mortgages - - - - - - - - - - - - - - 6,879 6,879 Consumer, Person al and Other - - - - - - - - - - - - - - 1,410 1,410 Credit cards - - - - - - - - - - - - - - 485 485 Corporate and p ublic sector lending 7,344 4,032 914 1,093 2,198 3,272 1,623 2,206 223 2,345 577 938 709 2,539 - 30,013 Large Corporate 7,272 1,775 351 755 2,183 902 - 2,206 223 1,199 19 628 361 1,203 - 19,076 SME 72 2,257 563 337 15 2,371 - - - 1,146 558 311 348 1,336 - 9,314 Public Sector 1,623 1,623 Financial assets at FVT OCI - - - - - - 796 - - - - - - - - 796 Debt securities at amortised cost 521 82 - 9 - - 10,010 - - - - 27 27 201 - 10,878 Other assets - Fina ncial Instruments 11 18 18 14 - 4 605 - - - - 9 - 482 138 1,300 Total 9,291 4,133 932 1,115 2,198 3,277 13,034 2,207 223 2,345 577 974 736 3,222 8,913 53,176 Stage 1 9,227 3,488 545 791 2,182 2,563 12,968 2,141 124 1,772 493 890 483 2,523 5,855 46,045 Stage 2 39 325 225 36 5 354 16 62 - 296 34 26 97 295 2,040 3,850 Stage 3 14 277 137 251 10 309 48 3 99 183 43 32 154 320 619 2,499 POCI 10 43 26 37 - 52 2 - - 94 7 27 2 84 399 782 Total 9,291 4,133 932 1,115 2,198 3,277 13,034 2,207 223 2,345 577 974 736 3,222 8,913 53,176
The comparative figures of line items “Due from banks” and “Other assets – Financial instruments” have been reclassified. Refer to Notes 4.8 and 49 for further information.
The following tables break down the gross carrying amounts per industry sector of t he Company’s financial assets that are exposed to credit risk, inclusive of staging
classification. The allocation was performed according to the business sector of each counterparty.
Piraeus Financial Holdings Group – 31 December 2023
287
Company
Gross carrying amounts - Industry sectors
31/12/2023
Financial
corporations
Manufacturing
/ Handicraft
Construction
Real Estate
Companies
Project
Finance
Wholesale
and retail
trade
Public
sector
Shipping
Companies
Coastline /
Ferries
Companies
Hotels
Agricul-
ture
Energy
Transport
and Logistics
Other
industries
Individuals
Total
Due from banks
34
-
-
-
-
-
-
-
-
-
-
-
-
-
-
34
Debt secutities at
amortised cost
855
-
-
-
-
-
-
-
-
-
-
-
-
-
-
855
Other assets - Financial
Instruments
1
-
-
-
-
-
-
-
-
-
-
-
-
23
-
24
Total
890
-
-
-
-
-
-
-
-
-
-
-
-
23
-
914
Stage 1
890
-
-
-
-
-
-
-
-
-
-
-
-
19
-
910
Stage 3
-
-
-
-
-
-
-
-
-
-
-
-
-
4
-
4
Total
890
-
-
-
-
-
-
-
-
--
-
-
-
23
-
914
Company
Gross carrying amounts - Industry sectors
31/12/2022
Financial
corporations
Manufacturing
/ Handicraft
Construction
Real Estate
Companies
Project
Finance
Wholesale
and retail
trade
Public
sector
Shipping
Companies
Coastline /
Ferries
Companies
Hotels
Agricul-
ture
Energy
Transport
and Logistics
Other
industries
Individuals
Total
Due from banks
45
-
-
-
-
-
-
-
-
-
-
-
-
-
-
45
Debt securities at
amortised cost
819
-
-
-
-
-
-
-
-
-
-
-
-
-
-
819
Other assets - Financial
Instruments
1
-
-
-
-
-
-
-
-
-
-
-
-
28
-
29
Total
864
-
-
-
-
-
-
-
-
-
-
-
-
28
-
893
Stage 1
864
-
-
-
-
-
-
-
-
-
-
-
-
17
-
882
Stage 3
-
-
-
-
-
-
-
-
-
-
-
-
-
11
-
11
Total
864
-
-
-
-
-
-
-
-
-
-
-
-
28
-
893
The following tables break down the nominal amounts of off-balance items per industry sector of the Group’s financial assets that are exposed to credit risk inclusive of
staging classification. The allocation was performed according to the business sector of each counterparty.
Piraeus Financial Holdings Group – 31 December 2023
288
Group Nominal Amounts of O ff Balance Sheet It ems - Industry se ctors Financial Wholesale Coastline / Manufacturing Real Estate Project Public Shipping Agricult Transport Other 31/12/2023 corporation Construction and retail Ferries Hotels Energy Individuals Total / Handicraft Companies Finance sector Companies ure and Logistics industries s trade Companies Letters of Guarantee 2,512 602 1,055 28 - 513 - - - 41 12 534 62 322 - 5,680 Letters of Credit - 35 50 - - 9 - - - - 6 - - 21 - 121 Irrevocable und rawn credit commitments 305 149 62 26 450 71 - 265 - 133 36 182 55 127 100 1,961 Balance at 31/12/2023 2,818 786 1,166 54 450 593 - 265 - 174 54 716 117 470 100 7,762 Stage 1 2,816 755 947 48 450 528 - 265 - 166 48 708 115 441 76 7,362 Stage 2 2 7 99 2 - 51 - - - 4 4 8 2 21 23 222 Stage 3 - 24 120 4 - 15 - - - 4 - - - 4 - 172 POCI - - - - - - - - - - 1 - - 3 1 6 Total 2,818 786 1,166 54 450 593 - 265 - 174 54 716 117 470 100 7,762
Group Nominal Amounts of O ff Balance Sheet It ems - Industry se ctors Financial Wholesale Coastline/ Manufacturing Real Estate Project Public Shipping Agricul- Transport Other 31/12/2022 corporatio Construction and retail Ferries Hotels Energy Individuals Total / Handicraft Companies Finance sector Companies ture and Logistics industries ns trade Companies Letters of Guarantee 2,180 536 987 28 - 246 - - - 46 13 466 57 230 - 4,789 Letters of Credit - 54 6 1 - 12 - - - - 4 - - 36 - 114 Irrevocable und rawn credit commitments 58 164 74 103 224 71 - 164 - 176 36 216 41 188 106 1,624 Balance at 31/12/2022 2,239 755 1,068 132 224 330 - 164 - 222 53 681 98 454 106 6,527 Stage 1 2,238 717 920 126 224 274 - 164 - 207 49 680 95 433 71 6,200 Stage 2 1 8 15 - - 38 - - - 4 2 1 2 12 34 116 Stage 3 - 30 132 6 - 17 - - - 11 - - 1 6 - 204 POCI - - - - - 0 - - - - 2 - - 3 1 6 Total 2,239 755 1,068 132 224 330 - 164 - 222 53 681 98 454 106 6,527
As at 31 December 2023 and 2022, the Company does not have any off balance sheet credit exposures.
Piraeus Financial Holdings Group – 31 December 2023
289
Receivables from the Greek Public Sector
The following table presents the carrying amount of the Group’s and the Company’s receivables from the Greek Public
Sector.
Group Company 31/12/2023 31/12/2022 31/12/2023 31/12/2022 Derivat ive financial inst ruments (as reclassi f ied) 43 73 - - Debt sec urities at FVTPL 475 154 - - Loans and adv ances at amor tised cost 998 1,619 - - Debt sec urities at amort ised cost 7,713 7,517 - - Debt sec urities at FVTOCI 1,038 795 - - Other ass e ts 692 731 7 12 Total 10,960 10,889 7 12
The comparative figure of line item “Derivative financial instruments” has been reclassified. Refer to Note 49 for further
information. The decrease in the carrying amount of line item “Loans and advances at amortised cost” by approximately €
621 million is mainly due to the decrease of the funding facility to OPEKEPE by € 607 million.
4.8 Offsetting of financial assets and liabilities
Financial assets and liabilities are offset and the net amount is reported in the Statement of Financial Position where the
Group currently has a legally enforceable right to set-off the recognised amounts and there is an intention to settle on a
net basis or realize the asset and settle the liability simultaneously. The Group enters into various master netting
arrangements or similar agreements that do not meet the criteria set by the applicable accounting guidance for offsetting
in the Statement of Financial Position but still allow for the related amounts to be set off in the event of a default by the
counterparty (such as bankruptcy or a failure to pay or perform). In the current period the Group offset derivative assets
and liabilities entered into with a central counterparty clearing member against margin collateral and reclassified
accordingly the prior year amounts. Refer to Note 49 for further information. The Company does not hold any master
netting agreements.
The tables below present the recognised financial instruments that are either offset or subject to master netting
arrangements or similar agreements but not offset, as at 31 December 2023 and 2022, and shows under “Net amount”
what the net impact would be on the Group’s Statement of Financial Position if all set-off rights were exercised.
Piraeus Financial Holdings Group – 31 December 2023
290
•
Financial assets subject to offsetting, enforceable master netting agreements and similar arrangements
Related amount s not offset in the St atement of Gross amounts of Net amounts of Financial Positi on Gross amounts recognised financial financial assets Group of recognised instruments offset i n presented in the 31/12/2023 financial assets the Statement of Statement of Financial Net Financial Positi on Financial Positi on instruments and Cash collateral amount other non cash received collateral receiv ed Financial Assets Derivat ive financial 1,960 (1,769) 191 (87) (27) 77 instrument s Reverse R epurchase 51 - 51 (51) - - agreements Due from B anks 983 - 983 (8) - 975 Total 2,994 (1,769) 1,225 (146) (27) 1,052
Related amount s not offset in the St atement of Gross amounts of Net amounts of Financial Positi on recognised financial Gross amounts financial assets instruments offset i n of recognised presented in the Financial Group the Statement of financial assets Statement of instruments and Cash collateral Net 31/12/2022 Financial Positi on Financial Positi on other non cash received amount (As reclassifi e d) collateral receiv ed Financial Assets Derivat ive financial 1,871 (1,651) 220 (93) (62) 65 instrument s Reverse R epurchase 52 - 52 (52) - - agreements (1)Due from B anks 697 665 1,362 (5) - 1,358 Total 2,620 (986) 1,635 (150) (62) 1,423
1
Refers to initial margin receivable reclassified from "Due to banks" in the context of derivatives and margin collateral offsetting.
•
Financial liabilities subject to offsetting, enforceable master netting agreements and similar arrangements
Related amount s not offset in the St atement of Gross amounts of Net amounts of Financial Positi on Gross amounts recognised financial financial l iabilities Group of recognised instruments offset i n presented in the Financial 31/12/2023 financial the Statement of Statement of instruments and Cash collateral Net liabiliti es Financial Positi on Financial Positi on other non cash pledged amount collateral pledged Financial Li abilities Derivat ive financial 603 (308) 295 (87) (8) 200 instrument s Repurchase 435 - 435 (435) - - agreements Due to B anks 5,644 (1,461) 4,183 (27) - 4,156 Total 6,682 (1,769) 4,913 (549) (8) 4,356
Piraeus Financial Holdings Group – 31 December 2023
291
Related amount s not offset in the St atement of Gross amounts of Net amounts of Financial Positi on Gross amounts recognised financial Group financial l iabilities of recognised instruments off set in 31/12/2022 presented in the Financial financial the Statement of (As reclassifi e d) Statement of instruments and Cash collateral Net liabiliti es Financial Positi on Financial Positi on other non cash pledged amount collateral pledged Financial Li abilities Derivat ive financial 659 (249) 410 (93) (5) 313 instrument s Repurchase 298 - 298 (298) - - agreements Due to B anks 6,624 (737) 5,887 (62) - 5,824 Total 7,581 (986) 6,595 (453) (5) 6,137
Line items "Due from banks" and "Due to banks" reported in the tables above, do not include reverse repurchase
agreements and repurchase agreements, respectively, as they are separately disclosed.
4.9 Market risk
Market risk is the current or prospective risk of loss due to adverse movements in the level or the volatility of market prices
and rates, including interest rates, equity and commodity prices and foreign exchange rates.
The Risk Committee of the BoD has approved a market risk management policy that applies to both the Group and the
Company and outlines the basic definitions of market risk management and defines the roles and responsibilities of the
units and executives involved. The Group and the Company engage in moderate trading activities in order to enhance
profitability and service their clientele. These trading activities bear an inherent market risk, which the Group and the
Company pursue to identify, estimate, monitor and manage effectively through a framework of principles, measurement
processes and a valid set of limits that apply to all the transactions of the Group and the Company. The most significant
types of market risk for the Group and the Company are interest rates, equity and foreign exchange risk.
The Group and the Company apply up to date, generally accepted techniques for the measurement of market risk.
Specifically, sensitivity indicators such as CSPV01 (adverse impact to the net present value of the bond portfolio for a 1
basis point parallel move in the yield spread curve) as well as Value-at-Risk (“VaR” incorporates all risk factors) are
calculated.
For every activity that bears an inherent market risk, the Group and the Company have assigned adequate market risk limits
which are monitored systematically. Market risk management is not confined to trading book activities but covers the
Statement of Financial Position as a whole.
The VaR measure is an estimate of the potential loss in the net present value of a portfolio, over a specified period and wit h
a specified confidence level. The Group adopted the Historical VaR approach (“HVaR”) which is a scenario-based method
based on historical data variations. It uses past observations to infer the potential future movements of market parameters,
with no assumption about the risk factors distribution. Market data shifts are measured over a look-back period of two (2)
years at daily horizons. The current positions are fully revaluated using these shifted market parameters. After applying the
different historical scenarios, the simulated profit & loss variations are sorted from the lowest to the highest. The VaR is
determined by reading the corresponding value out of the ordered profit & loss variations at the desired confidence level.
Piraeus Financial Holdings Group – 31 December 2023
292
As the VaR methodology evaluates the maximum risk at a specified confidence level (e.g. a 99% VaR measures a loss that
is expected to be exceeded only 1% of the time), another metric the Expected Shortfall (“ES”), captures the tail risk that is
not accounted for in the existing VaR measures. Thus, ES calculates the average loss above this level (e.g. a 99% ES measures
the average of the worst 1% of losses).
As a complement to VaR, a stress test analysis is conducted to estimate the potential outcomes on portfolio values under
exceptional events. A scenario analysis approach is used where a series of shifts (historical or market specific) on market
parameters is defined. Stress testing results are produced by the same calculation engine that produces VaR results and
are analyzed, on a scenario basis to identify how the positions perform under the predefined scenarios.
The Group and the Company evaluate the validity of the VaR estimates, by conducting a relevant back-testing on the trading
book VaR, through the comparison of the VaR estimate against the actual change in the value of the portfolio, due to the
changes in market prices, on a daily basis.
The VaR estimate for the Group’s Trading Book as at 31 December 2023 amounted to € 4.5 million (31 December 2022: €
2.8 million) and the decomposition of this estimate, per type of risk, inclusive of the diversification effect, is illustrated in
the table below. As at 31 December 2023 and 2022, the Company does not have any exposure included in trading book and
hence there is not a relevant VaR metric.
VaR VaR VaR VaR Diversification Group - Amounts in € million Interest Rate Foreign Commodities Total VaR Equity Risk Effect Risk Exchange Risk Risk 2023 4.5 2.5 1.2 0.2 0.8 (0.2) 2022 2.8 1.0 1.6 0.2 0.0 0.0
4.10 Currency risk
The Group and the Company are exposed to the effects of fluctuations in the prevailing foreign currency exchange rates on
their financial position and cash flows. Management sets limits on the level of exposure by currency, which are monitored
daily. The tables below summarise the Group’s and the Co mpany's exposure to foreign currency exchange risk as at 31
December 2023 and 2022.
The following tables include an analysis per currency of the Group’s and the Company's carrying amount of both assets and
liabilities, as well as the notional amounts of derivatives, which reduce significantly the undertaken foreign currency
exchange risk:
Piraeus Financial Holdings Group – 31 December 2023
293
Group Other EUR USD GBP JPY CHF Total currencies 31/12/2023 Assets Cash and bal ances with Central B anks 10,403 31 4 - 4 125 10,567 Due from ban ks 919 42 6 2 37 28 1,034 Financial asset s at FVTPL 609 - - - - - 609 Financial asset s mandatorily me asured at FVTPL 219 15 - - - - 234 Derivativ e financial instruments (n otional amounts) 1,789 1,374 145 - 1 267 3,575 Loans and adv ances to cu s tomer s at am ortised cost 34,510 2,390 4 1 600 22 37,527 Loans and adv ances to cu s tomer s mandat orily measured at FVTPL 53 - - - - - 53 Investment se curities 12,999 20 23 - - - 13,042 Investment prope rty 1,539 - - - - 218 1,757 Investments in associat ed underta kings and joint v entures 1,255 - - - - - 1,255 Property and e quipment 729 - - - - 3 732 Intangible as s ets 345 - - - - 2 347 Tax receivab les 161 - - - - - 161 Deferred tax assets 5,701 - - - - 2 5,703 Other asset s 2,911 32 1 - 33 19 2,996 Assets held for sale 192 - - - 39 9 241 Total assets 74,335 3,905 182 3 714 696 79,835 Liabilities Due to banks 4,601 10 4 - - 3 4,618 Due to custom ers 56,366 2,700 123 4 30 343 59,567 Derivativ e financial instruments (n otional amounts) 1,388 1,195 50 1 665 285 3,584 Debt securiti es in issue 1,886 - - - - - 1,886 Other borrowe d funds 939 - - - - - 939 Current incom e tax li abilities 11 - - - - 2 13 Deferred tax liabil ities 9 - - - - - 9 Retireme nt and termi nation benefit obligatio ns 52 - - - - - 52 Provisions 142 - - - 20 1 164 Other liabi lities 1,432 - - - - 27 1,459 Fair Value chan ges of hedged ite ms in portfolio hedges of inte rest rate risk 94 - - - - - 94 Total liabi l ities 66,920 3,906 177 4 716 662 72,386 Derivative f i nancial instruments - fair valu e adjustm e nt (96) - - - - - (96) Foreign curr e ncy ex posure 7,318 (1) 5 (1) (2) 33 7,353
Piraeus Financial Holdings Group – 31 December 2023
294
Group Other EUR USD GBP JPY CHF Total currencies 31/12/2022 As r eclassifi ed Assets Cash and bal ances with Central B anks 9,535 26 13 - 4 76 9,653 Due from ban ks 1,302 38 6 2 35 32 1,415 Financial asset s at FVTPL 548 - - - - - 548 Financial asset s mandatorily measure d at FVTPL 165 17 - - - - 182 Derivativ e financial instruments (n otional amounts) 1,499 1,093 227 20 2 226 3,067 Loans and adv ances to cu s tomer s at am ortised cost 34,292 2,335 4 1 680 54 37,367 Loans and adv ances to cu s tomer s mandatori ly measured at FVTP L 52 - - - - - 52 Investment se curities 11,699 18 23 - - 1 11,741 Investment prope rty 1,459 - - - - 63 1,522 Investments in associat ed underta kings and joint v entures 1,023 - - - - - 1,023 Property and equi pment 724 - - - - 4 728 Intangible as s ets 311 - - - - 1 312 Tax receivab les 145 - - - - - 145 Deferred tax assets 5,972 - - - - 2 5,974 Other asset s 3,299 15 1 - - 42 3,357 Assets held for sale 386 - - - 20 - 406 Total assets 72,411 3,542 274 23 741 500 77,492 Liabilities Due to banks 6,080 63 42 - - 1 6,185 Due to custom ers 55,303 2,597 127 3 25 317 58,372 Derivativ e financial instruments (n otional amounts) 1,171 898 105 20 742 138 3,075 Debt securiti es in issue 849 - - - - - 849 Other borrowe d funds 937 - - - - - 937 Current incom e tax li abilities 7 - - - - - 7 Deferred tax liabil ities 9 - - - - 1 10 Retireme nt and termi nation benefit obligatio ns 55 - - - - - 55 Provisions 122 - - - - 2 123 Other liabi lities 1,095 - - - - 17 1,113 Liabiliti es held for sale 2 - - - - - 2 Total liabi l ities 65,630 3,559 274 23 767 476 70,729 Derivative f i nancial instruments - fair valu e adjustm e nt (182) - - - - - (182) Foreign curr ency expos ure 6,599 (16) - - (26) 24 6,581
Piraeus Financial Holdings Group – 31 December 2023
295
Company
EUR
USD
GBP
JPY
CHF
Other
currencies
Total
31/12/2023
Assets
Due from banks
34
-
-
-
-
-
34
Investment securities
849
2
-
-
-
-
850
Investments in subsidiaries
5,562
-
-
-
-
11
5,573
Property and equipment
1
-
-
-
-
-
1
Tax receivables
7
-
-
-
-
-
7
Other assets
37
-
-
-
-
-
37
Total assets
6,489
2
-
-
-
11
6,503
Liabilities
Other borrowed funds
939
-
-
-
-
-
939
Other liabilities
60
-
-
-
-
-
60
Total liabilities
999
-
-
-
-
-
999
Derivative financial instruments - fair value adjustment
-
-
-
-
-
-
Foreign currency exposure
5,490
2
-
-
-
11
5,503
Company
EUR
USD
GBP
JPY
CHF
Other
currencies
Total
31/12/2022
Assets
Due from banks
45
-
-
-
-
-
45
Investment securities
796
2
-
-
-
-
798
Investments in subsidiaries
5,546
-
-
-
-
12
5,558
Property and equipment
1
-
-
-
-
-
1
Tax receivables
12
-
-
-
-
-
12
Other assets
43
1
-
-
-
-
44
Total assets
6,442
3
-
-
-
12
6,457
Liabilities
Other borrowed funds
936
-
-
-
-
-
936
Other liabilities
55
-
-
-
-
-
55
Total liabilities
992
-
-
-
-
-
992
Derivative financial instruments - fair value adjustment
-
-
-
-
-
-
-
Foreign currency exposure
5,450
3
-
-
(0)
12
5,465
4.11 Interest rate risk
Interest rate risk is the risk of a negative impact on the Group and the Company’s financial position due to its exposure to
interest rates fluctuations.
Changes in interest rates affect the Group and the Company's profitability by changing its net interest income and the level
of the other interest - sensitive income and expenses.
Piraeus Financial Holdings Group – 31 December 2023
296
Changes in interest rates also affect the underlying value of the Group and the Company's assets and liabilities because the
present value of future cash flows (and in some cases, the cash flows themselves) changes when interest rates also change.
Accordingly, an effective interest rate risk management process that assesses, monitors and helps maintain interest rate
risk within prudent levels (through effective hedging, where relevant), is essential for the sustainability and soundness of
the Group’s and the Company’s financial performance.
The Group and the Company apply an Interest Rate Risk Management Policy outlining various valuation techniques that
mainly rely on maturity and repricing schedules, incorporating behavioral models, where necessary. In addition, the Group
and the Company have entered into hedging derivative transactions classified as FVH, to actively manage their interest rate
risk.
As presented in the tables below, interest rate gap analysis is a maturity / repricing schedule that distributes interest-
sensitive assets and liabilities into a certain number of predefined time bands, according to their maturity (for fixed-rate
instruments) or time remaining to their next repricing (for floating-rate instruments).
Those assets and liabilities lacking actual maturities (e.g. open accounts) or definitive repricing intervals (e.g. sight deposits
or savings accounts) are assigned to the appropriate time band through the application of behavioral models.
Assets and liabilities in foreign currency are translated into Euro using the corresponding FX rates as of the reporting date.
Non- Group Up to 1 1 - 3 3 - 12 Over 5 1 - 5 years interest Total month months months years 31/12/2023 bearing Financial ass e ts Cash and balan c es with C entral Banks 10,529 17 - - - 21 10,567 Due from ban ks 1,003 3 6 2 - 21 1,034 Financial asset s at FVTPL 19 66 154 43 296 32 609 Financial asset s mandatorily me asured at FVTPL - - - 42 27 165 234 Loans and adv ances to cu s tomer s 13,560 9,444 5,879 3,951 4,746 - 37,579 Investment se curities 121 926 728 1,388 9,824 55 13,042 Other asset s 3 - 2 66 57 960 1,089 Total financ i al assets 25,235 10,456 6,769 5,492 14,949 1,254 64,155 Financial li abilities Due to banks 4,479 115 1 23 - - 4,618 Due to custom ers 22,773 9,838 9,440 9,565 7,949 - 59,567 Debt securiti es in issue - - - 1,886 - - 1,886 Other borrowe d funds - - 419 520 - - 939 Other liabi lities 2 - 2 3 - 1,452 1,459 Total financ i al liabi l ities 27,254 9,954 9,862 11,997 7,949 1,453 68,469 Net notiona l amou nt of der i vative f inancial instruments (12) (11) 16 (13) 3 (18) Total inter est rate ga p (2,032) 491 (3,077) (6,518) 7,003 (199) (4,332)
Piraeus Financial Holdings Group – 31 December 2023
297
Non- Group Up to 1 1 - 3 3 - 12 Over 5 1 - 5 years interest Total month months months years 31/12/2022 bearing Financial ass e ts Cash and bal ances with Central B anks 9,643 - - - - 10 9,653 Due from ban ks (as recl assifie d) 1,313 69 7 3 - 23 1,415 Financial asset s at FVTPL 73 145 212 46 53 19 548 Financial asset s mandatorily me asured at FVTPL - - 32 - 12 138 182 Loans and adv ances to cu s tomer s 14,743 7,669 6,627 5,298 3,080 - 37,418 Investment se curities (as reclassi fied) 80 837 564 1,171 8,988 101 11,741 Other asset s (as re classified) - - 5 35 92 994 1,125 Total financ i al assets 25,854 8,720 7,446 6,552 12,225 1,286 62,083 Financial li abilities Due to banks (a s reclas s ified) 5,978 103 5 92 7 - 6,185 Due to custom ers 29,216 4,304 6,505 10,621 7,726 - 58,372 Debt securiti es in issue - - - 849 - - 849 Other borrowe d funds - - - 937 - - 937 Other liabi lities (as reclassified) 2 1 3 2 - 1,105 1,113 Total financ i al liabi l ities 35,197 4,408 6,513 12,501 7,733 1,105 67,456 Net notiona l amou nt of der i vative f inancial instruments 842 (23) 88 2,618 (3,537) (12) Total inter est rate ga p (8,501) 4,290 1,022 (3,331) 955 181 (5,385)
Company
Up to 1
month
1 - 3
months
3 - 12
months
1 - 5 years
Over 5
years
Non -
interest
bearing
Total
31/12/2023
Financial assets
Due from banks
34
-
-
-
-
-
34
Investment securities
-
-
393
455
-
2
850
Other assets
-
-
-
-
-
24
24
Total financial assets
34
-
393
455
-
27
909
Financial liabilities
Other borrowed funds
-
-
419
520
-
-
939
Other liabilities
-
-
-
-
-
60
60
Total financial liabilities
-
-
419
520
-
60
999
Total interest rate gap
34
-
(26)
(65)
(33)
(90)
Company
Up to 1
month
1 - 3
months
3 - 12
months
1 - 5 years
Over 5
years
Non-
interest
bearing
Total
31/12/2022
Financial assets
Due from banks
45
-
-
-
-
-
45
Investment securities (as reclassified)
-
-
-
796
-
2
798
Other assets
-
-
-
-
-
29
29
Total financial assets
45
-
-
796
-
31
871
Financial liabilities
Other borrowed funds
-
-
-
936
-
-
936
Other liabilities
-
-
-
-
-
55
55
Total financial liabilities
-
-
-
936
-
55
992
Total interest rate gap
45
-
-
(141)
-
(24)
(120)
Piraeus Financial Holdings Group – 31 December 2023
298
The comparative figures for the Group of line items “Due from banks”, “Investment securities”, “Other assets”,”Due to banks”, and
“Other liabilities” have been reclassified. For the Company, line item “Investment securities” has been reclassified. Refer to Note 49
for further information.
The Group and the Company calculate any change in the net present value of on balance-sheet items in response to a change
in interest rates by assuming a parallel yield curve shift of 1 basis point (PV01).
In addition, the changes in Net Interest Income (“ΔNII”) measure, denote the negative effect on the expected annual
interest income, as a result of a parallel shift in interest rates for all currencies considered.
For ΔNII and PV01, Management has assigned adequate limits, which are monitored on a regular basis.
Management evaluates potential financial losses under stressful market conditions. Possible stress scenarios include abrupt
changes in the level of interest rates, changes in the slope and the shape of the yield curves, or changes in the volatility of
market rates.
Interest rate risk disclosures under Pillar III are available at the Group’s website.
4.12 Liquidity risk
Management acknowledges that effective Liquidity Risk Management is essential to the Group’s ability to meet its liabilities,
while also safeguarding its financial results and its capital adequacy. Liquidity risk is defined as the risk arising from the
Group’s inability to meet its cash flow obligations when they come due, without incurring unacceptable costs or losses at
all times, including under stress. In order to manage this risk, current and future liquidity requirements are monitored
thoroughly, along with the respective needs for funding, depending on the projected maturity of outstanding transactions.
In general, liquidity management is a process of balancing cash flows within time bands, so that, under normal conditions,
the Group may meet all its financial obligations as they become due.
The Board Risk Committee (“BRC”) is responsible for the approval of the Liquidity Risk Policy the effective management of
liquidity risk which is applied in a uniform manner by the Group. This policy is consistent with the globally applied practices
and supervisory regulations, and adapted to the individual activities and structures of the Group.The policy specifies the
principal liquidity risk assessment definitions and methodologies, defines the roles and responsibilities of the Group’s Units,
subsidiaries and staff involved in the liquidity management governance, and sets out the guidelines for liquidity crisis
management. The contribution of each administrative level to Liquidity Risk management is organized in such a way as to
ensure the establishment of clear areas of responsibility, the separation of tasks and the avoidance of conflicts of interest.
The Group’s executive and senior management has the responsibility to implement the business plan’s strategic targets
and aspirations within the Liquidity Risk appetite approved by the BRC, and to develop the policies, methodologies and
procedures for identifying, measuring, monitoring and controlling Liquidity Risk, consistent with the nature and complexity
of the Group’s activities. An extensive set of reports on the Group’s liquidity position and other key risk metrics, including
approved RAF, Contingency Funding Plan and Recovery Plan liquidity risk indicators’ usage and limits, is produced on a daily
basis, and submitted to executive and senior management stakeholders, ensuring that Liquidity Risk stays within approved
levels. Similar set of reports are produced on a regular basis and submitted to Management Committees, the BoD, internal
shareholders, and the regulatory authorities, depending on the type of analysis. In order to manage liquidity risk effectively,
Management monitors regular reporting contains, inter alia, the amount, quality and composition/diversification of its
liquid assets, the cash flow analysis of its assets and liabilities (inflows, outflows) in time buckets, the
Piraeus Financial Holdings Group – 31 December 2023
299
composition/diversification and cost of its funding sources, the composition/diversification and funding capacity of its
unencumbered collateral and its funding needs in local and foreign currencies.
Furthermore, the policy defines a contingency funding plan to be used in the case of a liquidity crisis. Such a crisis can take
place either due to an event specific to the Company or due to a market-driven event. Triggers and early warning signals
prescribed within the contingency funding plan serve as indicators for its realisation.
The Group calculates its LCR and NSFR ratios on a monthly and quarterly basis, respectively, to monitor its liquidity buffer
resilience to acute short-term stress and its funding profile stability in relation to the composition of its assets, as prescribed
in regulation (EU) No. 575/2013. As at 31 December 2023, both the Group LCR and NSFR exceeded the minimum regulatory
threshold of 100%, standing at 241% and 133% respectively. Liquidity Risk disclosures under Pillar III are available at the
Group’s website.Under Directive 2013/36/EU (known as CRD IV), which has been transported into Greek Law by virtue of
Greek Law 4261/2014, credit institutions are required to have comprehensive strategies, procedures, policies and systems
to ensure adequate monitoring of liquidity risk. In accordance with the said Directive, the Group submitted in 2023 to the
SSM, its annual ILAAP report, which includes the rules governing the management of liquidity risk and the main results of
current and future liquidity position assessments for the Company and the Group. In addition, within the ICAAP and ILAAP
framework, Management examined stress test scenarios and assessed their impact on the Company’s and the Group’s
liquidity position and on mandatory liquidity ratios.
Contractual undiscounted cash flows
The contractual undiscounted cash flows of non-derivative financial liabilities and irrevocable undrawn credit commitments
are presented in the tables below. Liquidity risk arising from derivative liabilities is not considered significant. The cash
flows arising from liabilities items are calculated and classified into time periods in accordance with the contractual maturity
date or an estimated date based on a statistical analysis.
The comparative figures for the Group of line items ”Due to banks”, and “Other liabilities” have been reclassified. Refer to Note 49
for further information.
Group Up to 1 31/12/2023 1 - 3 months 3 - 12 months 1 - 5 years Over 5 years Total month Due to banks 542 4 3,726 412 182 4,865 Due to customers 49,419 4,181 5,992 48 - 59,640 Debt securities in i s sue 29 - 90 2,284 - 2,403 Other borrowed fun ds - 28 439 525 - 992 Other liabili t ies 156 72 68 87 281 66 4 Total 50,146 4,285 10,314 3,356 463 68,564 Irrevocable und r awn credit commitments 31 51 52 998 829 1,961
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300
Group Up to 1 31/12/2022 1 - 3 months 3 - 12 months 1 - 5 years Over 5 years Total month Due to banks (as reclassified) 524 3 2,071 3,848 43 6,489 Due to customers 52,984 2,870 2,511 25 - 58,389 Debt securities in i ssue 5 - 19 1,061 - 1,085 Other borrowed fun ds - 28 39 994 - 1,061 Other liabili t ies (as reclassified) 153 80 45 86 181 547 Total 53,667 2,980 4,685 6,014 225 67,571 Irrevocable und r awn credit commitments - 8 71 990 554 1,624
Company
31/12/2023
Up to 1 month
1 - 3 months
3 - 12 months
1 - 5 years
Over 5 years
Total
Other borrowed funds
-
28
439
525
-
992
Other liabilities
-
2
21
-
-
23
Total
-
29
460
525
-
1,015
Irrevocable undrawn credit commitments
-
-
-
-
-
-
Company
31/12/2022
Up to 1 month
1 - 3 months
3 - 12 months
1 - 5 years
Over 5 years
Total
Other borrowed funds
-
28
39
994
-
1,061
Other liabilities
-
44
6
-
-
51
Total
-
72
45
994
-
1,111
Irrevocable undrawn credit commitments
-
-
-
-
-
-
4.13 Transfers of financial assets
As of 31 December 2023 and 2022, the carrying amount of transferred financial assets, which continue to be recognized in
their entirety on the Group’s Statement of Financial Position, inclusive of the associated liabilities, are presented in the
following tables:
31/12/2023 Transferred assets Associated liabilities Carrying amount Carrying amount Group Company Group Company Financial assets at FVTPL 9 - 9 - Loans and advance s to customers 9,839 - 5,069 - Financial assets at FVTOCI 41 - 37 - Debt securities at amortised co st 462 - 395 - Total 10,350 - 5,510 -
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301
Transferred assets Associated liabilities 31/12/2022 Carrying amount Carrying amount Group Company Group Company Financial assets at FVTPL 55 - 54 - Loans and advance s to customers 10,833 - 6,489 - Financial assets at FVTOCI - - - - Debt securities at amortised co st 427 - 337 - Total 11,316 - 6,881 -
Transactions whereby financial assets are transferred but continue to be recognized in their entirety on the Group’s
Statement of Financial Position relate to Eurosystem funding under the general terms applying to such agreements, and
securities sold under agreements to repurchase, which are conducted under GMRAs. With respect to Eurosystem funding,
a haircut is generally applied to the collateral, which results in the associated liabilities having a carrying value less than the
carrying value of the transferred assets. The Group is unable to use, sell or pledge the aforementioned assets during the
term of the transaction and remains exposed to interest rate risk and credit risk on these assets. The counterparty’s
recourse is not limited to the transferred assets.
The Group has not transferred financial assets that are not subject to derecognition in full but remain on the Statement of
Financial Position to the extent of continuing involvement or were derecognized in full, but continuing involvement exists.
The subsidiary that contributes to the Group amounts is Piraeus Bank S.A.
4.14 Financial instruments not measured at fair value
The following tables summarise the fair values and carrying amounts of those financial instruments, which are not
measured at fair value on a recurring basis and their carrying amount is not a reasonable approximation of fair value.
Carrying Fair Value Amount Group 31/12/2023 31/12/2023 Level 1 Level 2 Level 3 Financial assets Loans and advance s to customers at amortised cost 37,527 37,061 - - 37,061 Investment securities at amortise d cost 11,659 10,785 7,827 2,958 - Financial li abilities Debt securities in i ssue 1,886 1,946 1,946 - - Other borrowed fun ds 939 935 935 - -
Carrying Fair Value As reclassified Group Amount 31/12/2022 31/12/2022 Level 1 Level 2 Level 3 Financial assets Loans and advance s to customers at amortised cost 37,367 37,007 - - 37,007 Investment securities at amortise d cost 10,844 9,139 6,8 21 2,3 18 - Financial li abilities Debt securities in i s sue 849 774 774 - - Other borrowed fun ds 937 848 848 - -
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Company
Carrying
Amount
Fair Value
31/12/2023
31/12/2023
Level 1
Level 2
Level 3
Financial assets
Investment securities at amortised cost
848
878
-
878
-
Financial liabilities
Other borrowed funds
939
935
935
-
-
Company
Carrying
Amount
Fair Value
31/12/2022
31/12/2022
Level 1
Level 2
Level 3
Financial assets
Investment securities at amortised cost
796
760
-
760
-
Financial liabilities
Other borrowed funds
936
848
848
-
-
The following methods and assumptions were used to estimate the fair values of the aforementioned financial instruments
at 31 December 2023 and 2022.
Loans and advances to customers at amortised cost: Fair value is estimated using discounted cash flow models, taking into
account yield curves observable in the market as of the date of the valuation and adjustments for credit risk.
Investment securities at amortised cost, debt securities in issue and other borrowed funds: Fair value is estimated using
market prices, or, if such is not available, using discounted cash flow models based on current market interest rates offered
for instruments with similar credit quality and duration.
4.15 Financial assets and liabilities measured at fair value
Fair value is the price that would be received to sell a financial asset or paid to transfer a liability in an orderly transaction
between market participants, at the measurement date, under current market conditions.
IFRS 13 establishes a fair value hierarchy that categorises financial instruments into three levels based on the type of inputs
to the valuation techniques used, as follows:
Level 1 inputs comprise unadjusted quoted prices in active markets for identical assets and liabilities that the entity can
access at the measurement date. Level 1 assets and liabilities include debt and equity securities, as well as derivative
contracts that are traded in an active and organized market structure (i.e. exchange listed futures and options). An active
market is a market in which transactions for assets or liabilities take place with sufficient frequency and volume to provide
information on an ongoing basis and are characterized by low bid / ask spreads.
Level 2 inputs comprise observable inputs, other than Level 1 quoted prices, for similar assets or liabilities, quoted prices
in markets that are not active, or other inputs that are observable or can be corroborated by observable market data for
the full term of the instrument. An input is observable if it is developed using market data, such as publicly available
information about events or transactions, and reflects the assumptions that market participants would use when pricing
the asset or liability. Level 2 assets and liabilities include OTC derivatives and securities whose values are determined using
Piraeus Financial Holdings Group – 31 December 2023
303
pricing models, discounted cash flow methodologies, or similar techniques with inputs that are observable in the market
or can be corroborated by observable market data.
Level 3 inputs refer to unobservable inputs, including the entity’s own data which are adjusted, if necessary, to reflect the
assumptions market participants would use in the circumstances. An input is unobservable if, in the absence of market data
availability, it is developed using the best information available about the assumptions that market participants would use
when pricing the asset or liability. Level 3 assets and liabilities include financial instruments whose value is determine d
using pricing models, discounted cash flow methodologies, or similar techniques with inputs that require significant
management judgement or estimation. OTC complex derivatives transactions or structured securities, which are valued
using a non-market standard model, comprising substantial model uncertainty, are classified as level 3 instruments.
The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. The level of the
fair value hierarchy within which the fair value measurement is categorized, is determined on the basis of the lowest input
that is significant to the fair value measurement. For this purpose, the significance of an input as well as model uncertaint y
are assessed against the entire fair value measurement of the instrument.
The following table presents the fair value by hierarchy, of the financial assets and liabilities which are measured at fair
value, on a recurring basis, and continue to be recognized, in their entirety, on the Group΄s and Company’s Statement of
Financial Position at the end of the reporting period, by fair value hierarchy level:
Financial instruments measured at fair value and basis of valuation 31/12/2023 31/12/2022 as reclassified Group Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Financial assets Derivative financial instruments - 191 - 191 - 220 - 220 Financial assets at FVTPL 598 11 - 609 434 114 - 548 Financial assets mandatoril y measured at FVTPL 118 - 116 234 104 - 78 182 Loans and advance s to customers mandatorily measured at FVTPL - - 53 53 - - 52 52 Investment securities at FVTOCI 1,322 39 22 1,383 872 - 25 897 Financial li abilities Derivative financial instruments - 295 - 295 - 410 - 410
Financial instruments measured at fair value and basis of valuation
Company
31/12/2023
31/12/2022
Level 1
Level 2
Level 3
Total
Level 1
Level 2
Level 3
Total
Financial assets
Investment securities measured at FVTOCI
-
-
2
2
-
-
2
2
Transfers between Level 1 and Level 2
Within the year ended 31 December 2023, € 4 million of bonds issued by corporations were transferred from Level 2 to
Level 1, due to change in their trading activity, while no transfers of financial assets from level 1 to level 2 occurred during
the year ended 31 December 2023. There were no transfers of financial liabilities between Level 1 and Level 2 during the
Piraeus Financial Holdings Group – 31 December 2023
304
years ended 31 December 2023 and 31 December 2022. Transfers between levels of fair value hierarchy are deemed to
have occurred at the end of the reporting period, in which the financial instruments were transferred.
Level 3 financial instruments
Level 3 financial instruments include:
a) Credit impaired loans and advances to customers, which are mandatorily measured at FVTPL because their
contractual cash flows are not SPPI, are valued using an income approach expected cash flow (expected present
value) technique incorporating unobservable inputs.
b) Financial assets mandatorily measured at FVTPL, including contingent and variable consideration assets recognized
following the disposal of NPE portfolios, the fair value of which was estimated at € 67 million (i.e. Senna, Sunshine),
for which the models used to estimate their fair value utilize significant unobservable inputs (e.g. discount rate,
volatility, expected cash flows etc.).
c) Mutual funds and closed end funds, which do not meet the definition of an equity instrument under IAS 32 and
are mandatorily measured at FVTPL, for which the models used to estimate the fair value are price-based and the
price is obtained from the fund manager.
d) Equity securities at FVTOCI and FVTPL, which are not traded in active markets and their fair value is estimated on
the basis of the available information using an income or market approach, for which the main inputs used are
earnings forecasts, comparable multiples, net asset value, adjusted equity and other parameters which are not
market observable, as well as estimations that may adjust these values.
e) Contingent convertible instruments for which the trigger of conversion to equity is based on non-market
observable triggers.
f) Subordinated notes of the Sunrise I, ΙΙ and III, Phoenix and Vega I, II, III securitizations retained by the Group as at
31 December 2023 classified within line item“Loans and advances to customers mandatorily measured at FVTPL”,
which have been valued using multiple valuation techniques incorporating significant unobservable inputs.
During the years ended 31 December 2023 and 31 December 2022, there were no transfers into or out of Level 3. The
following table presents a movement of Level 3 fair value measurements for the aforementioned periods:
Piraeus Financial Holdings Group – 31 December 2023
305
Group Movement of Level 3 instruments Loans and Financial assets advances to Investment mandatorily customers securities measured at mandatorily measured at FVTPL measured at FVTOCI FVTPL Opening balance as at 1/1/20 22 93 77 22 Gain/ (loss) recogni sed in the income statement or OCI (26) - - Additions 29 - 3 Disposals (22) (25) - FX differences 5 - - Closing Balance as at 31/12/2022 78 52 25 Gain/ (loss) recogni sed in the income statement or OCI (13) 1 (2) Additions 86 1 2 Disposals (35) (1) (3) Closing Balance as at 31/12/2023 116 53 22
Company
Movement of Level 3 Instruments
Financial assets
mandatorily
measured at
FVTPL
Loans and
advances to
customers
mandatorily
measured at
FVTPL
Investment
securities
measured at
FVTOCI
Opening Balance as at 1/1/2022
9
26
-
Gain/ (loss) recognised in the income statement or OCI
-
(1)
-
Additions
-
-
2
Disposals
(9)
(25)
-
Closing Balance as at 31/12/2022
-
-
2
Closing Balance as at 31/12/2023
-
-
2
Valuation Process and Control Framework
The Group has established appropriate processes and internal controls to ensure that the fair values of its financial assets
and liabilities are reasonably estimated. The fair value measurements are determined by functions of the Group that are
independent of the Risk Management Unit.
The fair values of bonds are determined either by reference to prices for traded instruments in active markets, to external
quotations or widely accepted financial models, which are based on market observable or unobservable information where
the former is not available, as well as relevant market based parameters such as interest rates, option volatilities, currency
rates, etc. The Group may, sometimes, also utilize third-party pricing information, and perform validating procedures on
this information to the extent possible or base its fair value on the latest transaction prices available, given the absence of
an active market or similar transactions or other market observable inputs. Such instruments are categorised within the
lowest level of the fair value hierarchy (i.e. Level 3). The fair value measurement of debt securities, including significant
inputs on the valuation models, is performed by Middle Office and independently validated by GRM on a systematic basis.
Piraeus Financial Holdings Group – 31 December 2023
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The Group mainly engages in plain vanilla derivative products, hence, the valuation models utilised are fairly standard
across the industry. Inputs to valuation models are determined based on market observable information wherever possible.
CCR adjustments are applied on all OTC derivatives. Th e Group calculates a separate Credit Value Adjustment (“CVA”) for
each counterparty to which the Group has exposure. The CVA is estimated considering expected exposures generated using
simulation techniques (i.e. Monte Carlo simulation), as well as ISDA master netting agreements and collateral postings
under CSA contracts. With respect to own credit risk, the Group estimates a Debt Value Adjustment (“DVA”) by applying a
methodology symmetric to the one applied for CVA. The bilateral CVA (“BCVA”) is based on implied probabilities of default,
derived from credit default swaps (“CDS”) spreads observed in the market, or, if these are not available, from appropriate
proxies. As of December 2023 and 2022, the BCVA was immaterial.
On a systematic basis, adequate control procedures are in place for the validation of these models, including the valuation
inputs. The Group’s Middle Office and GRM provide the control valuation framework necessary to ensure that the fair
values are reasonably determined, reflecting current market circumstances and economic conditions. Furthermore, under
European Markets and Infrastructure Regulation (“EMIR”) regulation, the valuation of interbank OTC derivatives is
reconciled on a daily basis with counter parties’ valuations, under the daily collateral management process.
Quantitative information for the Level 3 fair value measurements of the Group as at 31 December 2023 and 2022:
2
3
Fair Fair Range of Inputs Range of Inputs Value Value Significant Valuation Financial instruments¹ Unobservabl 2023 2022 Technique 2023 2022 e Input Low High Low High Monte Carlo Revenue 15% 15% 15% 15% simulation volatility Discounted Discount rate 14% 14% 14% 14% Financial assets mandatoril y measured at Cash Flows Risk premium FVTPL – Contingent & vari able 67 42 Expected cash 6% 6% n/a n/a consideration s flows 2 n/a 2 n/a 2 n/a n/a 3 3 3 3 n/a n/a n/a n/a Income, n/a Financial assets mandatoril y measured at market FVTPL and FVTOCI – equity securi ties, 70 59 approach mutual funds 4 4 4 100%0%100%Discounted Credit risk 0%Cash Flows adjusted Loans and advance s to customers 47 46 expected cash mandatorily measured at FVTP L – Other flows
4
1
Includes financial instruments with an individual fair value higher than € 5 million at the end of the reporting period.
2
The expected Cash Flows throughout the earn-out calculation period are commercially sensitive and are not included in the table, given that disclosing
them would be detrimental to the Group’s interests.
3
Mainly refers to equity participations of the Group in the share capital of private companies, thus the respective shares are not traded in active markets.
In the absence of an active market, the fair value of these securities is estimated using an income or market valuation approach. Given the bespoke
nature of the valuation method in respect of each equity shareholding, it is not practicable to quote a range of unobservable inputs. The changes in the
value do not materially affect the Group΄s results and assets.
4
Represented as percentage of the loan’s gross carrying amount.
Piraeus Financial Holdings Group – 31 December 2023
307
Reasonably possible assumptions, other than the aforementioned used for determining unobservable inputs of Level 3
instruments, would not have a significant effect on the Group’s financial assets and liabilities measured at fair value on a
recurring basis.
4.16 Capital adequacy
The main objectives of Management with respect to capital adequacy are the following:
• To comply with the capital requirements against risks undertaken, according to the regulatory framework;
• To preserve the Group’s ability to continue its operations unhindered, thus to continue providing return s and
benefits to its shareholders and ensure the confidence of its customers;
• To retain a sound and stable capital base in order to support the Group’s Business Plans; and
• To maintain and enhance existing infrastructures, policies, procedures and methodologies for the adequate
coverage of supervisory needs, in Greece and abroad.
The Group currently complies with the CRD IV regulatory framework (Basel III implementation under EU rules), which came
into force with Directive 2013/36/EU as transposed into Greek Law 4261/2014 (amended by Law 4799/2021) and
Regulation (EU) No. 575/2013 as it is currently in force.
The aforementioned regulatory framework requires financial institutions to maintain for the Group a minimum level of
regulatory capital related to the undertaken risks. The minimum thresholds for the capital adequacy ratios, as per article
92 of the CRR2, are as follows:
Group
Common Equity Tier 1 (CET1) Ratio
4.5%
Tier 1 (T1) Ratio
6.0%
Total Capital Ratio (TCR)
8.0%
Following the activation of the SSM on 4 November 2014, the Group was placed under the direct supervision of the ECB.
The ECB, through the SREP decision on 14 December 2022, informed Management on the revised OCR levels, effective
since 1 January 2023. The Group has to maintain, on a consolidated basis, a TSCR of 11% and an OCR of 14.57% (OCR plus
P2G 16.32%), which includes:
a) the minimum Pillar I total capital requirements of 8.0% as per article 92(1) of the CRR;
b) an additional Pillar II capital requirement of 3.0% as per article 16(2) of Regulation 1024/2013/EU;
c) the CCB of 2.5% under Greek Law 4261/2014, as amended by Greek Law 4799/2021;
d) the O-SII capital buffer of 1.0% for 2023 under Greek Law 4261/2014, as amended by Greek Law 4799/2021; and
e) the institution specific CCyB under Greek Law 4261/2014 (as amended by Greek Law 4799/2021) of 0.07% for the
Piraeus Financial Holdings Group – 31 December 2023
308
year ended 31 December 2023.
The capital adequacy ratios as at 31 December 2023 and 2022 for the Group, as calculated under the existing regulatory
framework, taking into account the relevant transitional period provisions applicable under Regulation 575/2013 are as
follows:
Group 31/12/2023 31/12/2022 Ordinary shares 1,163 1,163 Share premium 3,255 3,555 Less: Treasury shares (15) - Other reserves and retaine d earnings 2,217 1,235 Minority Interest 56 28 Less: Intangible assets (230) (217) Other regulatory adju stments (2,118) (1,699) Common Equity Tier 1 Capital (C ET1) 4,327 4,064 Additional Tier 1 instruments 600 600 Total Additional Tier 1 Capital 600 600 Tier 1 Capital (Α) 4,927 4,664 Subordinated d ebt 895 893 Total Tier II Capital (B) 895 893 Total regulatory capital (Α) + (Β) 5,822 5,557 Total RWAs (on and off- balance sheet items) 32,765 31,178 CET1 Capital ratio 13.21% 13.04% T1 Capital ratio 15.04% 14.96% Tοtal Capital ratio 17.77% 17.82%
As at 31 December 2023, the TCR for the Group stood at 17.77% and the CET1 ratio stood at 13.21%, covering the minimum
OCR levels. CET1 includes also specific prudential adjustments in accordance with article 3 of the CRR and supervisory
expectations (inclusive of any NPE stock / Addendum calendar shortfall, which is also related to government guaranteed
exposures). The Bank is expected to apply a prudential treatment for the Greek State-Guaranteed Exposures, to be assessed
with a reference date of 31 December 2024 and compliance to be confirmed in the context of the SREP decision of 2025.
In accordance with the supervisory expectations, the Bank is required to apply the minimum NPE coverage level in
alignment with the SREP recommendation on the coverage of the NPE stock and the Addendum to the ECB Guidance to
banks on non-performing loans, to such Greek State-Guaranteed Exposures. The net book value of these exposures
amounted to € 687 million as at 31 December 2023. This prudential treatment does not affect the respective accounting
treatment.
The Αdditional Tier 1 instruments (“ΑΤ 1 Instrument”) compr ise notes issued by the Company on 16 June 2021 with total
nominal value € 600 million. The ΑΤ 1 Instrument is perpetual and redeemable at the full discretion of the Company, from
16 June 2026 to 16 December 2026 (the initial call date) and on any subsequent coupon payment date. The respective note
bears a fixed coupon of 8.75% payable semi-annually in arrears, until the first call date, and resets to 9.195% plus the then
Piraeus Financial Holdings Group – 31 December 2023
309
prevailing 5-year mid swap rate every five years thereafter. The Company has the right to cancel all or part of any payment
of interest, on any interest payment date and for any reason, at its sole discretion.
4.17 Risks related to the recognition of the main part of deferred tax assets as claims (Deferred Tax Credits)
against the Greek State as regulatory capital or as an asset
The calculation of the capital adequacy ratios of the Group, takes into account the DTA which have been recognised on the
basis of the relevant provisions of the IFRS. As at 31 December 2023 the DTA of the Group amounted to € 5,703 million (31
December 2022: € 5,974 million). At each reporting date, the Group and the Company review the carrying amount of the
deferred taxation, which is likely to lead to a change in the amount of DTA recognised in the Statement of Financial Position,
and consequently affect the calculation of the capital adequacy ratios. Under the current directive about the capital
adequacy (“CRD IV”), DTA are deducted from the CET1 capital, if they exceed specific limits.
Under the provisions of Greek Law 4172/2013, Article 27A, as amended by Greek Law 4465/2017 and being currently in
effect, DTA of Greek financial institutions, as well as DTA of leasing and factoring companies, that have been recognized
due to losses from the PSI and accumulated provisions due to credit risk in relation to existing loans and advances to
customers as of 30 June 2015, as well as the accounting write offs and final losses due to permanent write offs or
restructuring of debts under certain conditions, will be converted from 2017 onwards into directly enforceable claims (Tax
Credit) against the Greek State, provided that the financial result under IFRS, is a loss from the fiscal year 2016 onwards.
This claim will be offset against the relevant amount of income tax of the legal person or companies of the same corporate
group (associated companies) of the tax year the approved financial statements refer to. When the amount of income tax
is insufficient to offset the above claim, any remaining claim will give rise to a direct refund right against the Greek State.
Simultaneously, equivalent conversion rights are granted to the Greek State for the issuance and delivery of ordinary shares.
Existing shareholders have option to buy the conversion rights from the State. Furthermore, a gradual amortization over a
20-year period of the final tax losses arising from write-offs and disposals is provided, maintaining the DTC status during all
this period, while it disconnects the accounting write-offs from final debt write-offs.
As at 31 December 2023, the DTA of the Group that meets the provisions of article 27 of Law 4172/2013, as currently in
force i.e. is eligible for Deferred Tax Credit (“DTC”), amounted to € 3,303 million (31 December 2022: € 3,541 million), of
which € 995 million relates to unamortised PSI losses (31 December 2022: € 1,050 million) and € 2,308 million relates to
temporary differences between the IFRS carrying amount and tax base of loans and advances to customers (31 December
2022: € 2,491 million).
In addition, refer to Note 3.2 for the key sources of estimation uncertainty in regards with the recoverability of DTA. The
recognition of DTA may be adversely affected by: a) the future reduction of income tax rates, b) the adverse change of the
regulations governing the treatment of DTA for regulatory capital purposes and c) any adverse change in the interpretation
of the aforementioned legislative amendments by the EC. In case where any of the aforementioned risks occur, it would
probably have an adverse effect on the adequacy of the Group’s regu latory capital ratios.
4.18 IBOR Reform
In 2021, the Group established an internal Benchmark Rates Reform Working Group (the “BR Working Group”), led by
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310
senior representatives from the Bank’s business units, in order to manage the transition to the new risk-free rates (“RFRs”),
mitigate any related risks and comply with the regulatory requirements of the EU 2016/1011 – EU Benchmark Regulation
(“EU BMR”). In this context, the IBOR reform process for CHF / GBP / JPY related contracts was completed successfully.
In addition to the above, in 2021 the Group initiated all necessary actions relating to the new USD risk-free reference rate
definition (“USD SOFR”) in order to replace the USD LIBOR Benchmark, expected to cease being representative and
published on 30 June 2023, as per 5 March 2021 FCA Announcement.
In this context, the Bank proceeded to the automatic replacement of the USD LIBOR with the new USD RFR Secured
Overnight Financing Rate (“SOFR”) effective from 3 July 2023, both in its systems and procedures. The Bank also applied
relevant contracts’ amendments, inserting the new RFR SOFR definition and necessary fallback language provisions.
As of 30 June 2023, all financial instruments affected by the IBOR reform, had successfully completed the transition to the
alternative benchmark rates.
Regarding Euro Interbank Offered Rate (“EURIBOR”), it underwent a methodological reform in 2019 to make it compliant
with the regulatory requirements laid down in the EU 2016/1011 –EU BMR. In specific, EURIBOR may continue to be
representative following a hybrid methodology that became applicable at the end of 2019, based on transactions and
expert judgement derived from related markets, if there is no relevant unsecured money market activity. Following the
application of this methodology, the EURIBOR adminis trator (European Money Markets Institute, “EMMI“) has confirmed
that EURIBOR may continue to be used as a reference rate for new and legacy contracts after 1 January 2022.
In October 2022, EMMI issued a press release to start publishing the Euro Forward L ooking Term Rate (“EFTERM”) on 14
November 2022. The EFTERM rate will be an alternative interest rate (fallback rate) for EURIBOR in accordance with the
provisions of Regulation (EU) 2016/1011 (Benchmark Regulation). The Group, assessing the future possibility of EURIBOR
reform, has initiated preparatory work for the adjustment of the respective contracts, by introducing fallbacks provisions
to cover the possibility of the abolition of EURIBOR and its replacement by a new reference interest rate.
IBOR reform does not have any impact on the active FVH accounting relationships of the Group as of 31 December 2023,
considering that the hedging instruments used are referenced to Euribor rates which are not subject to the contemplated
reform.
4.19 Climate Related Matters
Assessing Climate and Environmental Risk
The Group has established a comprehensive Risk Management Framework to identify, measure, control, and mitigate
underlying risks, including C&E risks. The annual Risk Identification (“RID”) process is applied to identify the relevant and
material risks, by taking into consideration the environment in which it operates and its business model. The risks that are
expected to have a substantive financial or strategic impact on the Group’s busi ness are deemed material. The materiality
assessment could be performed on a quantitative or qualitative basis or through a combination of both. During the RID
exercise, “climate change” (physical & transition risks) has been recognized as a risk driver for many key risk categories (i.e.
credit, market, liquidity, operational, business & strategic, and reputational risks), and ESG and climate-related risks have
been identified as a standalone risk subcategory. Moreover, since the Group recognizes that climate change-related risks
Piraeus Financial Holdings Group – 31 December 2023
311
are expected to intensify in the longer term (i.e. over the next five years), it has launched several initiatives to take account
of environmental considerations in its business targets, strategies, risk management framework, and decision-making
processes.
The Group, has already identified the business functions across all Three Lines of Defense related to or affected by C&E
risks and the respective policies in order to map any gaps and ensure that climate and ESG aspects are incorporated
accordingly. In this context, a group-wide program has been initiated and separate workstreams are formed to support
responsible Business Units to review policies under their ownership through C&E lens.
The Group has assessed its exposure to climate-sensitive sectors, areas, and clients and formed the basis for materiality
analysis in terms of credit, market, liquidity, operational, reputation, and business & strategic risks. The analysis is base d
on potential impact from climate-related risks on the Group’s material portfolios representing the majority of its exposures
(i.e. business portfolio and immovable property held as collateral), using quantitative and qualitative analyses. Based on it s
internal classification methodology, the Group has conducted an analysis in order to determine the materiality of the
impact of C&E risks on its main risk categories. More specifically:
Credit Risk: for credit risk the materiality assessment focuses on the Group’s business portfolio and on its immovable
properties’ portfolio. For the business portfolio, the Group analyzed its exposure in climate sensitive sectors, for both
physical and transition risk, its distribution across asset classes and business lines, the average weighted maturity of these
exposures and their credit quality, and the existence or not of counterparties’ transition plans. On the immovable
properties’ portfolio, an analysis was performed related to transition risk, assessing the collaterals’ Energy Performance
Certificate (“EPC”) label distribution and loan-specific factors such as the counterparty’s credit quality and business segment
as well as physical risk, where the analysis focused on the collateral pool’s distribution in high risk geographical areas an d
factors such as LTV ratio and insurance coverage for extreme events (e.g. earthquakes, floods, wildfires). Based on this
analysis, the increase in the risk profile is currently considered immaterial. Notwithstanding, as the effects of climate change
in the future may be intensified, the risk profile may be substantially increased.
Market Risk: Group’s trading book contains limited exposure to non-financial corporates (especially to corporates falling in
the high-risk perimeter), hence any potential impact would be immaterial. The assessment is also based on the Group’s
business model and its intention to contain its exposures in the trading book. The Group will closely monitor and re-assess
the potential impact when deemed necessary.
Liquidity Risk: For the materiality assessment of Liquidity Risk, the Group has assessed the following main drivers:
▪ the impact of climate change on the market values of trading instruments;
▪ the non-tradable/ECB eligible exposures (i.e. pools of credit claims) used as collateral for refinancing through the
ECB, via credit deterioration due to physical and transition climate risks; and
▪ the corporate deposit base.
The overall impact on liquidity risk is expected to be immaterial, based o n the Group’s business model, book structure
and nature of exposures.
Piraeus Financial Holdings Group – 31 December 2023
312
Operational Risk: A historical analysis has been performed on actual operational risk events, resulting in an immaterial
increase in the Group’s risk profile in the short-term. With the implementation of its Geographic Information System
(“GIS”) the Group aims at strengthening its scenario analysis capabilities (especially for physical risk), in order to enhanc e
its materiality assessment in the medium- and longer-term horizons and update the relevant policies and frameworks
accordingly. The GIS will serve as a tool for assessing climate physical risks as it allows the Group to integrate and analyz e
different types of spatial data related to climate and hazards and combine it with climate scenario analysis.
The Group will continue to review and enhance the materiality assessment process based on its evolving scenario analysis
capabilities and methodologies and as more granular data become available.
5 Segment analysis
The CEO, supported by the Group Executive Committee members, is considered the Chief Operating Decision Maker for
the purposes of identifying the Group’s reportable segments.
The Group manages its business through the following reportable segments:
Retail Banking – Includes Mass, Affluent, Small Businesses, International Business Unit (“IBU”) and Public core customer
segments, as well as channels of banking activity (i.e. branches, e-branches, ATMs etc.).
Corporate Banking – Includes Large Corporates, Shipping, SMEs and Agricultural Core customer segments.
Piraeus Financial Markets (“PFM”) – Includes the Fixed Income, Foreign Exchange, Treasury activities (including the interest
rate gap management arising from all banking activities) and Institutional Clients.
Other – Includes all management related activities not allocated to specific customer segments, management of REO assets,
Wealth and Asset Management (“WAM”) activities, certain equity participations of the Group, funding transactions
approved by the Asset and Liability Management Committee (“ALCO”) and intersegmental eliminations.
NPE Management Unit (“NPE MU”) – Includes the management of any NPE assessed as non-core business, irrespectively
of whether the said exposures are serviced by the Group or third parties. In addition, following the derecognition of
Phoenix, Vega I, II, III, Sunrise I, II and III securitized portfolios, this reportable segment includes also the senior and
subordinated notes issued by the securitization SPVs and retained by the Group. The fees payable for servicing the Group’s
NPE portfolio are recognized within this segment. Furthermore, the respective segment includes certain equity
participations classified in either FVTOCI or FVTPL and certain associates (i.e. Strix Asset Management Ltd, Strix Holdings LP
and Strix Holdings II LP).
Business segments include internal allocations of income and expense based on an internally approved methodology. These
allocations include, among other, the costs of certain support services and functions to the extent that they can be
meaningfully attributed to the reportable business segments. Such allocations are made on a systematic and consistent
basis and involve a degree of subjectivity. Costs that are not allocated to business segments are included in Corporate
Centre (reported under business segme nt “other”).
Piraeus Financial Holdings Group – 31 December 2023
313
Where relevant, income and expense amounts presented include the results of inter-segment funding along with inter-
company and inter-business line transactions. All inter-company transactions between business segments are undertaken
on arm’s length basis and inter-segment transactions and balances are eliminated within each relevant segment.
An analysis of the results and other financial information per business segment of the Group is presented below.
Piraeus Financial Holdings Group – 31 December 2023
314
NPE MU
Group
“Core” Segment s 1/1 - 31/12/2023 Corporate Retail Banking PFM Other Total Banking Net interest i nc ome 961 61 5 40 1 46 2,022 (20) 2,003 Net fee and commission income 244 188 9 21 462 6 468 Income from non-bankin g activities - - - 73 73 5 79 Net gain / (lo sses) from de recognitio n of f inancial i ns truments mea sured at amortised c ost (1) 2 (2) - (1) (1) (1) Net other incom e/ (expe nses) (2) 2 38 (4) 33 26 59 Total Net Incom e 1,202 80 7 44 7 13 5 2,590 17 2,607 Total operati ng expen s es (480) (189) (4 7) (9 8) (815) (48) (863) Profit / (loss) before provisions, impairment and other cred it-risk related exp enses 721 61 7 399 37 1,775 (31) 1,744 Impairment (l oss es) / re leases on loans and ad vances to c ustomers at amorti s ed cost (4) (76) - (3) (84) (320) (404) Οther credi t-risk related e xpenses on loan s and advan ces to customers at am ortised cost (31) (47) - - (78) (58) (136) Impairment l oss es on othe r assets - - - (52) (52) - (52) Impairment o n subsidiari es and associates - - - (1) (1) - (1) Impairment o f propert y and equipme nt and intangible assets - - - (8) (8) (21) (29) Impairment re leases on debt secu rities at amortised co s t - - 9 - 9 - 9 Other provisio n (char g es)/ release s 1 (1) - (35) (35) (4) (38) Share of profi t/ (loss) of associate s and joi nt ventures - - - (2) (2) (14) (15) Profit/ (loss) before income tax 687 49 4 408 (6 3) 1,526 (447) 1,078 Income tax ex pense (292) Profit for th e year fr om continu i ng ope rations 786 Profit for th e year 786 As at 31/12/2 023 Total assets f rom conti nuing operati ons (ex cluding assets he ld for s ale & inv estments in ass oc iated undertakin gs and joint ve ntures) 11,953 22,724 26,091 6,5 26 67,294 7,660 74,955 Assets held for sale 1 4 - - 5 236 241 Investments in associat ed underta kings and joint v entures - - - 37 37 1,218 1,255 Total assets 11,955 22,727 26,091 6,5 63 67,3 37 9,1 14 76,450 Total liab ilities 44,8 42 14,5 85 5,954 3,2 02 68,583 51 4 69,097
Piraeus Financial Holdings Group – 31 December 2023
315
“Core” Segment s (1)1/1 - 31/12/2022 A s reclassified NPE MU Group Corporate Retail Banking PFM Other Total Banking Net interest i nc ome 536 442 245 162 1,384 (32) 1,353 Net fee and commission income 226 168 8 14 415 6 421 Income from non-bankin g activities - - - 58 58 6 64 Net gain/ (lo sses) from de recogni tion of financial i ns truments mea sured at amortised c ost - - (17) 1 (16) (18) (34) Net other incom e/ (expe nses) 282 - 506 (10) 779 - 779 Total Net Incom e 1,044 610 742 225 2,620 (39) 2,582 Total operati ng expen s es (483) (188) (60) (105) (836) (53) (889) Profit/ (loss) before provisions, i mpair ment and other credit-risk related e xpenses 561 421 683 119 1,785 (92) 1,693 Impairment (l oss es) /re leases on loans a nd advances to custom ers at amortised c ost 12 89 1 (8) 95 (567) (472) Οther credi t-risk related e xpenses on loan s and advan ces to customers at am ortised cost (28) (33) - (1) (63) (80) (142) Impairment l os ses on othe r assets - - - (47) (47) - (47) Impairment o n subsidiari es and associates - - - (2) (2) - (2) Impairment o f propert y and equipme nt and intangible assets - - - (4) (4) - (4) Impairment l oss es on de bt securities at amortised co s t - - (4) - (4) - (4) Other provisio n (char g es)/ release s 2 4 - (17) (12) (1) (13) Share of profi t / (loss) of associate s and jo int ventu res - - - 6 6 23 29 Profit/ (loss) before income tax 547 482 680 45 1,753 (717) 1,037 Income tax ex pense (140) Profit for th e year fr om continu i ng ope rations 897 Profit after i nc ome tax from dis continued operations - - - 51 51 - 51 Profit for th e year 94 8 (1), (2)As at 31/12/2 022 As reclassified Total assets f rom conti nuing operati ons (excluding as sets held for sale & investments in ass ociated undertakin gs and joint ve ntures) 12,037 21,817 24,371 6,331 64,556 8,6 60 73,2 16 Assets held for sale 4 12 - 17 33 373 406 Investments in associat ed underta kings and joint v entures - - - 54 54 969 1,023 Total assets 12,042 21,829 24,371 6,401 64,643 10,002 74,645 Total liab ilities 42,791 14,319 7,341 3,141 67,593 472 68,064
(1)
In the second quarter of 2023, the Group amended the presentation of DTA within reportable segments. As a result, DTA is allocated in each reportable segment, instead of
presenting the DTA, in its entirety, in the reported segment “Other”. The comparative information has been reclassified accordingly.
(2)
As of 31 December 2023, the Group offsetted derivative assets and liabilities entered into with a central counterparty clearing member against the margin collateral posted or
received and reclassified accordingly the comparatives. The reportable segment affected from the said offsetting is PFM. For further information on the offsetting refer to Notes
4.8 and 49.
Piraeus Financial Holdings Group – 31 December 2023
316
Geographical segment
The Group operates in the following geographical areas: a) Greece, the Company’s country of domicile; b) rest of Europe, which
includes Albania, Bulgaria, Romania, Serbia, Ukraine, Cyprus, United Kingdom, Germany, Netherland and Ireland; and c)
other countries, which include Egypt. To this end, Greece generated 97% of the Group’s net income.
The following table summarises the Group’s net income and non-current assets, with its external customers, across all
geographical areas. The breakdown is based on the location of the respective legal entity.
Net Income Non-current assets Group 1/1 - 31/12/2023 1/1 - 31/12/2022 31/12/2023 31/12/2022 Greece 2,527 2,548 2,550 2,431 Rest of Europe 80 34 286 127 Other countries - - 4 Continuing operations 2,607 2,582 2,836 2,562 Discontinued operations - 84 - -
Piraeus Financial Holdings Group – 31 December 2023
317
6 Net interest income
Group Company Continuing operation s 1/1 - 31/12/2023 1/1 - 31/12/2022 1/1 - 31/12/2023 1/1 - 31/12/2022 Interest and similar i ncome Debt securities measured at FVTOCI 41 31 - - Debt securities at amortised co st 248 187 103 99 Loans and advance s to customers at amortised cost & 1,868 1,203 - Reverse repos Due from banks 24 7 - - Negative intere st from liabilitie s due to ECB - 70 - - Negative intere st from other interest-bearing liab ilities - 4 - - Other 375 74 - - Total interest income for finan cial instruments not 2,556 1,575 103 99 measured at FVTPL Financial instrumen ts measured at FVTPL 34 18 - 7 Derivative financial instruments 209 98 - - Total interest and simi lar income 2,799 1,691 103 106 Ιnterest expense and similar c harges Due to customers and repu rchase agreements (244) (51) - - Debt securities in i s sue and othe r borrowed funds (138) (96) (69) (69) Due to banks (274) (15) - - Contribution of Law 128/75 (52) (54) - - Negative intere st from interest bearing assets - (38) - - Other (2) (3) - - Total interest expense from financial instruments not (710) (256) (69) (69) measured at FVTPL Derivative financial instruments (87) (82) - - Total interest expense (797) (339) (69) (69) Net interest income 2,003 1,353 34 37
The increase in line item “Loans and advances to customers at amortised cost and reverse repos” for the year ended 31
December 2023 compared to the year ended 31 December 2022, is mainly due to interest rate increases of floating rate
loans, following the consecutive ECB interest rate hikes since the second semester of 2022.
Line item “Other” of interest and similar income comprises € 333 million generated from the use of Eurosystem’s deposit
facility, corresponding to overnight deposits with the Central Bank remunerated with the applicable DFR, which increased
to 4.0% from 20 September 2023, following the aforementioned consecutive increases of key interest rates.
Line item “Due to banks” of interest expense and similar charges includes the interest expense streaming from ECB funding,
in the context of the TLTRO III program, amounting to € 182 million. For the comparative period the respective interest
amounted to a total income of € 70 million and was presented in line item “Negative interest from liabilities to ECB”.
Piraeus Financial Holdings Group – 31 December 2023
318
Interest income by credit quality and product line
The table below presents interest income from loans and advances to customers at amortised cost, by credit quality and
product line. During the year ended 31 December 2023 and 2022, no interest income from loans and advances to customers
at amortised cost was recognised by t he Company. 1/1 - 31/12/2023 1/1 - 31/12/2022 Not credit Not credit Group - Continuing operations Credit impaired Credit impaired impaired impaired Stage 1 and 2 Stage 3 POCI Total Stage 1 and 2 Stage 3 POCI Total Retail lending 436 24 17 477 293 17 12 322 Corporate lendi n g 1,306 59 17 1,382 762 97 19 878 Public sector len ding 9 - - 9 4 - - 4 Total Interest income 1,752 82 34 1,868 1,059 114 31 1,203
7 Net fee and commission income
Group Company Continuing operation s 1/1 - 31/12/2023 1/1 - 31/12/2022 1/1 - 31/12/2023 1/1 - 31/12/2022 Fee and commission income Commercial bankin g 481 449 47 44 Investment bankin g 29 26 - - Asset management 44 33 - - Total fee and commissi on income 554 508 47 44 Fee and commission expense Commercial bankin g (77) (79) (35) (30) Investment bankin g (8) (6) - - Asset management (1) (1) - - Total fee and commissi on ex pense (86) (87) (35) (30) Net fee and commission income 468 421 12 14
a. Fee and commission income
The Group and the Company classify revenue from contracts with customers based on the type of services provided.
Management believes that this classification reflects how the nature, quantity, timing and uncertainty of the Group's and
the Company’s income and cash flows are affected by financial factors.
The tables below present total fee and commission income from contracts with customers of the Group and the Company,
for the years ended 31 December 2023 and 2022, per product type and business segment.
Piraeus Financial Holdings Group – 31 December 2023
319
Group Fee and Commission income Corporate 1/1 - 31/12/2023 Retail Banking PFM Other NPE MU Total Banking Acquiring 1 1 - - - 2 Asset management/Broke rage 39 2 10 16 - 67 Bancassurance 39 5 - 10 1 55 (1)Cards Issuance 71 10 - - 2 83 (1)Deposits commissions 9 1 - - - 10 Funds transfer 61 24 - 9 1 95 Letters of guarantee 3 42 - 1 1 47 Loans and advance s to customers (1)12 88 - - 1 101 Payments 20 4 1 1 - 26 FX fees 23 7 1 - - 31 Other 21 10 - 5 - 36 Total 298 195 12 42 6 554
Group Fee and Commission income Corporate 1/1 - 31/12/2022 Retail Banking PFM Other NPE MU Total Banking Acquiring 9 5 - - - 14 Asset management/Broke rage 31 3 9 8 - 51 Bancassurance 33 4 - 14 1 52 (1)Cards Issuance 60 8 - - 2 70 (1)Deposits commissions 8 1 - - - 9 Funds transfer 61 17 - 3 1 82 Letters of guarantee 3 34 - 1 2 40 Loans and advance s to customers(1)10 81 - - 1 92 Payments 22 5 1 - - 28 FX fees 27 6 1 - - 34 Other 20 12 - 4 - 36 Total 284 176 11 30 7 508
(1)
Refers to financial assets and financial liabilities carried at amortised cost
Company
Fee and Commission income
1/1 - 31/12/2023
Retail Banking
Corporate
Banking
PFM
Other
NPE MU
Total
Bancassurance
35
5
-
7
-
47
Total
35
5
-
7
-
47
Piraeus Financial Holdings Group – 31 December 2023
320
Company
Fee and Commission income
1/1 - 31/12/2022
Retail Banking
Corporate
Banking
PFM
Other
NPE MU
Total
Bancassurance
29
4
-
11
-
44
Total
29
4
-
11
-
44
b. Other income, within the scope of IFRS 15
As presented in the tables below, other income that falls within the scope of IFRS 15, corresponding to contracts with
customers of the Group, for the year ended 31 December 2023 and 2022, amounted to € 90 million and € 44 million,
respectively. The said amounts are included within line item “Net other income/ (expenses)” of the Income Statement,
inclusive of other expenses, as well as losses from the sale of investment property and other assets.
Group Other Income Retail Corporate 1/1 - 31/12/2023 PFM Other NPE MU Total Banking Banking Other operating income - - - 11 69 80 Gain from sale of investmen t property - - - 2 - 2 Gain from sale of other assets - - - 8 - 8 Total - - - 21 69 90
Group Other Income Retail Corporate 1/1 - 31/12/2022 PFM Other NPE MU Total Banking Banking Other operating income - - 13 22 1 36 Gain from sale of investmen t property - - - 2 - 2 Gain from sale of other assets - - - 5 1 6 Total - - 13 29 2 44
For the Company, the respective income for the year ended 31 December 2023 and 2022 is immaterial.
8 Income from non-banking activities
For the year ended 31 December 2023, income from non-banking activities at Group level includes rental income from
investment properties of € 73 million (31 December 2022: € 58 million), while the respective amount for the Company is
nil for the years ended 31 December 2023 and 2022.
Piraeus Financial Holdings Group – 31 December 2023
321
9 Net gains / (losses) from financial instruments measured at FVTPL
Group Company Continuing operation s 1/1 - 31/12/2023 1/1 - 31/12/2022 1/1 - 31/12/2023 1/1 - 31/12/2022 Gains / (losses) from de bt securities 21 (73) - - Gains / (losses) from othe r financial i nstruments 2 432 - (8) Net income from financial instruments measured a t FVTPL 23 359 - (8) Line item “Gains / (losses) from debt securities” for th e year ended 31 December 2023 in cludes mainly gain s of € 24 million,
related to disposal and fair value changes of Greek Government Bonds (“GGBs”) and Greek treasury bills (31 December
2022: losses of € 54 million). The variance in line item “Gains/ (losses) from other financial instruments” is mainly
attributable to gains from derivatives recognised in the previous year.
10 Net gains / (losses) from financial instruments measured at FVTOCI
The Group’s net gains from derecognition of financial instruments measured at FVTOCI for the year ended 31 December
2023 amounted to € 2 million (31 December 2022: € 111 million), mainly derived from the disposal of GGBs and Greek
treasury bills, with total nominal value of € 498 million (31 December 2022: € 1,363 million).
11 Net other income / (expenses)
Group Company Continuing operation s 1/1 - 31/12/2023 1/1 - 31/12/2022 1/1 - 31/12/2023 1/1 - 31/12/2022 Gains / (losses) from fair valu e remeasuremen t of investment prope r ty (Note 28) 21 38 - - Other net income / (loss) (21) (9) (1) (1) Total net other income / (expense) - 29 (1) (1)
Piraeus Financial Holdings Group – 31 December 2023
322
12 Staff costs
Group Company Continuing operations 1/1 - 31/12/2023 1/1 - 31/12/2022 1/1 - 31/12/2023 1/1 - 31/12/2022 Wages and salarie s (287) (299) (2) (2) Social insurance contributions (59) (62) (1) (1) Other staff costs (2 5) (23) - - Voluntary redu ndancy costs (6 2) (57) - - Retirement benefi t charges (5) (5) - - Share based payments (4) - - - Total (442) (446) (3) (3)
In accordance with its strategic objectives and transformation priorities, the Group initiated in 2023 a new Voluntary Exit
Scheme (“VES”) for certain group of employees. As a result, voluntary redundancy costs of € 62 million increased staff costs
during 2023. The Group’s and the Company’s FTEs from continuing operations as of 31 December 2023 was 8,087 and 30,
respectively (31 December 2022: 8,658 and 33, respectively). The number of FTEs who exited voluntarily in 2023, making
use of the 2023 and 2022 VES, stood at 538.
Share based payments
On 27 June 2023 the AGM approved the free offer of the Company’s common shares to executives and personnel of the
Company and its affiliated entities, acquired through a share buy-back program. In September 2023, the Company executed
the share buy-back by acquiring 5,283,004 treasury shares at an average cost of € 2.84 per share.
On 1 December 2023, the Company, in implementation of the aforementioned AGM decision and following relevant
resolutions of the BoD on 19 October 2023, established two Group share-based payment variable remuneration schemes,
namely the “Top Management Retention Scheme” and the “Performance Incentive Scheme”, collectively the “Free
Distribution of Own Shares”.
The objective of the “Top Management Retention Scheme” is to strengthen the commitment of the Group’s senior
management to the organization and to ensure further alignment with the long-term strategy of the Group. The total
reward of the scheme was granting of 2,393,454 common shares of the Company for free, of which 40% fully vested and
60% vesting evenly throughout the next 5 years subject to service condition.
The objective of the “Performance Incentive Scheme” is to further incentivize the Group’s personnel and reward their
performance and contribution to the achievement of the Group’s strategic objectives. The total reward of the scheme was
granting 358,489 common shares of the Company for free, of which only a small part is subject to service vesting conditions
throughout a 3-year period.
Both schemes are accounted for as equity settled share-based arrangements since settlement occurs in the Company’s own
equity instruments. The fair value of the common shares granted was determined based on the closing price of the
Company’s shares in the Athens Stock Exchange on 1
st
December 2023, the grant date of both schemes. As at 31 December
2023, the impact of the “Free Distribution of Own Shares” was an increase in the Group’s staff costs and retained earnings
by € 4 million, while equity was not affected.
In December 2023 the treasury shares reserve and retained earnings decreased by € 4 million for the awarding of 1,307,585
fully vested shares (refer to Note 42).
Piraeus Financial Holdings Group – 31 December 2023
323
13 Administrative expenses
Group Company Continuing operation s 1/1 - 31/12/2023 1/1 - 31/12/2022 1/1 - 31/12/2023 1/1 - 31/12/2022 Taxes and duties (71) (75) (1) (1) Promotion and adve rtising expenses (28) (25) (1) (1) Fees and third-party expense s (82) (69) (4) (3) Contribution s payable to Deposit Insurance and Resolution Fun ds (20) (59) - - Other administrative exp enses (115) (109) (1) (1) Total (315) (337) (7) (5)
The contributions payable to Deposit Insurance and Resolution Funds mainly comprise of € 19 million ex-ante contributions
to the SRF (31 December 2022: € 25 million). Τhe contribution under the Resolution leg of the Hellenic Deposit and
Investment Guarantee Fu nd (“HDIGF”) is nil for 2023 due to the repayment of the loan that the Resolution Scheme had
obtained from the Deposit Cover Scheme (31 December 2022: € 33 million).
14 Other credit risk related expenses on loans and advances to customers at amortised cost
The Group's other credit risk related expenses on loans and advances to customers at amortised cost for th e year ended
31 December 2023 amounted to € 136 million (31 December 2022: € 142 million), consisting of fees payable for having its
NPE portfolio managed, namely Assets Under Management (“AUM”) fees, success fees and credit protection fees payable
under synthetic securitizations.
For the year ended 31 December 2023 AUM fees, success fees and credit protection fees amounted to € 20 million, € 68
million and € 48 million, respectively (31 December 2022: € 28 million, € 81 million and € 33 million, respectively).
15 Other provision (charges) / releases
The variance of € 25 million against the year ended 31 December 2022, is mainly due to the recognition of a loss amounting
to € 19 million for an option agreement written by the Bank that was exercised in the second quarter of 2023, a fine imposed
by the Hellenic Competition Commission (“HCC”) amounting to € 13 million, and lower provision charges for outstanding
legal claims by € 11 million. In 2019 the HCC conducted several dawn raids at the premises of all Greek systemic banks
(including the Bank), smaller banks and the Hellenic Bank Association investigating potential competition law infringements
in the financial banking sector. Following the conclusion of the settlement procedure prescribed under Greek competition
law, the HCC adopted in December 2023 a decision accepting the settlement proposals submitted by said parties and
imposed reduced fines for certain competition law infringements, amounting to € 42 million, of which € 13 million were
attributable to the Bank.
Piraeus Financial Holdings Group – 31 December 2023
324
16 Income tax benefit / (expense)
Group Company Continuing operation s 31/12/2023 31/12/2022 31/12/2023 31/12/2022 Current tax expense (23) (13) - - Deferred tax benefit / (expe nse) (Note 38) (269) (126) - - Income tax benefit / (expense) (292) (140) - -
Under the tax amendments of Greek Law 4799/2021 corporate income tax rate for legal entities, other than credit
institutions, decreased to 22% for tax years as of 2021 onwards.
The corporate income tax rate applicable to financial institutions, remains at 29% for 2023 and 2022, provided that the
specific provisions of art. 27A of the Greek ITC apply to those tax years.
The income tax benefit / (expense) recognized in the income statement differs from the tax credit /(charge) that would
apply if all profits / (losses) had been taxed at nominal corporate income tax rates, as follows:
Group Company 2023 2022 2023 2022 Profit / (loss) before inco me tax / (expense) 1,078 1,037 101 103 Tax calculated based o n current tax rate (237) (228) (22) (23) Non taxable inco me 80 275 23 23 Non tax deductibl e expenses and other permane nt differences (68) (123) - - Effect of different tax rates ap plied (64) (71) - - Effect of results of investments in associates (3) 6 - - Income tax benefit / (e xpense) (292) (140) - - Effective tax rate for the y e ar 27.1% 13.0% 0.0% 0.0%
As at 31 December 2023, the Group recognised a DTA of € 5,703 million (31 December 2022: € 5,974 million) and a deferred
tax liability of € 9 million (31 December 202 2: € 10 million). For further information, refer to Note 38.
Effective from tax year 2021 onwards, par. 3A of article 27 of the Greek I TC (L. 4172/2013) applies, as added with article
125 of Greek Law 4831/2021, regarding the treatment and order of offsetting the debit difference defined under article 27
of the ITC. According to par. 1 of the same article, any debit difference outstanding at the end of the twenty-year
amortization period is classified as a loss and carried forward for five years.
The income tax benefit / (expense) of the Group’s foreign subsidiaries is estimated based on the respective nominal
corporate income tax rates applicable in 2023 and 2022 (Bulgaria: 10%, Romania: 16%, Egypt: 22.5%, Serbia: 15%, Ukraine:
18% and temporarily solely for the tax year 2023, for the banks only is increased to 50%, Cyprus: 12.5%, Albania: 15%,
Netherlands 25.8%, Germany 15.825% and United Kingdom: 19% until 31 March 2023 and 25% from 1 April 2023 and
onwards).
According to article 82 of Greek Law 4472/2017 credit institutions and other legal entities scoped into the provisions of
article 27A of the ITC are required to pay an annual fee of 1.5% on the excess amount guaranteed by the Greek State of
DTA arising from the difference between the tax rate applicable under Greek Law 4334/2015 (Gazette A' 80/16/7/2015)
retrospectively from 1 January 2015 onwards (29%), and the tax rate applicable on 30 June 2015 (26%). The corresponding
amount for the Group for the year ended 31 December 2023 and 2022 amounted to € 6 million and has been charged
Piraeus Financial Holdings Group – 31 December 2023
325
within line item “n et other income / (expenses)" of the Income Statement.
Under the provisions of article 52 of Law 5045/2023, as amended and currently in effect, the exemption from the income
tax on the interest from Greek sovereign bonds that applied to individuals and foreign tax resident entities, was extended
to legal entities that have their headquarter or maintain a permanent establishment in Greece, with the exception of credit
institutions based in Greece.
In 2024 Greece is expected to incorporate in its domestic legislation the Council Directive 2022/2523 (Pillar II), within the
context of the OECD’s initiative against the tax Base Erosion and Profit Shifting (“BEPS”). Pillar Two Directive will implement
internationally agreed rules and methodology for establishing common measures for the minimum effective taxation of
multinational enterprise (MNE) groups and large-scale domestic groups. Specifically, all MNEs, with consolidated revenue
of over € 750 million, should be subject to an effective tax rate of at least 15% in each jurisdiction in which they have
presence. Management expects the legislative incorporation of the Council Directive in Greece and in the countries where
the Group operates, while it has already set-up a relevant project, in order to assess the impact of the new framework and
to implement it within the Group. According to the initial assessment, no significant impact is expected for the Group.
17 Earnings per share
Basic earnings per share (“EPS”) are calculated by dividing the profit after tax attributable to the ordinary shareholders of
the parent, by the weighted average number of ordinary shares in issue during the year, excluding the average number of
ordinary shares held by the Group.
1/1 - 31/12/2023 1/1 - 31/12/2022 Profit for the year attrib utable to ordinary shareh olders of the p arent from continuing operatio ns 788 899 Profit for the year attrib utable to ordinary shareh olders of the p arent from discontinued operations - 51 Profit for the year attributabl e to ordi nary shareholders o f the parent from continuing and discontinued operation s 788 950 Weighted average number of ordinary shares in issue (basic and diluted earni ngs) 1,248,386,766 1,249,647,205 Basic and dilute d EPS in € from continuin g operations 0.63 0.72 Basic and dilute d EPS in € from discontinue d operations - 0.04 Basic and diluted EPS in € fro m continui ng and discontinued operations 0.63 0.76
Following the Free Distribution of Own Shares, the Company holds a total of 3,975,419 of its own shares. As at 31 December
2023, the weighted average number of ordinary shares has been adjusted accordingly. Refer also to Notes 12 and 42.
Piraeus Financial Holdings Group – 31 December 2023
326
18 Tax effects relating to other comprehensive income / (expense) for the period
1/1 - 31/12/2023 1/1 - 31/12/2022 Group - Continuing operations Gross Tax Net Gross Tax Net Items that may be reclas sified subsequently to profit or loss Change in re serve from debt securities measured at FVTOCI 31 (9) 22 (175) 46 (129) Change in cu rrency translation reserve (1) - (1) (9) - (9) Change in cash flo w hedge reserve 2 - 2 - - - Items that will not be reclas sified subsequently to pr ofit or los s Change in rese rve from equity instruments measured at FVT OCI (30) 9 (21) 32 (9) 23 Change in p roperty revaluation reserve 2 - 2 10 (3) 7 Change in rese rve of actuarial gains / (losses) (3) 1 (2) 10 (3) 7 Οther comprehensive income / (ex pense) from continuing operations 1 1 2 (132) 31 (101)
19 Cash and balances with central banks
Group 31/12/2023 31/12/2022 Cash in hand 729 693 Deposits in central banks 9,208 8,361 Cheques clearing system – ce ntral banks 30 25 Cash and balances with cen tral banks (Note 45) 9,967 9,080 Mandatory reserves with central b anks 601 573 Total cash and balances wi t h central banks 10,567 9,653
The increase in line item “Deposits in central banks” is mainly due to the funds raised by the Bank from the debt securities
issuance within the year and due to the increase of customer deposits.
BoG requires all banks established in Greece to maintain deposits in the central bank with an average balance equal to 1.0%
of total customer deposits, as defined by the ECB. Similar requirements apply to the Company’s banking subsidiary in
Ukraine, namely JSC Piraeus Bank ICB. The Bank’s mandatory deposits at BoG bear interest set equal to the ECB DFR (4.0%
as of 31 December 2023), while the interest on any excess average balance of the relevant account is nil. The corresponding
deposits of JSC Piraeus Bank ICB are non-interest bearing.
Piraeus Financial Holdings Group – 31 December 2023
327
20 Due from banks
Group Company 31/12/2022 31/12/2023 As 31/12/2023 31/12/2022 reclassified Sight and time de posits with banks 156 238 34 45 Securities purchased under agree ments to resell 51 52 - - Placements with banks 32 70 - - Collateral poste d in margin accounts (as reclassified - refer to Note 49) 793 1,055 - - Due from banks over 90 d ays 1 - - - Total due from banks 1,034 1,415 34 45 οf which: Current 1,033 1,414 34 45 Non-current 1 1 - -
21 Derivative financial instruments
Group 31/12/2022 Group 31/12/2023 Α s reclassified Notional Notional Fair value Fair value amount amount Derivatives held for tradi ng Assets Liabilities Assets Liabilities IRSs 12,203 528 462 9,259 656 531 Currency swaps 1,443 4 28 1,454 5 11 FX forwards 1,212 8 9 923 11 18 Options and o ther derivative instruments 6,313 74 63 6,805 104 83 Cross Currency Interest Rate Swaps 540 17 16 540 17 17 21,711 631 578 18,981 794 660 Derivatives held for hedging (f air val ue he dges) IRSs 13,134 1,329 25 3,496 1,077 - Total Gross Deri v atives 34,845 1,960 603 22,477 1,871 660 Offsetting (Note 4.8) - (1,769) (308) - (1,651) (250) Net amount in the Sta tement of Financial Pos ition 34,845 191 295 22,477 220 410
IRSs held for trading mainly include transactions with the Group’s clientele and their offsetting positions engaged by the
Group with other counterparties in order to economically hedge its interest rate risk exposure.
Fair Value Hedge accounting
The Group enters into derivative transactions in order to mitigate the risk of changes in interest rates on the fair value of
financial assets and financial liabilities. The Group matches the said derivatives with the respective financial assets/liabilities
and designates them into FVH accounting relationships. Post designation, the offsetting effects of fair values changes in the
designated hedging instruments and the designated hedged items, or group of items, are recognised directly in profit or
Piraeus Financial Holdings Group – 31 December 2023
328
loss.
Specifically, the Group hedges the benchmark interest rate risk component by entering into IRSs with critical terms that
match those of the hedged item. This hedging objective is consistent with the Group’s overall interest rate risk management
strategy (refer to Note 4.11). The hedging instruments exclusively comprise IRSs. The hedged items pertain to Greek and
other sovereign fixed rate debt securities, as well as portfolios of non-maturing deposits (“NMDs”). The inclusion of the
latter under FVH accounting was done in accordance with the EU carve-out version of IAS 39 and occurred in the fourth
quarter of 2023.
The Group assesses hedge effectiveness on a prospective and retrospective basis by comparing the changes in fair value of
the hedged item, resulting from movements in the benchmark interest rate, with the changes in fair value of the IRSs used
to hedge the exposure.
The Group has identified the following sources of ineffectiveness:
- Credit risk of the counterparty, which is not offset by the hedged item. The Group minimizes CCR by entering into
derivatives with clearing members of central clearing counterparties (”CCPs”) and CCPs or bilaterally under ISDA
master netting agreements and CSA annexes.
- Use of different discounting curves when measuring the fair value of the hedged items and hedging instruments.
The maturity profile of IRSs designated by the Group as hedging instruments in FVH accounting relationships and which
were effective as of the end of the reporting period, is illustrated below:
31/12/2023 Group Due less than 1 year Due between 1 to 5 years Due after 5 years Total Notional amou nt of IRSs 700 5,690 6,744 13,134 Group 31/12/2022 Due less than 1 year Due between 1 to 5 years Due after 5 years Total Notional amou nt of IRSs - 5 3,491 3,496
The tables below summarize the balance sheet and income statement figures related to hedging instruments and hedged
items, respectively, in FVH accounting relationships, and are presented on a gross, i.e. pre-offsetting basis (refer to Note
4.8) and net of accruals.
31/12/2023 Group Interest Rate Risk Fair Value Changes in fair value Notional Statement of financial Derivative hedging instruments Asset Liability used for calculating Amount position line item hedge ineffectiveness Derivative financial IRSs 13,134 1,316 23 (84) instruments
Piraeus Financial Holdings Group – 31 December 2023
329
31/12/2022 Group Interest Rate Risk Fair Value Changes in fair value Notional Statement of financial Derivative hedging instruments Asset Liability used for calculating Amount position line item hedge ineffectiveness Derivative financial IRSs 3,496 1,077 - instruments 1,444
31/12/2023 Group Interest Rate Risk Changes in fair Accumulated hedge value used for Nominal Carrying adjustments in the Statement of financial Hedged Items calculating Amount amount carrying amount of position line item hedge hedged item ineffectiveness Debt securities at amortised 5,739 5,858 (868) Investment Securities 153 cost Debt securities at FVTOCI 395 433 n/a Investment Securities 24 Fair Value chang es of hedged Non-maturing depo s its 7,000 7,000 94 items in portfoli o hedges of (94) interest rate risk
31/12/2022 Group Interest Rate Risk Changes in fair Accumulated hedge value Nominal Carrying adjustments in the Statement of financial used for Hedged Items Amount amount carrying amount of position line item calculating hedged item hedge ineffectiveness Debt securities at amortised Investment Securities cost 3,294 3,409 (999) (1,373) Investment Securities Debt securities at FVTOCI 202 200 n/a (52)
“Changes in fair value used for calculating hedge ineffectiveness” includes also FVH adjustments recognised in the Group’s
Income Statement related to discontinued hedges until their de-designation date.
The cumulative FVH adjustment of the discontinued relationships, that is still outstanding in the Group’s Statement of
Financial Position, by reducing the carrying amount of the hedged items, amounted to € 490 million as at 31 December
2023 (31 December 2022: € 533 million). Hence the said amount is not included in the aforementioned tables.
The hedge ineffectiveness, determined as the difference between the hedging gains or losses of the hedging instruments
and the hedged items recognised in profit or loss of the Group for the year ended 31 December 2023, amounted to a loss
of € 1 million (31 December 2022: gain of € 19 million).
Piraeus Financial Holdings Group – 31 December 2023
330
22 Financial assets at fair value through profit or loss
a) Financial assets at FVTPL
Group 31/12/2023 31/12/2022 Greek govern ment bonds and T-bills 475 154 Foreign go vernment bonds and T-bills 97 370 Corporate bond s 4 4 Bonds issued by fin ancial institutions 1 - Equity securities 32 19 Total 609 548
As at 31 December 2023 and 2022, the Company did not hold any Financial assets at FVTPL.
b) Financial assets mandatorily measured at FVTPL
Group 31/12/2023 31/12/2022 Contingen t consideration assets 67 42 Βonds issued by fin ancial institutions 2 2 Unlisted shares 35 33 Mutual Funds 130 105 Total 234 182
Line item “contingent consideration assets” primarily comprises contingent and variable claims recognised following the
disposal of loan portfolios and other assets, previously classified as HFS. Refer to Note 4.15.
As at 31 December 2023 and 2022, the Company did not hold any Financial assets mandatorily measured at FVTPL.
Piraeus Financial Holdings Group – 31 December 2023
331
23 Loans and advances to customers at amortised cost
Group 31/12/2023 31/12/2022 Mortgages 6,453 6,877 Consumer, personal and other loans 1,221 1,403 Credit cards 437 485 Retail Lending 8,111 8,766 Corporate and Public Sector Lendi ng 29,746 29,484 Collateralised l oan obligations (CLOs) 466 502 Total gross loa ns and advances to customers at amortised cost 38,323 38,751 Less: ECL allowance (796) (1,385) Total 37,527 37,367 of which: Current 6,403 6,180 Non current 31,124 31,186
For the purposes of this disclosure, both the gross carrying amount and the ECL allowance for impairment losses have not
been grossed up with the PPA adjustment. As such, the respective amounts reported above do not reconcile to Note 4.3.1.
At Group level, the senior notes of the securitizations Phoenix, Vega I, II, III and Sunrise I, II, III, with a gross carrying amount
of € 5,984 million as at 31 December 2023 (31 December 2022: € 6,075 million), are included within line item “Corporate
and Public Sector Lending” (refer to Note 2.4.19). The ECL allowance on the aforementioned notes is insignificant as at the
reporting date.
A reconciliation of the gross carrying amount and the ECL allowance of loans and advances to customers at amortised cost,
as defined in Note 4.3.1, against the values presented in the aforementioned table is provided below, taking into account
the unamortised PPA as of the reporting date. For the purposes of this reconciliation, CLOs are presented within line item
“Corporate and Public Sector Lending”.
Piraeus Financial Holdings Group – 31 December 2023
332
Group 31/12/2023 31/12/2022 Mortgages (grossed up with PP A adjustment) 6,454 6,879 Less PPA adjustment (1) (2) Mortgages 6,453 6,877 Consumer, personal and other lo a ns (grossed up with PPA adjustmen t) 1,224 1,410 Less PPA adjustment (3) (6) Consumer, personal and o ther loans 1,221 1,403 Credit cards (grossed up with PPA ad justment) 437 485 Less PPA adjustment - - Credit cards 437 485 Retail Lending (grossed up with PPA adju stment) 8,115 8,774 Less PPA adjustment (4) (9) Retail Lending 8,111 8,766 Corporate and Publ ic Sector Lending (grossed up with PPA adjustment) 30,231 30,013 Less PPA adjustment (19) (27) Corporate and Public Sector Lendi ng 30,212 29,986 Total gross loans and advances to customers at amortised cost (grossed up with PPA adjustment) 38,346 38,787 Less PPA adjustment (23) (36) Total gross loa ns and advances to customers at amortised cost (A) 38,323 38,751 Less: ECL allowance (g rossed up with PPA adjustment) (819) (1,421) Less PPA adjustment 23 36 Less: ECL allowance (B) (796) (1,385) Net loans and advances to custom e rs at amortised cost (A) + (B) 37,527 37,367 of which: Current 6,403 6,180 Non current 31,124 31,186
Loans and advances to customers at amortised cost include finance lease receivables, broken down as follows:
Group - Finance lease receivables 31/12/2023 31/12/2022 No later than one year 193 231 One to five years 483 436 Later than five years 446 435 Gross investment in finance leas es 1,121 1,102 Unearned finance income (298) (211) Net investment in finance leases 823 891 of which: No later than one year 143 193 One to five years 349 339 Later than five years 331 359
As at 31 December 2023 and 2022, the Group recognized an ECL allowance of € 44 million and € 76 million, respectively,
on its finance lease receivables.
Piraeus Financial Holdings Group – 31 December 2023
333
24 Investment Securities
Group Company 31/12/2023 31/12/2022 31/12/2023 31/12/2022 Financial assets at FVTOCI Greek Government Bon ds 630 237 - - Foreign Govern ment Bonds and Treasury Bills 297 1 - - Greek Treasury B ills 408 558 - - Debt securities at FVTO CI 1,335 796 - - Equity securities at FVTOC I 49 101 2 2 Total financial i nstrument s at FVTOCI 1,383 897 2 2 Debt securities measured at a mortised cost Greek Government Bon ds 7,718 7,535 - Corporate Bonds 357 346 - - Bonds issued by fin ancial institutions 1,09 1 526 855 819 Foreign Govern ment Bonds 2,510 2,468 - - Greek Treasury B ills 4 3 - - Gross carrying amount of debt s e curities measured at amortised cost 11,681 10,878 855 819 Less: ECL allowance fo r impairment losses (21) (34) (7) (23) Carrying amount of debt securi t ies measur ed at amortised cost 11,659 10,844 848 796 Total investment securities 13,042 11,741 850 798 Current debt securitie s 769 594 - - Non-current debt secu rities 12,225 11,045 848 796 Total debt securities 12,994 11,640 848 796
The cumulative ECL allowance recorded in other comprehensive income reserve related to debt securities at FVTOCI
amounted to € 1 million for the year ended 31 December 2023 (31 December 2022: € 1 million).
Out of the ECL allowance of debt securities measured at amortised cost, € 17 million pertains to debt securities classified
in Stage 1 and the remaining € 4 million relates to debt securities classified in Stage 3 (31 December 2022: Stage 1 and Stage
2 amounted to € 30 million and € 4 million, respectively).
The movement of debt securities measured either at FVTOCI or at amortised cost, is illustrated below:
Piraeus Financial Holdings Group – 31 December 2023
334
Group Movement of debt instruments at FVTOCI Stage 1 Stage 2 Total Opening balance at 1/1/2022 2,277 22 2,299 Additions 2,028 - 2,028 Coupon colle ctions (35) (1) (36) Disposals / maturities (2,716) (4) (2,720) Transferred from Stage 1 to Stage 2 (9) 9 - Transferred from Stage 2 to Stage 1 3 (3) - Interest income 29 2 30 Gain / (loss) from changes in fair va lue (192) (4) (196) Reclassification to de bt securities at amortised co st (589) (21) (610) Closing balance 31/12/2022 796 - 796 Additions 2,256 - 2,256 Coupon colle ctions (13) - (13) Disposals / maturities (1,802) - (1,802) Interest income 41 - 41 Gain / (loss) from changes i n fair value 57 - 57 Closing balance 31/12/2023 1,335 - 1,335
Group Company Movement in gross carrying amount of debt securities measured at amortised cost Stage 1 Stage 2 Stage 3 Total Stage 1 Total Opening balance at 1/1/2022 9,219 - - 9,219 786 786 Additions 2,518 - - 2,518 - - Coupon colle ctions (185) - - (185) (67) (67) Disposals / maturities (172) (15) - (187) - - Interest income 186 - - 186 99 99 Foreign exchange d ifferences and other movements (4) - - (4) - - Changes due to fair value hedging (1,373) - - (1,373) - - Reclassification from deb t securities at FVTOCI 678 26 - 704 - - Closing balance 31/12/2022 10,867 11 - 10,878 819 819 Additions 764 - - 764 - - Coupon colle ctions (250) - - (250) (67) (67) Disposals / maturities (109) (4) - (113) - - Transferred from Stage 2 to Stage 3 - (7) 7 - - - Interest income 248 - - 248 103 103 Foreign exchan ge differences and other movements - 1 - 1 - - Changes due to fair value hedging 153 - - 153 - - Closing balance 31/12/2023 11,673 - 7 11,681 855 855
Refer to Note 4.6 for information on the credit rating and stage allocation of the debt securities classified at FVTOCI and
debt securities measured at amortised cost.
The Group holds certain equity securities designated at FVTOCI, the fair value of which is presented in the following table:
Piraeus Financial Holdings Group – 31 December 2023
335
Group - Fair value of equity securities at FVTOCI 31/12/2023 31/12/2022 Attica Ηoldin gs S.A. 9 59 Ideal Group - 9 Atlantic Insurance Publ ic Limited Company 7 6 Attica Bank S.A. 8 - Other 25 27 Total 49 101
In 2023, the Group derecognized a 11.8% shareholding in Attica Holdings S.A. and its 5.2% shareholding in Ideal Group
(“Ideal”), which were both contributed to Strix Holdings LP in the third quarter of 2022, in exchange for additional limited
partnership interests. Refer to Notes 25B and 46.3 for further information on Attica Holdings S.A. The legal transfer of the
Group’s stake in Ideal did not meet at that time the IFRS 9 derecognition requirements, however, such requirements were
met prior to the reporting date, resulting to accounting derecognition of the said asset in the current year. The Group’s cost
of investment in Strix Holdings LP increased by an equal amount and profit before tax was not affected by the said
derecognitions. The total fair value of the disposed equity securities as of their derecognition date amounted to € 80 million,
while the cumulative gain transferred within equity amounted to € 34 million. Refer to Note 43 for the cumulative gain or
loss transferred within equity from “Reserve from financial assets at FVTOCI” to “Retained Earnings”.
25 Investments in consolidated companies
The Group’s and the Company’s investments in consolidated companies as at 31 December 202 3, are provided below:
A. Subsidiaries (full consolidation method)
Group Company Unaudited a/a Company Activity Country tax years ⁽¹⁾ % holding % holding 1. Piraeus Bank S.A. Banking activiti es Greece 2020-2023 100.00% 100.00% Piraeus Leasing Sing le Member 2. Financial leasi ng Greece 2022-2023 100.00% - S.A. Piraeus Property Real E state 3. Property management Greece 2022-2023 100.00% - Management Singl e Member S.A. Dynamic Asset Operating Leasi ng 4. Operating leasi ng Greece 2018-2023 100.00% - S.A. 5. Piraeus Securities S.A. Stock exchange servi ces Greece 2018-2023 100.00% - Piraeus Factoring Sing le Member 6. Corporate factoring Greece 2018-2023 100.00% - S.A. Piraeus Capital Manageme nt Management of ven ture capital 7. Greece 2018-2023 100.00% - Single Member S.A. fund Piraeus Jeremie Techno logy Management of ven ture capital 8. Catalyst Management Singl e Greece 2018-2023 100.00% - fund Member S.A. Piraeus Asset Management Sing le 9. Mutual funds manageme nt Greece 2018-2023 100.00% - Member M.F.M.C. S.A.
Piraeus Financial Holdings Group – 31 December 2023
336
Group Company Unaudited a/a Company Activity Country tax years ⁽¹⁾ % holding % holding Geniki Information Single Assessment and colle ction of 10. Greece 2018-2023 100.00% - Member S.A. commercial debts Kosmopolis Α' Shopp ing Centers 11. Shopping center’s manage m ent Greece 2018-2023 100.00% - Single Member S.A. ND Development Sing le Member 12. Property management Greece 2018-2023 100.00% - S.A. New Up Dating Develop m ent Property, tourism & 13. Real Estate and Tourism Sin gle Greece 2018-2023 100.00% - development compan y Member S.A. 14. Picar Single Member S.A. City Link areas managemen t Greece 2018-2023 100.00% - 15. P.H. Development Property management Greece 2018-2023 100.00% - General Construction and Property develo pment/ holding 16. Greece 2018-2023 66.66% - Development Co. S.A. company 17. Entropia Ktimatiki S.A. Property management Greece 2018-2023 66.70% - Komotini Real Estate 18. Property management Greece 2018-2023 100.00% - Development Sin gle Member S.A. Piraeus Develop ment Single 19. Property management Greece 2018-2023 100.00% - Member S.A. Piraeus Real Estate Sing le 20. Real estate develo pment Greece 2018-2023 100.00% - Member S.A. Pleiades Estate Singl e Member 21. Property management Greece 2018-2023 100.00% - S.A. Piraeus Agency Sol utions Single 22. Insurance agency Greece 2018-2023 100.00% 100.00% Member S.A. Trading of boat ve hicles, cars and 23. Mille Fin S.A. Greece 2018-2023 100.00% - equipment Assessment and colle ction of 24. Multicolle ction S.A. Greece 2009-2023 51.00% - commercial debts Centre of Sustainable Consulting Servi ces - Hotel - 25. Entrepreneurship Excelixi Single Greece 2018-2023 100.00% - Training & Semin ars Member S.A. 26. PROSPECT M.C.P.Y. Yachting managemen t Greece 2018-2023 100.00% - Ianos Properties Sing le Member 27. Property management Greece 2018-2023 100.00% - S.A. Lykourgos Prope r ties Single 28. Property management Greece 2018-2023 100.00% - Member S.A. 29. Thesis Cargo Single M ember S.A. Property management Greece 2022-2023 100.00% - Thesis Hermes Single M ember 30. Property management Greece 2022-2023 100.00% - S.A. 31. Thesis Agra Single Member S.A. Property management Greece 2022-2023 100.00% - Thesis Schisto Single M ember 32. Property management Greece 2022-2023 100.00% - S.A. 33. Thesis Stone Singl e Member S.A. Property management Greece 2022-2023 100.00% - Trastor Real Estate Inve stment 34. Real estate investment pro perty Greece 2018-2023 97.78% - Company 35. Sinoris Single Member S.A. Property management Greece 2023 100.00% - Iolcus Investments Altern ative Alternative inve s tments funds 36. Greece 2018-2023 100.00% - Investments Funds Managers S.A. management Digital banki n g products and 37. Snappi S.A. Greece 2022-2023 69.27% 69.27% services
Piraeus Financial Holdings Group – 31 December 2023
337
Group Company Unaudited a/a Company Activity Country tax years ⁽¹⁾ % holding % holding 38. Synthis Single Membe r S.A. Property management Greece 2022-2023 100.00% - 39. MIG Holdings S.A. Holding compan y Greece 2018-2023 87.79% - Athenian Investmen ts Holdings 40. Holding compan y Greece 2018-2023 87.79% - S.A. 41. MIG Media S.A. Advertising servi ces Greece 2018-2023 87.79% - Kynouria Ktimatiki Si ngle 42. Property management Greece 2018-2023 97.78% - Member S.A. 43. Sirrus Single Member S.A. Property management Greece 2023 100.00% - 44. Cielo Consul t ancy Sh.P.K. Property management Albania 2014-2023 99.09% - Euroinvestment & Fin ance Public Asset management, real estate 45. Cyprus 2018-2023 90.90% 2.21% Ltd operations 46. R.E. Anodus Two Ltd Holding and inve stment company Cyprus 2019-2023 99.09% - 47. Tellurion Ltd Holding compan y Cyprus 2019-2023 100.00% - 48. Tellurion Two Ltd Holding compan y Cyprus 2017-2023 99.09% - Holding, Investment an d Real 49. Trieris Two Real Estate L TD Cyprus 2011-2023 100.00% - Estate Portfolio Manag ement Consultancy service s for real 50. R.E. Anodus Ltd estate develo pment and Cyprus 2017-2023 100.00% - investments 51. Lakkos Mikell i Real Estate Ltd Property management Cyprus 2018-2023 50.66% - 52. Philoktimatiki Public Ltd Land and prope rty development Cyprus 2018-2023 53.32% - Sunholdings Prope r ties Company 53. Land and prope rty development Cyprus 2018-2023 26.66% - Ltd 54. Philoktimatiki Ergoliptiki Ltd Construction compan y Cyprus 2018-2023 53.32% - 55. MIG Leisure Ltd Holding compan y Cyprus 2009-2023 87.79% - 56. MIG Aviation Hold in gs Ltd Holding compan y Cyprus 2009-2023 87.79% - 57. Passerat Company Ltd Holding compan y Cyprus 2018-2023 100.00% - 58. JSC Piraeus Bank ICB Banking activiti es Ukraine 2023 99.99% 99.99% 59. Akinita Ukraine LLC Real estate devel opment Ukraine 2014-2023 100.00% - 60. Sinitem LLC Sale and purchase o f real estate Ukraine 2013-2023 99.94% - 61. Solum Enterprise LLC Property management Ukraine 2012-2023 99.94% - 62. Solum Limited Liabi lity Company Property management Ukraine 2018-2023 99.94% - Monitoring an d c ollection 63. Piraeus Leasing Romani a S.A. services for loans d isbursed by Romania 2003-2023 100.00% - the company Daphne Real Estate Consultan cy 64. Real estate devel opment Romania 2014-2023 99.09% - SRL 65. Proiect Season Residen ce SR L Real estate devel opment Romania 2018-2023 100.00% - 66. R.E. Anodus SRL Real estate devel opment Romania 2013-2023 99.09% - 67. Piraeus Rent Doo Beog rad Operating lease s Serbia 2007-2023 100.00% - 68. JSC Robne Kuce Beo grad (“RKB”) Property management Serbia 2007-2023 87.79% - 69. Piraeus Real Estate Egyp t LLC Property management Egypt 2011-2023 100.00% - Trieris Real Estate Manageme nt Management of real e state British Virgin 70. - 100.00% - Ltd companies Islands
Piraeus Financial Holdings Group – 31 December 2023
338
Group Company Unaudited a/a Company Activity Country tax years ⁽¹⁾ % holding % holding United Kingdom - 71. Piraeus Group Capital Ltd Debt securities’ issuance Jersey - 100.00% 100.00% Channel Islands United 72. Piraeus Group Finance PLC Debt securities’ issuance 2012-2023 100.00% - Kingdom SPV for securitization of 73. Piraeus SNF DAC corporate, mortgage an d Ireland - - - consumer loans SPV for securitization of 74. Magnus NPL Finance DAC Ireland - - - corporate loans
(1)
In accordance with Ministerial Decision 1208/20.12.2017 of the Independent Public Revenue Authority, the tax position of entities domiciled in Greece
that have not been notified by the local tax authorities for a tax audit, is deemed to be final only after a five-year period has elapsed since the end of each
fiscal year.
The subsidiaries duly numbered 73 - 74 are SPVs for securitization of loans and advances to customers and issuance of debt
securities. The investment numbered 53 is a subsidiary due to majority representation in the company’s BoD.
Furthermore, as at 31 December 2023 the subsidiaries duly numbered 10, 23, 24, 30-33 and 41 were under liquidation.
The following subsidiaries, that in aggregate are immaterial to the Group’s financial position and results of operations, are
not consolidated but recognized at cost: a) “Hellenic Information Systems HIS S.A.”; b) “The Museum Ltd” and c) “Kion
Holdings Ltd”. The full consolidation of the aforementioned companies would not have a significant effect on the
Consolidated Financial Statements since the sum of their total net income, total equity and total assets comprises less than
0.01% of the Group’s respective balances, based on their most recent financial statements.
The movement of the Company’s investments in subsidiaries during the year is provided below:
Company
31/12/2023
31/12/2022
Opening balance
5,558
5,539
Additions
-
44
Participation in share capital increases / decreases of Piraeus Bank and other
subsidiaries
15
-
Disposals
-
(25)
Closing balance
5,573
5,558
Piraeus Financial Holdings Group – 31 December 2023
339
Acquisition of MIG
As at 31 December 2022, the Bank’s 31.2% equity interest in MIG was classified as an associate. Since 6 February 2023, the
Bank gradually increased its shareholding to 87.8% for a total cash consideration of € 105 million. The shareholding acquired
through the Athens Stock Exchange, in excess of one third of MIG’s outstanding shares, was subject to regulatory approval
by the HCC, therefore, pursuant to the relevant provisions of antitrust law, the voting rights arising from such shares were
not exercisable until the HCC’s approval date, i.e. 13 April 2023. The Bank’s shareholding in MIG as at 13 April 2023 was
62.2% and the cash consideration paid by the Bank for the additional 31% equity interest in MIG up to that date amounted
to € 53 million. As the Bank held a non-controlling interest in MIG up to 13 April 2023, the additional investment of € 53
million was recognized under the equity method, i.e. the cost of the Bank’s investment in associates was increased by an
equivalent amount. In line with the requirements of Greek Law 3461/2006, the Bank launched a mandatory tender offer
(“MTO”) in order to acquire the remaining MIG common shares held by third parties at a price of € 0.217 per share. The
MTO was completed on 21 April 2023 and the Bank’s shareholding in M IG increased by 25.6% to 87.8%, as at that date. The
cash consideration paid by the Bank for the acquisition of the 25.6% interest amounted to € 52 million and the previously
held 62.2% interest which was accounted for as an associate and which was increased to an 87.8% controlling interest
through a business combination, was remeasured to fair value.
In November 2022, the Bank contributed into Strix Holdings LP, two (2) bond loans due from MIG of total carrying value €
329 million, in exchange for additional limited partnership interest. On 13 December 2022, MIG announced that its BoD
had accepted a proposal submitted by Strix Holdings LP for the exchange of the entirety of the bonds owned by Strix
Holdings LP pertaining to the aforementioned two bond loans for MIG’s total direct and indirect stake in Attica Holdings
S.A. (i.e. total shareholding of 79.4%), the “Debt-to-Asset Swap”. The proposed transaction was subject to two conditions
precedent, namely: a) Strix Holdings LP being granted regulatory approval by the HCC for the acquisition of a controlling
stake in Attica Holdings S.A.; and b) approval of the proposed Debt-to-Asset Swap by MIG’s shareholders. Both conditions
had been met prior to 13 April 2023, hence the scope of MIG’s identifiable net assets as at the acquisition date did not
include: a) Attica Holdings S.A. and its subsidiaries; and b) MIG’s bond loan liabilities due to Strix Holdings LP. The Debt-to-
Asset Swap was executed on 12 May 2023.
Τhe acquisition of MIG underpins the Group’s strategy to achieve synergies from the Bank’s holdings portfolio and to
maximize the returns for the benefit of the Company’s shareholders. The acquisition is expected to enhance the Group’s
strategy for revenue diversification and entails the following key benefits: i) enrichment of the Group's investment property
portfolio, ii) geographical dispersion of the Group’s activities; and iii) opportunities for the development of new business
activities.
The fair value of each major class of identifiable assets acquired and liabilities assumed at the acquisition date is provided
below:
Piraeus Financial Holdings Group – 31 December 2023
340
MIG Holdings S.A. Consolidated amounts ASSETS Due from ban ks 15 Investment p roperty 203 Other ass e ts 4 Total Assets 222 LIABILITIES Due to ban ks 92 Other liabi lities 7 Total Liabi l ities 99 Net asset s (A) 123 of which p re-existing rel ationships (Β) (82) Identifiable net as s ets recogniz ed (C) A-B 205 Considerat ion paid 52 Effective se t tlement o f p re-existing r e lationshi p s 82 Non cont rolling interest 15 Fair value of previously held interest (Note 25B) 76 Total (D) 226 Goodwill D-C 21
Management assessed that goodwill was impaired, given that the Group’s investment in the acquiree is not expected to
generate cash inflows that would be significantly higher from the fair value of the acquiree’s underlying assets, therefore,
an impairment loss of € 21 million was charged in the income statement. The fair value remeasurement of the previously
held 62.2% interest in MIG resulted to a gain of € 34 million, which was recognized in line item “Net gains / (losses) from
loss of control over subsidiaries / disposal of associates and joint ventures” of the Consolidated Income Statement. The
cash and cash equivalents acquired at the acquisition date, net of intercompany balances, amounted to € 6 million. During
the year ended 31 December 2023, the Group reco gnized in the income statement a net loss of € 15 million from its total
equity stake in MIG, broken down as follows:
€ million Share of MIG’s loss unde r the equity method up to 13 April 2023 (24) Gain from fair value remeasureme nt of the previously held 62.2% interest (Note 25B) 34 Recycling o f loss recognized in other comprehe nsive income under the equi ty method up to 13 (4) April 2023 Impairment of good w ill (21) Total loss r ecognized in the income statement (15) of which: due to acquisi tion of the 56.6% stake in 2023 (3) of which: due to pre-existing 31.2% s take (12)
MIG’s total revenue and loss before tax accounted for under the full consolidation method after 13 April 2023 and up to
the reporting date is immaterial. The impact of the MIG acquisition on the Group’s total net income and profit before
income tax, had it been recognized on 1 January 2023, is insignificant.
Piraeus Financial Holdings Group – 31 December 2023
341
Annual financial statements of subsidiaries
The annual financial statements of the Group’s subsidiaries for the year ended 31 December 2023, which have been issued
prior to approval of the Annual Financial Statements, are available on the Company’s web site at www.piraeusholdings.gr
in section Investor Relations, subsection Financial Data - Financial Statements and Other Information - Consolidated
Companies. The annual financial statements of the remaining subsidiaries will be available on the Company’s web site u pon
their issuance.
Significant restrictions of subsidiaries
With respect to subsidiaries, except for inherent restrictions applied under the regulatory framework based on which they
operate, no other significant legal, contractual, or regulatory restrictions are imposed regarding the transfer of cash in the
form of dividends, the transfer of funds, as well as the repayment of intragroup loans.
Consolidated structured entities
As of 31 December 2023, following derecognition of the Sunrise III portfolio, the Group controlled, thus, consolidated one
SPV, namely Magnus NPL Finance DAC, which was established for the securitization of an NPE portfolio.
Furthermore, the Group controls, therefore, consolidates PIRAEUS SNF DAC (retained securitization of mortgage, corporate
and consumer NPEs). The underlying loans are recognized on the Group’s Statement of Financial Position.
The following table presents the outstanding amount of debt securities held by the Group, that were issued by the SPVs,
though not recognized on the Group’s Statement of Financial Position:
Outstanding amount of debt securities held SPV 31/12/2023 31/12/2022 Sunrise III NPL Finance DAC - 174 Magnus NPL Finance DAC 4 11 Total 4 185
Interests in unconsolidated structured entities
As at 31 December 2023, the Group has investments in open-ended mutual funds that are managed by its wholly owned
subsidiary Piraeus Asset Management Single Member M.F.M.C. S.A. with independent management and organizational
structure, licensed by the HCMC. The assets of these funds are equal to € 3.2 billion, while the clientele includes 75,858
customers.
The management of mutual funds is performed under the investment framework defined for each mutual fund. The Group
acts as an agent acting on behalf of its clients and does not control the mutual funds. On this basis, the interests in mutual
funds are classified and measured at FVTPL.
Piraeus Financial Holdings Group – 31 December 2023
342
As of 31 December 2023, the Bank’s assets in open-ended mutual funds are valued at € 118 million.
Total Assets Mutual funds 31/12/2023 31/12/2022 Domestic Mutual Funds 68 58 Abroad Mutual Funds 50 46
The following table presents the carrying amount of the mutual funds’ assets that the Group manages, per asset class, as
at 31 December 2023 and 2022:
Total Assets Mutual funds 31/12/2023 31/12/2022 Equity funds 520 393 Balanced funds 153 156 Bond funds 1,984 778 Money Market funds 209 198 Fund of Funds 372 518 Total 3,238 2,043
In the context of the Group’s NPE de-risking plan implemented in the previous years, the Group established seven (7)
separate SPVs named “Phoenix NPL Finance DAC”, “Vega I NPL Finance DAC”, “Vega II NPL Finance DAC”, “Vega III NPL
Finance DAC”, “Sunrise I NPL Finance DAC”, “Sunrise II NPL Finance DAC” and “Sunrise III NPL Finance DAC”, one for each
NPE portfolio securitization.
The NPE portfolios were transferred to the SPVs, on or after their establishment, and the SPVs issued three (3) tranches of
structured notes (i.e. Senior, Mezzanine and Junior) which were fully subscribed by the Group. The Group lost control over
the SPVs, following the transfer to third parties of 95% of the mezzanine and junior notes issued by the SPVs. The Group
maintained 100% of the senior notes which are classified within loans and advances to customers measured at amortised
cost and 5% of the mezzanine and junior notes which are classified within loans and advances to customers mandatorily
measured at FVTPL. The following table sets out an analysis of the carrying amounts of said assets held by the Group. The
maximum exposure to loss is equal to the carrying amount of the assets held.
Total Assets Securitization SPVs 31/12/2023 31/12/2022 Loans and advances to cus tomers at amortised cost Senior Notes 5,984 6,075 Loans and advances to cus tomers mandatoril y measured at FVTPL Mezzanine and Junior Notes 6 6
Piraeus Financial Holdings Group – 31 December 2023
343
B.
Associates and joint ventures (equity method)
B.1 Associates
The Group’s and the Company’s associates as at 31 December 2023 are the following:
Group Company Unaudited s/n Company Activity Country tax years ⁽¹⁾ % Holding % Holding 1 Piraeus - TANEO Capital Fund Close end venture cap ital fund Greece - 50.01% - 2 PJ Tech Catalyst Fund Close end venture cap ital fund Greece - 30.00% - APE Commercial Property Real 3 Estate Tourist and Deve lopment Holding compan y Greece 2018-2023 27.80% - S.A. Omicron Cyclos Ena Symmetohi ki 4 Holding compan y Greece 2018-2023 28.10% - S.A. ⁽²⁾ Real estate, develo pment/ tourist 5 APE Investment Property S.A. Greece 2018-2023 28.92% - services Property management/e lectricity 6 Olganos Real Estate S.A. production from ren ewable Greece 2018-2023 32.27% - energy resou rces 7 Pyrrichos S.A. Property management Greece 2018-2023 55.95% - Information technol ogy & 8 Exodus S.A. ⁽²⁾ Greece 2018-2023 49.90% - software European communi ty programs 9 Evros Development Compan y S.A. Greece 2018-2023 30.00% - management 10 Gaia S.A. Software services Greece 2019-2023 24.92% - Crete Scient & Tech. Park Manag. Scientific and techn ol ogy park 11 Greece 2018-2023 30.45% - & Dev. Co. S.A. management 12 Intrum Hellas REO Solu tions S.A. Real estate Greece 2019-2023 19.96% - 13 Intrum Hellas Credit Servici ng S.A. Credit and loan servicing Greece 2019-2023 20.00% - Ιnterbanking co m pany of development, ope r ation and 14 Teiresias S.A. Greece 2023 23.53% - management of info rmation systems Support & e-commerce service s, 15 Piraeus Direct Services S.A. Greece 2018-2023 49.90% - trade of time renewal cards 16 Perigenis Busine ss Properties S.A. Property management Greece 2020-2023 20.61% - 17 Abies S.A. ⁽²⁾ Property management Greece 2018-2023 40.14% - Development/ management of 18 ΕΤVΑ Industrial Parks S.A. Greece 2018-2023 1.00% - industrial areas Euromedica Societe Anonyme for 19 Hospital and h ea lth services Greece 2023 29.35% - provision o f medical services British Virgin 20 Trieris Real Estate Ltd Property management 2018-2023 18.41% - Islands 21 Strix Holdings LP Holdings limi ted partnership Ireland - 100.00% - 22 Strix Asset Management Ltd Asset management Ireland - 25.00% - 23 Strix Holdings II LP Holdings limi ted partnership Ireland - 100.00% -
(1)
In accordance with Ministerial Decision 1208/20.12.2017 of the Independent Public Revenue Authority, the tax position of entities domiciled in Greece
that have not been notified by the local tax authorities for a tax audit, is deemed to be final only after a five-year period has elapsed since the end of each
Piraeus Financial Holdings Group – 31 December 2023
344
fiscal year.
(2)
Placed under liquidation as at 31 December 2023.
The Group’s associate NGP Plastic S.A., is immaterial to the Group’s financial position and results of operations, therefore,
is not consolidated under the equity method but recognised at cost. The contribution of this non-significant associate is
approximately 0.20%, 0.03% and 0.03% of the Group’s total net income, total equity and total assets, respectively, based
on the most recent available financial statements.
Following completion of the Debt-to-Asset Swap, the Group derecognized its 11.8% equity investment in Attica Holdings
S.A., which was measured at FVTOCI and carried at € 62 million. Refer to Note 25A for further information on the Debt-to-
Asset Swap. The asset was contributed to Strix Holdings LP in July 2022, however, the legal transfer did not meet at that
time the IFRS 9 derecognition requirements. The Group’s cost of investment in Strix Holdings LP increased by an equal
amount and profit before tax was not affected by the said derecognition.
Although the Group owns more than half of Piraeus – TANEO Capital Fund, Pyrrichos S.A., Strix Holdings LP and Strix
Holdings II LP, Management has determined that the Group does not control these entities. Strix Holdings LP and Strix
Holdings II LP (the “Partnerships”) are limited partnerships established in Ireland who own equity participations unrelated
to the financial sector in general and specifically to the Group’s principal activity. The Bank is the sole limited partner
investor in the Partnerships and their business objective is to enhance the value of their assets through: (i) monitoring, cost
optimization, strategic reorganisation, corporate transformation, business development and changes in management; (ii)
disposing of such assets in structured disposal processes aimed at maximising sale proceeds with the assistance of external
asset management; and (iii) engaging in such other activities as the general partner deems necessary. The Partnerships are
material associates of the Group. The Group does not have power over the Partnerships because it cannot direct their
relevant activities either through voting rights or through other substantive rights stemming from contractual agreements
and there are no other parties acting on its behalf. Further, the Group has significant influence in Intrum Hellas REO
Solutions S.A., ΕΤVΑ Industrial Parks S.A. and Trieris Real Estate Ltd even though its shareholding does not exceed 20%.
Refer to Note 47 for further information on changes in the Group’s subsidiaries and associates.
B.2 Joint ventures
The Group’s and the Company’s joint ventures as at 31 December 2023 are the following:
Group Company Unaudited s/n Company Activity Country tax years ⁽¹⁾ % Holding % Holding 1 AEP Elaiona S.A. Property management Greece 2018-2023 50.00% - 2 Peirga Kythnou P.C. Real estate Greece 2019-2023 50.00% - Sunrise III Real Estate Sing le 3 Property management Greece - 100.00% - Member S.A. SPV for securitization of 4 Sunrise III NPL Finance DAC Ireland - - - corporate loans
(1)
In accordance with Ministerial Decision 1208/20.12.2017 of the Independent Public Revenue Authority, the tax position of entities domiciled in Greece
that have not been notified by the local tax authorities for a tax audit, is deemed to be final only after a five-year period has elapsed since the end of each
fiscal year.
Piraeus Financial Holdings Group – 31 December 2023
The total carrying value of the Group’s interests in non-significant associates and joint ventures as at 31 December 2023
and 2022, amount ed to € 120 million and € 191 million, respectively.
The following table presents in total the proportion of the Group in the after-tax results and total comprehensive income
for the year, of its associates as at 31 December 2023 and 2022. The below condensed financial information reported by
the associates for the purposes of being accounted for under the equity method, is prepared in accordance with IFRS and
adjusted (if necessary) in conformity with the Group’s accounting policies.
Condensed financial informati on 2023 2022 Share of profit / (loss) of associ ates and joi nt ventures, after tax (15) 29 Other comprehensi ve income 2 - Items that may b e reclassified subsequentl y to profit or loss 2 - Total comprehensive income (13) 29 Other inform ation on associates and joint ventu res
The Group discontinues to recognise its share of accumulated losses in associates, when its share of losses equals or exceeds
its interest in the associate. The cumulative unrecognised losses from associates as at 31 December 2023 amounted to €
50 million (31 December 2022: € 49 million). In case the associate subsequently reports profits, the Group resumes
recognizing its share of those profits only after its share of the profits equals the share of losses not previously recognized.
Movement of investment in associates and joint ventures during the year
The movement of the Group’s investments in associates and joint ventures during the year is provided below:
Group 31/12/2023 31/12/2022 Opening balance 1,023 630 Contribution of equity interests 229 135 Contribution of debt assets 15 329 Disposals - (1) Share of profit / (loss) of associ ates and joi nt ventures, after tax (16) 29 Gain from fair value remeasureme nt of associates (Note 25A) 34 - Acquisition of controlling interests (Note 25A) (76) (79) Transfers to FVTOCI portfoli o (1) - Impairment - (2) Additions, cash con tributions / capital returns and other ad just ments 47 (18) Closing balance 1,255 1,023
In December 2023, the Bank contributed to Strix Holdings LP a convertible bond loan of total carrying value € 15 million,
due from ASCL Healthcare Single Member S.A., in exchange for additional limited partnership interests. An amount of € 3
million was distributed by Strix Holdings LP in 2023 and an amount of € 18 million was distributed by Strix Holdings II LP in
2023.
345
Piraeus Financial Holdings Group – 31 December 2023
346
Basic financial information of the associates and joint ventures for 2023 and 2022
31/12/2023 Profit / Participation Total Total s/n Company Country (loss) Total assets % Revenues liabiliti es before tax 1 Crete Scient. a nd Tech. Park Mana g. and Dev. Co. S.A. Greece 30.45% - - - - 2 Evros' Deve lopment Company S.A. Greece 30.00% - - - - APE Commerci al Prope rty Real Estate Touri s t and 3 Greece 27.80% 2 - 6 - Developm ent S.A. British Virgin 4 Trieris Real Es tate LTD 18.41% - - 1 - Islands 5 APE Investm ent Propert y S.A. Greece 28.92% - - 61 8 6 Omicron C y clos Ena S y mmetohi ki S.A. Greece 28.10% - - 115 140 7 Exodus S.A. Greece 49.90% - - - 2 8 Piraeus - TA N EO Capi tal Fund Greece 50.01% - - 2 - 9 Teiresias S.A. Greece 23.53% (1) 18 18 17 10 PJ Tech Catal y st Fund Greece 30.00% (2) - 6 - 11 Pyrrichos S.A. Greece 55.95% - - 5 20 12 Piraeus Dire c t Service s S.A. Greece 49.90% - 15 3 1 13 Gaia S.A. Greece 24.92% 1 8 21 17 14 Olganos S.A. Greece 32.27% - - 7 10 15 Abies S.A. Greece 40.14% - - - - 16 ΕΤVΑ Indu strial Parks S.A. Greece 1.00% 4 19 365 22 Euromedica So c iete A nonyme for provis ion of medical 17 Greece 29.35% (19) 47 191 213 services 18 Intrum Hell as REO Soluti ons S.A. Greece 19.96% (3) 5 55 7 19 Intrum Hell as Credit Serv icing S.A. Greece 20.00% 114 227 411 131 20 Perigenis Bu siness Prope rties S.A. Greece 20.61% (1) - 47 - 10 21 Strix Holdi ngs LP Ireland 100.00% 12 - 741- 22 Strix Asset Ma nagement Ltd Ireland 25.00% 7 - 7 - 11 23 Strix Holdi ngs II LP Ireland 100.00% (15) - 393- 24 AEP Elaiona S.A. Greece 50.00% 1 - 115 118 25 Peirga Kyth nou P.C. Greece 50.00% - - 4 1 26 Sunrise III Re al Estate Single Mem ber S.A. Greece 100.00% - - 13 13 27 Sunrise III N P L Finance DAC Ireland - - - 161 174
10
of which € 14 million and € 727 million relate to current assets and non current assets, respectively
11
of which € 393 million relate to non current assets
Piraeus Financial Holdings Group – 31 December 2023
347
31/12/2022 Participation Profit/ (loss) Total Total s/n Company Country Total assets % before tax revenues liabiliti es 1 Crete Scient. a nd Tech. Park Mana g. and Dev. Co. S.A. Greece 30.45% - - - - 2 Evros' Deve lopment Company S.A. Greece 30.00% - - - - APE Commercial Property Real E state T ourist and 3 Greece 27.80% (1) - 6 1 Developm ent S.A. APE Fixed As sets Real Estate Tou rist and 4 Greece 27.80% - - 49 5 Developm ent S.A. British Virgin 5 Trieris Real Es tate LTD 26.35% - - 5 - Islands 6 APE Investme nt Property S.A. Greece 28.92% - - 173 8 7 Omicron C y clos Ena S y mmetohi ki S.A. Greece 28.10% - - 115 140 8 Exodus S.A. Greece 49.90% (1) 2 - 2 9 Piraeus - TA N EO Capi tal Fund Greece 50.01% 5 - 2 - 10 Teiresias S.A. Greece 23.53% - 17 18 15 11 PJ Tech Catal y st Fund Greece 30.00% 5 - 11 - 12 Pyrrichos S.A. Greece 55.95% (1) - 6 21 13 Piraeus Dire c t Service s S.A. Greece 49.90% 1 19 4 1 14 Gaia S.A. Greece 24.92% (1) 5 14 10 15 Olganos S.A. Greece 32.27% - - 7 10 16 Abies S.A. Greece 40.14% - - - - 17 ΕΤVΑ Indu strial Parks S.A. Greece 1.00% (2) 8 218 20 Euromedica So c iete A nonyme for provis ion of 18 Greece 29.35% (15) 47 198 204 medical serv ices 19 Neuropublic S.A. Greece 5.00% 1 6 24 12 20 MIG Holdin g s S.A. Greece 31.19% (22) 10 1,251 1,161 21 Intrum Hell as REO Soluti ons S.A. Greece 19.96% (3) 5 58 7 22 Intrum Hell as Credit Serv icing S.A. Greece 20.00% 107 230 601 172 23 ANEK Lines S.A. Greece 27.68% (20) 185 273 335 24 Perigenis Bu siness Prope rties S.A. Greece 20.61% - - 47 - 12 25 Strix Holdi ngs LP Ireland 100.00% 16 - 587- 26 Strix Asset Ma nagement Ltd Ireland 25.00% - - 7 - 13 27 Strix Holdi ngs II LP Ireland 100.00% - - 250 4 28 AEP Elaiona S.A. Greece 50.00% (4) - 108 110 29 Peirga Kyth nou P.C. Greece 50.00% 1 - 4 1 30 Sunrise III Re al Estate Single Mem ber S.A. Greece 100.00% - - - -
12
of which € 2 million and € 585 million relate to current assets and non current assets, respectively
13
of which € 250 million relate to non current assets
Piraeus Financial Holdings Group – 31 December 2023
348
26 Intangible assets
Group Other Goodwill Software Total intangible Cost At 1 January 2022 9 744 50 803 Opening balance of newly consolidated compan ies 14 5 - 19 Additions - 71 - 71 Transfers 3 8 - 11 At 31 December 2022 27 828 50 904 Opening balance of newly consolidated comp anies (Note 25A) 21 1 - 22 Additions - 92 - 92 Transfers - 7 1 8 Disposals and write-offs - (5) - (5) Derecognitio ns - (2) - (2) Impairment (Note 25A) (2 1) - - (22) At 31 December 2023 26 920 51 997 Accumulated amortisation At 1 January 2022 - (491) (45) (536) Amortisation charge - (55) (1) (56) At 31 December 2022 - (546) (46) (592) Opening balance of newly consolidated comp anies - (1) - (1) Amortisation charge - (59) (1) (60) Disposals and write-offs - 1 - 1 Derecognitio ns - 2 - 2 At 31 December 2023 - (603) (46) (650) Net book value At 31 December 2022 27 282 4 312 At 31 December 2023 26 317 5 347
Piraeus Financial Holdings Group – 31 December 2023
349
27 Property and equipment
Equipment Assets under Land and and other Right of use construction Leasehold Group Total buildings tangible assets / improvements assets development Cost At 1 January 2022 683 282 178 33 174 1,349 Acquisition of subsidiaries 62 1 (24) - - 40 Additions 5 25 23 6 5 64 Transfers (226) - (10) (8) - (244) Disposals and write-offs (2) (9) (11) - (7) (29) Derecognitio ns (1) - (1) - (3) Revaluations 10 - - - - 10 Impairment (1) - - - (3) (4) Other movements - (1) (1) - - (2) At 31 December 2022 530 298 153 31 169 1,181 Acquisition of subsidiaries 28 93 1 1 - 124 Additions 7 20 28 9 7 71 Transfers 6 2 (8) (8) (1) (9) Disposals and write-offs (3) (4) (23) - (7) (37) Derecognitio ns (29) (96) (1) (2) (1) (129) Revaluations - - - - - - Impairment (1) - - - (7) (8) Other movements - (1) - - - (1) At 31 December 2023 538 312 151 31 160 1,192 Accumulated depreciation At 1 January 2022 (78) (206) (94) - (81) (459) Acquisition of subsidiaries - (1) 9 - - 9 Depreciation ch arge for the year (8) (19) (18) - (5) (49) Transfers 14 - 8 - - 23 Disposals and write-offs - 8 3 - 6 17 Derecognitio ns - - 2 - - 2 Other movements - 5 - - - 5 At 31 December 2022 (72) (212) (89) - (80) (453) Acquisition of subsidiaries (22) (65) (1) - - (88) Depreciation ch arge for the year (7) (14) (20) - (4) (46) Transfers (2) - 6 - - 4 Disposals and write-offs - 4 21 - 7 32 Derecognitio ns 22 69 1 - 1 93 Other movements - (2) - - - (2) At 31 December 2023 (81) (221) (81) - (77) (460) Net book value At 31 December 2022 458 86 64 31 89 728 At 31 December 2023 458 91 70 31 83 732
Refer to Note 25A for information on the subsidiaries acquired in 2023.
Piraeus Financial Holdings Group – 31 December 2023
350
At the end of the reporting period the Group’s “Right of use assets” includes an amount of € 57 million (31 December 2022:
€ 60 million) relating to leases of land and buildings. Line item ”Derecognitions” mainly refers to loss of control over
subsidiaries that occurred in 2023. Refer to Note 47 for further information.
28 Investment property
Group Owned Right-of-use Total property assets At 1 January 2022 977 64 1,041 Acquisition of subsidiaries 250 27 278 Net gain / (losse s) from fair value measuremen t (Note 11) 43 (6) 38 Additions 66 - 66 Transfers 121 2 123 Disposals and write-offs (17) - (17) Other movements (4) - (4) Derecognitio ns (2) - (2) At 31 December 2022 1,434 88 1,522 Acquisition of subsidiaries 247 - 247 Net gain/ (losse s) from fair value measuremen t (Note 11) 32 (11) 21 Additions 33 - 33 Transfers 91 (33) 58 Disposals and write-offs (52) - (52) Other movements (1) - (1) Derecognitio ns (72) - (72) At 31 December 2023 1,712 44 1,757
For information on rental income recognised from investment property, refer to Note 8. Direct operating expenses arising
from investment property generating rental income for the Group for the year ended 31 December 2023 amounted to € 7
million (31 December 2022: € 4 million) and € 3 million for the properties not rented, for both 2023 and 2022
The fair value measurements of investment property are classified within Level 3 of the fair value hierarchy. Refer to Note
3.1 for additional information on how the Group determines the fair value of its investment property.
Refer to Note 25Α for information on the subsidiaries acquired in 2023.
29 Assets held for sale
As at 31 December 2023, the carrying amount of the Group's HFS assets was € 241 million (31 December 2022: € 406
million), mainly comprising loans and advances to customers. Refer to Note 5 for the breakdown of such HFS assets
across business segments. The total amount charged to the income statement in 2023 was € 273 million, of which €
262 million, € 8 million and € 3 million, recognised in line items "Impairment (losses) / releases on loans and advances
to customers at amortised cost", “Οther credit-risk related expenses on loans and advances to customers at amortised
cost” and "
Impairment (losses) / releases on other assets", respectively. Further information on significant events
and transactions during the year is set out below:
Piraeus Financial Holdings Group – 31 December 2023
351
Material NPE portfolios classified as HFS during the reporting period
Delta: Portfolio Delta, which primarily includes NPEs originated in Romania, was classified as HFS in June 2023. As at 31
December 2023, the carrying amount of the portfolio was written down to € 34 million, while the corresponding impairment
loss charged in the Group's income statement was € 42 million. The sale is expected to be completed in the second quarter
of 2024.
Monza: The said portfolio mainly comprises SME, corporate, mortgage, small business and consumer loans. The HFS criteria
were met in December 2023 and following the HFS classification, the Group recognized an impairment loss of € 52 million.
The sale is expected to be completed in the second quarter of 2024. Refer to Note 3 for further information.
NPE portfolios classified as HFS and sold during the reporting period
Senna: The sale of the portfolio was initiated and completed in the second quarter of 2023. The Group recognized a total
loss of € 123 million, as a result of the HFS classification and write-down to fair value prior to completion of the sale.
Wheel II: The Group initiated and completed the sale process of an NPE corporate loan portfolio, namely “Wheel II”, in
2023. The Group recognized an impairment loss of € 19 million as a result of the portfolio’s write-down prior to completion
of the sale in July 2023.
Assets classified as HFS in previous reporting periods and derecognized during the current reporting period
Sunshine: Sunshine Leases Single Member S.A., a subsidiary of the Bank established in May 2022 following a corporate
demerger whose assets and liabilities were classified as HFS, was sold in August 2023. The carrying amount of the assets as
at 31 December 2022 was € 95 million, while the corresponding impairment loss charged in the Group's income statement
during 2023 was € 12 million.
Sunrise III portfolio: The Sunrise III portfolio of securitized NPEs was classified as HFS in 2022 and its carrying amount as of
31 December 2022 was € 169 million. During 2023, the Group recognized an impairment loss of € 25 million. Refer to Note
3 for further information.
Other portfolios: During 2023, the Group sold certain NPE portfolios, namely Trinity IX, Trinity XΙ and other NPEs that were
classified as HFS in the fourth quarter of 2022. The total carrying amount of these portfolios as of 31 December 2022,
amounted to € 26 million.
Portfolios classified as held for sale in prior years
The total carrying amount of NPEs classified as HFS prior to 2023, mainly comprising portfolios Solar and Navy, amounted
to € 117 million and € 116 million as at 31 December 2023 and 2022, respectively. The Group remains committed to its
plan, hence, these portfolios are expected to be sold throughout the next twelve months.
Piraeus Financial Holdings Group – 31 December 2023
352
30 Other assets
Group Company 31/12/2022 31/12/2023 As 31/12/2023 31/12/2022 reclassified Inventories - prope r ty 1,309 1,391 - - Accumulated impairmen t of inventories - property (142) (131) - - Net amount of inventories - prope rty (A) 1,167 1,260 - - Other inventori es 97 69 - - Accumulated impairmen t of other inventori es (6) (1) - - Net amount of other inven t ories (Β) 91 68 - - Total net amount of inventor ies (A) + (B) 1,258 1,328 - - Prepaid expense s 29 44 - - Accrued income 47 21 20 20 Claims from tax authoritie s and the Greek State 13 16 - - Credit Cards-settlement acco unt 63 54 - - Deposit and Inve stment Guarantee Fund (HDIGF) 342 582 - - Other 257 282 51 51 Total other non financial assets 752 1,000 71 71 Accumulated impairmen t of other no n financial assets (102) (97) (58) (56) Net amount of other non finan cial assets (C) 650 903 13 15 Claims from the Greek State 541 597 - - Credit Cards 89 83 - - Accrued income 11 14 6 13 Receivables 94 93 18 16 Other 549 512 - - Total other financial assets 1,285 1,300 24 29 ECL allowance of other fin ancial assets (196) (174) - - Net amount of other financial as set s (D) 1,089 1,125 24 29 Other assets (A) + (B) + (C) + (D) 2,996 3,357 37 44 of which (excludin g inventory): Current 792 756 24 29 Non-current 947 1,272 13 15
The loss of € 52 million reported under line “Impairment (losses) / releases on other assets” of the Income Statement,
mainly includes impairment charges of inventory property of € 20 million included in line “Accumulated impairment of
inventories – property” and ECL impairment of other financial assets amounting to € 24 million, included in line “ECL
allowance of other financial assets”.
Inventory property mainly comprises real estate property acquired through auctions. The accumulated impairment of
inventory refers to the monetary difference between cost and net realisable value. As at 31 December 2023, the carrying
amount of inventory pr operty that was written down to its net realizable value amounted to € 442 million and is included
in line “Net amount of inventories – property” (31 December 2022: € 650 million).
Piraeus Financial Holdings Group – 31 December 2023
353
Other non-financial assets
Line item “Deposit and Investment Guarantee Fund (HDIGF)” refers to the Bank’s participation in assets of HDIGF.
More specifically:
• In accordance with art. 9, par. 1 of Greek Law 4370/2016, the cap for the amount of deposits guaranteed by the
HDIGF is € 100 thousand per client.
• Article 144 of Greek Law 4972/2022, which adds Article 25a to Law 4370/2016, provides that the Supplementary
Deposit Cover Fund ("SDCF") is an asset of the credit institutions based on their proportional participation. It outlines
that the SDCF assets will be gradually returned to the credit institutions in three annual installments throughout
2022-2024. The Bank received in December 2023 the second installment, which amounted to € 248 million.
• In accordance with article 13 of Greek Law 4370/2016, HDIGF compensates investor-clients for a maximum
protection limit of € 30 thousand for the aggregate investment services provided by a participating credit institution,
in default. The participating credit institutions paid their first contributions in 2010. The said contributions are made
in a dedicated contributions reserve account which is jointly owned by the credit institutions. Each credit institution
participating in the Investment Cover Scheme (“ICS”) has an individual share in the said reserve account which is
proportional to its participation in the ICS assets, in accordance with article 30 of Greek Law 4370/2016.
• In accordance with article 36, par. 1 to 3 of Greek Law 4370/2016, the source of HDIGF’s Resolution Scheme funds,
comprises recurring ex ante contributions, non-recurring ex post contributions and alternative means of funding,
pursuant to internal articles 98 to 100 of article 2 of Greek Law 4355/2015.
• Under Regulation (EU) 806/2014, the Bank is subject to annual ex-ante contributions, calculated by the SRB.
Line item “Other” primarily comprises prepayment assets and transitional accounts expected to be settled in the following
period.
Other financial assets
Line item “claims from the Greek State” mainly comprises amounts claimed by the Bank from the Greek State relating to
loans guaranteed by the latter, whilst line item “Other” mainly relates to trade receivables and receivables from guarantees
given.
The credit cards receivable, included in other financial assets, mainly refers to unsettled transactions as well as installments
not yet due by the cardholders, which have been advanced to merchants.
The tables below illustrate the movement of line item “ECL allowance of other financial assets” for the Group in 2023 and
2022.
Piraeus Financial Holdings Group – 31 December 2023
354
Movement of ECL allowance Group Stage 1 Stage 2 Stage 3 Total ECL allowance as at 1/1/2023 1 1 172 174 Reversal of unutil ised impairment allowan ce - - (2) (2) Charge for the year - 2 22 24 At 31/12/2023 1 3 192 196
Movement of ECL allowance Group Stage 1 Stage 2 Stage 3 Total ECL allowance as at 1/1/2022 1 1 165 167 Reversal of unutili sed impairment allowance - - (4) (4) Charge for the year - - 11 11 Write-off of impairment losses - - (1) (1) Other movements - - 1 1 At 31/12/2022 1 1 172 174
As of 31 December 2023 and 2022 the Company has not recognised any ECL allowance on other financial assets.
Ageing analysis of other financial assets
Group Days past due - Gross Carrying Amou nt 181-1-30 31-90 91-180 365+ Denoun- 31/12/2023 Current 365 Total Stage 1 Stage 2 Stage 3 Total days days days days ced days Claims from the Greek State 60 4 - - 1 476 - 541 474 15 53 541 Credit cards 89 - - - - - - 89 89 - - 89 Receivables 181 85 28 133 33 194 - 654 449 39 166 654 Tot al 330 89 28 133 34 670 - 1,285 1,011 54 219 1,285
Group Days past due - Gross Carrying Amou nt 181-31/12/2022 1-30 31-90 91-180 365+ Denoun- Current 365 Total Stage 1 Stage 2 Stage 3 Total As reclassified days days days days C ed days Claims from the Greek State 82 7 2 1 129 375 - 597 538 16 42 597 Credit cards 83 - - - - - - 83 83 - - 83 Receivables (as reclassified – refer to Note 49) 221 115 55 57 2 169 - 620 417 36 168 620 Total 386 122 57 58 131 544 - 1,300 1,038 53 211 1,300
Piraeus Financial Holdings Group – 31 December 2023
355
Company
Days past due - Gross Carrying Amount
31/12/2023
Current
1-30
days
31-90
days
91-180
days
181-
365
days
365+
days
Denoun-
ced
Total
Stage 1
Stage 2
Stage 3
Total
Receivables
-
20
-
-
-
4
-
24
20
-
4
24
Company
Days past due - Gross Carrying Amount
31/12/2022
Current
1-30
days
31-90
days
91-180
days
181-
365
days
365+
days
Denoun-
ced
Total
Stage 1
Stage 2
Stage 3
Total
Receivables
-
18
-
11
-
-
-
29
18
-
11
29
31 Due to banks
Group 31/12/2022 31/12/2023 As reclassified Amounts due to ECB and ce ntral banks 3,590 5,443 Interbank depo s its 61 159 Securities sold to cre dit institution s under agreements to repu rchase 435 298 Other (as reclassified – re fer to Note 49) 532 285 4,618 6,185 of which: Current 4,175 2,518 Non-current 443 3,667
Line item “Amounts due to ECB and central banks” includes the funding liabilities of the Bank due to ECB, in the context of
the TLTRO III program. As at 31 December 2023, funding from the ECB through TLTRO decreased to € 3.5 billion from the
previously outstanding amount of € 5.5 billion, since the Group repaid € 2 billion tranche following its maturity in December
2023.Interest expense regarding the TLTRO III funding for the year ended 31 December 2023 amounted to € 182 million
(
31 December 2022
: € 70 million) and was recognized in line item “Net Interest Income”. Refer to Note 6.
Line item “Other” mainly comprises: i) long term borrowings from European Investment Bank and ii) cash collateral received
by the Bank in the context of derivative transactions engaged under ISDA and CSA agreements.
Piraeus Financial Holdings Group – 31 December 2023
356
32 Due to customers
Group 31/12/2023 31/12/2022 Corporate Current and sight de posits 13,593 14,101 Term deposits 3,543 3,120 Blocked de posits, guarantee deposits and o t her accounts 399 324 Total (A) 17,536 17,545 Retail Current and sight de posits 7,765 7,672 Savings accounts 24,184 25,795 Term deposits 9,962 7,210 Blocked de posits, guarantee deposits and o t her accounts 40 39 Total (B) 41,952 40,717 Cheques payable and remittan ces (C) 79 110 Total due to customers (A)+(B)+(C) 59,567 58,372 of which: Current 59,516 58,345 Non-current 51 27
As at 31 December 2023 the Group’s due to customers (excluding cheques payable and remittances) bearing variable
interest rate and fixed interest rate amounted to € 45.9 billion and € 13.6 billion, respectively (31 December 2022: € 47.8
billion and € 10.5 billion, respectively).
33 Debt securities in issue
Group Weighted Interest Rate (%) 31/12/2023 31/12/2022 Senior Preferred Bond 3.875% 501 501 Senior Preferred Bond 8.250% 374 349 Senior Preferred Bond 7.250% 514 - Senior Preferred Bond 6.750% 497 - Total debt securities in i ssue 1,886 849
Piraeus Financial Holdings Group – 31 December 2023
357
The financial terms of the Group’s debt securities held by third parties as of the end of the reporting period, are as follows:
Weighted Intere s t Nominal Nominal Outstanding Underlying Maturity Rate on Total Nominal Redem- amount amount Carrying Weighted Issuer Description Issue Date Currency nominal Loan Type Date Outstanding Am ount/ value ptions own held by held by value Interest Rate amount Coupon Frequency the Bank third party 31/12/2023 Senior Preferred Bond Fixed Rate Piraeus Ban k S.A. Senior Pref erred - 3-Nov-21 3-Nov-27 EUR 3.875% / Annual 500 500 - - 500 501 3.875% Bond Fixed Rate Piraeus Bank S.A. Senior Pref erred - 28-Nov-22 28-Jan-27 EUR 8.250% / Annual 350 350 - - 350 374 8.250% Bond Fixed Rate Piraeus Ban k S.A. Senior Pref erred - 13-Jul-23 13-Jul-28 EUR 7.250% / Annual 500 500 - - 500 514 7.250% Bond Fixed Rate Piraeus Bank S.A. Senior Pref erred - 5-Dec-23 5-Dec-29 EUR 6.750% / Annual 500 500 - - 500 497 6.750% Bond
Piraeus Financial Holdings Group – 31 December 2023
358
Weighted Intere s t Nominal Nominal Outstanding Underlying Maturity Rate on Total Nominal Redempti amount amount Carrying Weighted Issuer Description Issue Date Currency nominal Loan Type Date Outstanding Am ount/ value ons own held by held by value Interest Rate amount Coupon Frequency the Bank third party 31/12/2022 Senior Preferred Bond Fixed Rate Senior Piraeus Ban k S.A. - 3-Nov-21 3-Nov-27 EUR 3.875% / Annual 500 500 - - 500 501 3.875% Preferre d B ond Fixed Rate Senior Piraeus Ban k S.A. - 28-Nov-22 28-Jan-27 EUR 8.250% / Annual 350 350 - - 350 349 8.250% Preferre d B ond
The transactions regarding debt securities in issue during the year ended 31 December 2023 are as follows:
On 5 December 2023, the Bank issued Senior Preferred Notes of nominal value € 500 million, maturing in December 2029, bearing an annual fixed interest rate of 6.75% for
the first 5 years and reset once thereafter, at the prevailing mid swap rate plus 3.837% per annum. The Senior Preferred Notes may be redeemed at par by the issuer on 5
December 2028. The Senior Preferred Notes were issued under the Euro Medium Term Notes (“ΕΜΤΝ”) Programme.
On 13 July 2023, the Bank issued Senior Preferred Notes of nominal value € 500 million, maturing in July 2028, bearing an annual fixed interest rate of 7.25% for the first 4
years and reset once thereafter, at the prevailing mid swap rate plus 3.692% per annum. The Senior Preferred Notes may be redeemed at par by the issuer on 13 July 2027.
The Senior Preferred Notes were issued under the ΕΜΤΝ Programme.
The accrued interest of the debt securities in issue for the year 2023 and 2022 is € 49 million and € 6 million, respectively.
The following table includes the financial terms of debt securities retained by the Group as of the end of the reporting period:
Piraeus Financial Holdings Group – 31 December 2023
359
Weighted Intere s t Outstanding Underlying Loan Maturity Nominal Accumulated Issuer Description Issue Date Currency Rate/ Coupon nominal Redemptions Type Date value Cancellati ons Frequency amount 31/12/2023 Covered Bonds 1m Euribor + 150bp / Piraeus Ban k S.A. Floating rat e covered bond Series 3 Mortgage loan s 16-Feb-17 16-Nov-26 EUR 1,000 500 - 500 Monthly 3m Euribor + 150bp / Piraeus Ban k S.A. Floating rat e covered bond Series 5 Mortgage loan s 20-Nov-17 20-May-24 EUR 1,000 500 - 500 Quarterl y 3m Euribor + 150bp / Piraeus Ban k S.A. Floating rat e covered bond Series 6 Mortgage loan s 31-Jan-18 31-Jan-26 EUR 1,000 500 - 500 Quarterl y 3m Euribor + 150bp / Piraeus Ban k S.A. Floating rat e covered bond Series 7 Mortgage loan s 11-May-18 11-Feb-27 EUR 1,000 1,000 - - Quarterl y
Weighted Intere s t Outstanding Underlying Loan Maturity Nominal Accumulated Issuer Description Issue Date Currency Rate/ Coupon nominal Redemptions Type Date value Cancellati ons Frequency amount 31/12/2022 Covered Bonds 1m Euribor + 150bp / Piraeus Ban k S.A. Floating rat e covered bond Series 3 Mortgage loan s 16-Feb-17 16-Nov-26 EUR 1,000 500 - 500 Monthly 3m Euribor + 150bp / Piraeus Ban k S.A. Floating rat e covered bond Series 5 Mortgage loan s 20-Nov-17 20-May-24 EUR 1,000 500 - 500 Quarterl y 3m Euribor + 150bp / Piraeus Ban k S.A. Floating rat e covered bond Series 6 Mortgage loan s 31-Jan-18 31-Jan-26 EUR 1,000 500 - 500 Quarterl y 3m Euribor + 150bp / Piraeus Ban k S.A. Floating rat e covered bond Series 7 Mortgage loan s 11-May-18 11-Feb-27 EUR 1,000 1,000 - - Quarterl y
Piraeus Financial Holdings Group – 31 December 2023
360
As at 31 December 2023 and 2022 the carrying amount of loans and advances to customers at amortised cost that have
been pledged as collateral under the terms of the covered bonds programme is € 3,341 million and € 3,779 million,
respectively.
For further information about Covered bonds refer to the Company’s website in the Investor Relations and Base Prospectus
(Covered Bonds | Piraeus Financial Holdings (piraeusholdings.gr)).
34 Other borrowed funds
Other borrowed funds for both the Group and the Company comprise solely of two (2) Tier 2 subordinated notes of nominal
value € 400 million and € 500 million, maturing in June 2029 and February 2030, respectively. As at 31 December 2023, the
carrying value of the said notes for the Group amounted to € 419 million and € 520 million, respectively (31 December
2022: € 418 million and € 519 million, respectively), including total accruals of € 44 million (31 December 2022: € 44 million).
The aforementioned notes may be redeemed by the issuer, at par, on 26 June 2024 and 19 February 2025, respectively,
subject to prior regulatory approval. Furthermore, the said notes bear annual fixed rates of 9.75% and 5.5% for the first fiv e
years and reset once thereafter at the prevailing 5 year mid swap rate plus 9.952% and 5.774%, respectively.
During the year ended 31 December 2023, the Group did not proceed with any repurchases or new issuances of other
borrowed funds. In January 2024 the Group executed a partial repurchase of the Tier 2 subordinated notes due in June
2029, simultaneously issuing new Tier 2 subordinated notes of nominal value € 500 million (for more information refer to
Note 52).
35 Other liabilities
Group Company 31/12/2022 31/12/2023 As 31/12/2023 31/12/2022 reclassified Deferred income 14 29 - - Accrued expense s 110 108 35 3 Lease liabili t ies 91 104 1 1 Liabilities from transactio ns via DIAS 532 259 - - Non-income taxes payab le and social security co ntributions 46 40 1 1 Creditors and suppl iers 72 79 2 27 Collection s for third parties 303 193 - - Other 290 302 21 23 1,459 1,113 60 55 of which: Current 1,088 864 60 55 Non-current 371 249 - -
The following table summarises the lease liabilities:
Piraeus Financial Holdings Group – 31 December 2023
361
Group Company Lease liabilities 31/12/2023 31/12/2022 31/12/2023 31/12/2022 No later than one year 28 24 - - One to five years 61 64 1 - Later than five years 11 29 - 1 Gross lease liabi l ities 100 117 1 1 Discounting (9) (13) - - Lease liabil ities 91 104 1 1 of which: No later than one year 24 19 - - One to five years 56 57 - - Later than five years 11 28 1 1
Refer to Note 40 for further information on lease liabilities.
36 Provisions
The movement of the Group’s provisions during the year is summarized below:
Group ECL allowance on Litigations Other Total credit commitments At 1 January 2022 29 4 103 136 Provision charge / (release) 20 27 (11) 36 Provision util ised (21) (26) - (47) Other movements (1) - - (2) At 31 December 2022 26 5 92 124 Provision charge / (release) 9 45 (11) 43 Provision util ised (1) (3) - (4) Other movements - 1 - 1 At 31 December 2023 34 48 82 164
The Group establishes provisions for all litigations, for which it believes it is probable that a loss will incur in the future and
the amount of the loss can be reasonably estimated. These provisions may change from time to time, as appropriate, in
light of additional information. Management, following consultation with its legal advisors has concluded that the amount
of recognized provisions for outstanding litigations is sufficient.
The ECL allowance on credit commitments is estimated based on the same methodology applied for loans and advances to
customers at amortised cost. Refer to Note 4.3.1.
Piraeus Financial Holdings Group – 31 December 2023
362
37 Tax receivables
Group Company 31/12/2023 31/12/2022 31/12/2023 31/12/2022 Tax receivables 204 197 7 12 Accumulated impai rment of tax receivab les (43) (51) - - Net tax receivables 161 145 7 12
Net tax receivables for the Group as at 31 December 2023 amounted to € 1 61 million (31 December 2022: € 1 45 million),
of which € 152 million and € 7 million are attributable to the Bank and the Company, respectively, and € 2 million to other
subsidiaries of the Group.
Piraeus Bank S.A.
Net tax receivables comprise the following:
a) Receivables from withholding taxes on interest of bonds and treasury bill s of € 62 million relating to financial years
2009, 2011, 2012 and 2013 (tax years 2008, 2010, 2011 and 2012). Under the provisions of Greek Law 4605 (article 93,
par.1 and 2), as published at Gazette Α' 52 on 1 April 2019, an amendment was introduced into the ITC, clarifying the
status of the aforementioned withholding tax receivables of the Bank , as follows:
 Withholding taxes of € 26 million, in accordance with the provisions of para. 8 of article 12 of Greek Law 2238/1994,
for the financial year 2013 (tax year 2012), are offset as a priority when income tax is incurred and to the extent that
such income tax is sufficient for the purposes of the above set-off. In addition, an amount of € 7 million, withheld
on the same basis, for the financial year 2010 (tax year 2009) is claimed from the Greek State; and
 Withholding taxes of € 29 million, which are subject to the provisions of para. 6 of article 3 of Greek Law 4046/2012
and not offset within five (5) years, can be netted off against tax liabilities of the Bank in equal instalments within
10 years, starting from 1 January 2020.
b) Withholding taxes of € 30 million deriving from interest income earned on Greek Government treasury bills, which were
withheld after 1 January 2013. Such tax receivables are offset against income tax available in the five (5) financial years
following the financial year in which the income tax was withheld. Upon completion of the five-year period, any remaining
withholding tax is netted off against current tax liabilities.
c) Withholding taxes of € 55 million arising from corporate bonds, which are refundable by the Greek State.
d) Various other tax claims of € 5 million.
Piraeus Financial Holdings Group – 31 December 2023
363
38 Deferred Taxes
Deferred taxes for the Group and the Company are calculated on all temporary differences under the liability method. The
nominal tax rates of Group subsidiaries are different compared to the nominal tax rate of the Company (Note 16).
The Group’s d eferred tax assets and liabilities are attributable to the following items:
Group 31/12/2023 31/12/2022 Deferred tax liabili ties Investment securities valu ation adjustment 1 - Investment property fair valu e adjustment 8 9 Other temporary difference s - 1 Total 9 10
Group 31/12/2023 31/12/2022 Deferred tax assets Pensions and o t her post retirement bene f its 13 14 Loans and advance s to customers 4,593 4,808 Derivative financial instruments valuation adjustment 105 98 Investment property fair valu e adjustment 55 41 Depreciation o f property and equipment (49) (28) Amortisation of Intangi ble assets (22) (16) Recognitio n of tax losses carried forward 4 2 Impairment of Greek go vernment bonds (PSI) 995 1,050 Investments 3 5 Other temporary difference s 14 (2) Reserve from financial assets a t F VTOCI (7) 3 Total 5,703 5,974 Net deferred tax asset 5,694 5,964
Management estimated that the tax losses carried forward of € 1 6 million for the Group as at 31 December 2023 can be
used to offset future taxable profits and thus the Group recognised a DTA amounting to € 4 million (31 December 2022: €
2 million). In relation to the tax losses of € 16 million, for the amount of € 6 million there is no predefined time horizon for
being netted off against taxable income, whereas the amount of € 10 million can be netted off in the five (5) financial years
following the financial year in which the income tax was withheld.
DTA on tax losses carried forward is recognised only when it is probable that future taxable profits will be available, against
which these carried forward tax losses can be utilised. On this base the Group and the Company have unused tax losses as
at 31 December 2023 of € 3,845 million and € 1,732 million, respectively (31 December 2022 : € 1,944 million and € 1,762
million for the Group and the Company, respectively), for which no DTA was recognized in the Statement of Financial
Position. The variance of € 1,901 million is mainly attributable to the acquisition of MIG Holdings S.A. Refer to Note 25A for
further details. Furthermore, temporary differences, for which no DTA was recognized in the Statement of Financial
Piraeus Financial Holdings Group – 31 December 2023
364
Position, arising from written off loans, amounted to € 1,071 million as of 31 December 2023 and 2022 for the Group.
The Group and the Company have offset the DTA and deferred tax liabilities on an entity per entity basis, based on the
legally enforceable right to set off the recognised amounts i.e. offset current tax assets against current tax liabilities, as well
as the DTA and deferred tax liabilities when such taxes relate to the same fiscal authority.
Group 1/1 - 31/12/2023 1/1 - 31/12/2022 Net deferred tax asset at 1/1 5,964 6,060 Deferred tax benefit / (expen se) (269) (126) Financial assets at FVTOCI (Note 18) - 36 Actuarial gains / (lo ss es) (Note 18) 1 (3) Derecognitio n of subsidiaries (2) - Property revaluation reserve (Note 18) - (3) Other 1 - Net deferred tax asset at 31/12 5,694 5,964
During 2023, deferred taxation directly recognized in equity for the Group amount ed to € 1 million, relating to the valuation
of financial assets at FVTOCI and actuarial gains/ (losses) (Note 18).
The deferred tax recogni sed in the Income Statement is attributed to temporary differences between the tax and
accounting base, the effect of which is analysed in the table below:
Piraeus Financial Holdings Group – 31 December 2023
365
Group Deferred tax (Income Statement) 1/1 - 31/12/2023 1/1 - 31/12/2022 Pensions and o t her post retirement bene f its (2) (3) Loans and advance s to customers (215) (263) Derivative financial instruments valuation adjustment 7 101 Investment property fair valu e adjustment 17 34 Depreciation o f property and equipment (21) 14 Amortisation of Intangi ble assets (6) 15 Recognitio n of tax losses carried forward 2 1 Impairment of Greek go vernment bonds (PSI) (55) (55) Investments (2) 4 Other temporary difference s 17 9 Reserve from financial assets a t FVTOCI (10) 19 Total (269) (126)
Group Net deferred tax asset analysis 31/12/2023 31/12/2022 Current 316 256 Non-current 5,387 5,719 Total 5,703 5,974
Group Net deferred tax liability analysis 31/12/2023 31/12/2022 Current 1 - Non-current 8 9 Total 9 10
39 Retirement and termination benefit obligations
Retirement indemnities
Most of the Group’s subsidiaries are required by local law to offer a lump sum amount upon retirement. In Greece, this is
defined by Greek Law 2112/1920 as modified by Greek Law 4093/2012. Such lump sum payments are usually based on the
final salary and years of service, the calculation of which depends on the jurisdiction in which the subsidiary operates and
the employee’s occupation (e.g. Greek law provides for different retirement benefits to salaried employees, wages earners
and lawyers). In some cases, certain subsidiaries provide by law for additional benefits to employees in excess of the floor
defined under statutory requirements.
A summary of the Group’s defined benefit plans is provided below:
1. Lump sum retirement benefit according to Greek Law 2112/1920 and Greek Law 4093/2012
Lump sum retirement benefit is provided to the majority of employees of the Company, the Bank and Greek subsidiaries
as per the terms set out below:
Piraeus Financial Holdings Group – 31 December 2023
366
In accordance with Greek Law 4046/2012 and Board of Ministers’ Decision (6/28/2/2012), from 14 February 2012 onwards,
the employment contracts that lapse on attainment of the normal retirement age or based on the particular retirement
conditions, are considered as indefinite duration employment contracts and therefore, the provisions for employee’s
statutory retirement indemnity of Greek Law 2112/1920, are applicable.
On 12 November 2012, Greek Law 4093/2012 (GG A’ 222) decreased the statutory indemnity scale set by Greek Law
2112/1920 in case of employee dismissal or normal retirement. Employees having more than 16 full years of service to the
same employer as at 12 November 2012, are entitled to a statutory indemnity for all the years employed until that date.
Employees having less than 17 full years of service to the same employer as at 12 November 2012, the maximum statutory
indemnity is 12 actual salaries. In both conditions and in case of normal retirement, employees receive 40% of the statutory
indemnity scale set by Greek Law 2112/1920 and Greek Law 4093/2012. No indemnity is granted in the event of disability
before the standard retirement age or in the case of early retirement.
As per Law 4194/2013, lawyers receive a retirement benefit of 100%. In the event of voluntary resignation, the benefit is
paid as follows: 100% after 28 years of service, 66.67% after 20 years of service and 50% after 15 years of service.
2.
Lump Sum benefit according to Piraeus Bank Collective Agreement
A lump sum benefit is granted to certain employees of the Bank and the Company. The lump sum benefit is payable when
the member is eligible for full pension by the social security fund. The lump sum benefit is based on a pre-defined number
of salaries at 100% of the average salary of the last 3 months of active service prior to retirement. No lump sum benefit is
paid in case of death, disability or termination before reaching the standard retirement age.
3.
Lump Sum benefit according to employee contracts of Former Nat West Bank Employees
Certain employees of the former Nat West Bank, currently working in the Bank and hired prior to 31 December 1991, are
entitled to a lump sum benefit. This benefit is payable when the employee becomes eligible for full pension through the
social security fund or in the event of death. The lump sum benefit amounts to 100% of the retirement benefit as specified
in Greek Law 2112/1920 and Greek Law 4093/2012.
4. Lump Sum benefit according to the Agreement of Former Macedonia Thrace Bank Employees
Certain former employees of Macedonia Thrace Bank, who are currently employed in the Bank, are entitled to a lump sum
benefit as outlined in a collective agreement. The lump sum benefit becomes payable when the individual qualifies for full
pension from the social security fund.
5. Lump Sum benefit to former Macedonia Thrace Children’s Account
The lump sum benefit is paid to the children of former Macedonia Thrace Bank employees based on the calculation of the
predetermined liability when the child turns 25, or earlier under specific conditions. If the child passes away, the amount is
paid to the parent. In the event of the parent leaving the Bank, the amount contributed by the employee (not the Bank) is
refunded without interest. Should the departure be due to retirement, the plan can be sustained and funded by the ex-
employee’s pension salary, with the Bank continuing to pay contributions.
Piraeus Financial Holdings Group – 31 December 2023
367
6. Lump Sum benefit according to the insurance policy of certain Key Management Members
The Bank maintains an insurance contract regarding the lump sum benefit to be paid to certain members of Management.
This benefit is determined by the calculation of a predetermined liability and is payable upon termination of employment
in all cases, except for instances of fraud.
Piraeus Financial Holdings S.A. and Piraeus Financial Holdings Group
The present value of the defined benefit obligation is determined by an independent actuary by applying the "projected
unit credit method", according to which, the charge for pension plans to the income statement is allocated over the service
lives of the related employees. The defined benefit obligation is determined by the present value of cash outflows using
interest rates of high-quality corporate bonds, with a residual maturity similar to the term of the related liability.
The Group’s employees are entitled to compensation upon termination of service, based on their service, salary and
classification group.
Any benefits paid under the voluntary redundancy schemes for years 2023 and 2022 are included in the disclosures
pertaining to non-funded plans.
The tables below present the amounts recognized in the Statement of Financial Position and the Income Statement for the
Group and the Company, broken down by funded and non-funded plans.
Group Company Amounts recognised in the Statement of Fin ancial Position 31/12/2023 31/12/2022 31/12/2023 31/12/2022 Pension schemes – fun ded 3 4 - - Other post retirement be nefits - non-funded 49 51 - - Total 52 55 - -
Group Company Amounts recognised in Equity 1/1 - 31/12/2023 1/1 - 31/12/2022 1/1 - 31/12/2023 1/1 - 31/12/2022 Funded - Liability gain / (lo s s) due to changes in assumpti ons - 1 - - Total funded - 1 - - Non-funded Liability gain / (lo s s) due to changes in assumpti ons (3) 9 - - Liability expe r ience gain / (loss) arising du r ing the year - (1) - - Total non-funded (3) 8 - - Total (3) 9 - -
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Group Company Amounts recognised in the Income Statement 1/1 - 31/12/2023 1/1 - 31/12/2022 1/1 - 31/12/2023 1/1 - 31/12/2022 Total pension s chemes – funded - - - - Other post retirement and termin ation benefits of non-funded Current service cost 4 4 - - Interest cost 2 - - - Settlement/ Curtailment/ T erminatio n loss/ (gain) 56 58 - - Total other post retirement and t ermination benefits of non-funded 62 62 - - Total 62 62 - -
The difference between the amount of € 5 6 million relating to Settlement/ Curtailment/ Termination loss/ (gain) and the
amount of € 62 million reported as VES cost in Staff Cost (Note 12) is due to an additional provision charge for VES of € 5
million.
Α) Pension schemes - funded
The net liability in the Statement of Financial Position is determined as follows:
Group Company 31/12/2023 31/12/2022 31/12/2023 31/12/2022 Present value of fund ed obligations 5 5 - - Fair value of plan assets (2) (1) - - Total 3 4 - -
In funded plans, the Group follows the recommendations of the insurance company concerning the amount of
contributions. The expected contributions to funded post-employment defined benefit plans for 2024, amount to € 0.1
million. Τhere are no commitments arising from the law concerning the level of funding for post-employment defined
benefit plans provided by the Group.
The movement of the gross defined benefit obligation is analysed as follows:
Group Company 1/1 - 31/12/2023 1/1 - 31/12/2022 1/1 - 31/12/2023 1/1 - 31/12/2022 Opening balance 5 7 - - Benefits paid from the fun d (1) (1) - - Actuarial (gains) / losses - (1) - - Closing balance 5 5 - -
The movement in the fair value of plan assets for the Group and the Company is analysed as follows:
Piraeus Financial Holdings Group – 31 December 2023
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Group Company 1/1 - 31/12/2023 1/1 - 31/12/2022 1/1 - 31/12/2023 1/1 - 31/12/2022 Opening balance 1 2 - - Employer contribu t ions 1 - - - Benefits paid from the fun d (1) (1) - - Closing balance 2 1 - - Return on plan assets - - - -
The plan assets, which are not quoted, are invested as follows:
Group Company 31/12/2023 31/12/2022 31/12/2023 31/12/2022 Mutual funds 97.7% 97.6% - - Bonds 0.0% 0.0% - - Deposits 2.3% 2.4% - -
The net liability movement of funded pension schemes for the Group and the Company, is outlined below, broken down
into expenses, contributions, benefits and amounts recognized in equity:
Group Company 1/1 - 31/12/2023 1/1 - 31/12/2022 1/1 - 31/12/2023 1/1 - 31/12/2022 Opening balance 4 5 - - Employer contribu t ions (1) - - - Amount recogni s ed in equity - (1) - - Closing balance 3 4 - -
B) Other non-funded post retirement and termination benefits
The amounts recognised in the Statement of Financial Position are analysed as follows:
Group Company 31/12/2023 31/12/2022 31/12/2023 31/12/2022 Present value of un f unded obligations 49 51 - - Liability in the Statemen t of Financial Position 49 51 - -
The movement in the defined benefit obligation is analysed as follows:
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Group Company 1/1 - 31/12/2023 1/1 - 31/12/2022 1/1 - 31/12/2023 1/1 - 31/12/2022 Opening balance 51 70 - - Current service cost 4 4 - - Interest cost 2 - - - Settlement/ Curtailment/ T erminatio n loss/ (gain) 56 58 - - Benefits paid di rectly by the employer (68) (73) - - Actuarial (gains) / losse s 3 (8) - - Derecognitio n of subsidiaries - (1) - - Closing balance 49 51 - -
The movement in the liability recognised in the Statement Financial Position for the Group and the Company, broken down
into expenses, contributions, benefits and amounts recognized in equity is analysed as follows:
Group Company 1/1 - 31/12/2023 1/1 - 31/12/2022 1/1 - 31/12/2023 1/1 - 31/12/2022 Opening balance 51 70 - - Total expense reco gnised in Income statement 62 63 - - Benefits paid by th e employer (68) (73) - - Amount recogni s ed in equity 3 (8) - - Derecognitio n of subsidiaries - (1) - - Closing balance 49 51 - -
The expected weighted average duration of the defined benefit obligation is 5.8 years for the Group and 8.7 years for the
Company.
The actuarial assumptions used are as follows:
Group Company 31/12/2023 31/12/2022 31/12/2023 31/12/2022 Discount rate 3.2% 3.8% 3.2% 3.9% Price inflation 2.0% 2.6% 2.0% 2.6% Expected return on pl an assets 3.2% 3.7% - - Future increase in salari es 2.5% 2.0% 2.5% 2.0% Mortality table appl ied Eurostat mortality table Eurostat mortality table specific to Greece specific to Greece
According to IAS 19, the rate used to calculate the expected return on plan assets is the discount rate that is used to discount
the post-employment benefit obligation.
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Sensitivity analysis in defined benefit obligation
The sensitivity analysis for the significant assumptions in the post-employment defined benefit obligation is as follows:
Effect in defined benefit obligation Effect in defined benefit obligation (Group) (Company) Main assumptions Change in the Change in the Increase Decrease Increase Decrease assumptions assumptions Discount rate +/-0.50% -2.7% 2.9% +/-0.50% -4.0% 4.3% Future increase in salarie s +/-0.50% 2.6% -2.5% +/-0.50% 4.3% -4.0% increase/ increase/ Voluntary withd rawal rate decrease by 0.4% -0.3% decrease by 0.5% -0.5% 50% 50%
The aforementioned sensitivity analysis is based on changing each assumption, while holding the other assumptions
constant. Nevertheless, in an economic environment, assumptions typically do not change in isolation and are often
influenced simultaneously. The method adopted for the sensitivity analysis is the one used for the determination of the
defined benefit obligation in the Statement of Financial Position. The ultimate cost of defined benefit plans depends on the
actual future experience relating to the actual pay increases, as well as other factors that affect the cost, such as employee
mobility and recruitment.
Defined contribution plans
Total contributions to social security funds, state run plans and defined contribution plans for 2023 for the Group and the
Company amounted to € 60 million and nil, respectively (2022: € 63 million for the Group and nil for the Company).
Below is a summary of the defined contribution plans of the Group:
1. Piraeus Financial Holdings S.A. and domestic subsidiaries pension and state health plan
The Company’s main post retirement and health plan is a defined contribution plan that is run by the Greek State sponsored
social security fund EFKA. Contribution by the employer and employee to the Greek state is defined by law and amounts to
22.29% and 13.87% respectively, of the employees’ salaries with a cap. The state health plan offers health benefits to
employees before and after their retirement, and to insured family members.
2. Piraeus Bank state pension plan
The Bank’s main post retirement pension plan is a defined contribution plan that is run by the Greek state sponsored social
security fund EFKA. Contribution by the employer and employee to the State post retirement pension plan is defined in the
law and amounts to 17.74% and 11.32% respectively, of the employees’ salaries with a cap.
3. Piraeus Bank state health plan
Defined contribution to the state health plan amounts to 4.55% of the employees’ salary for the employer and 2.55%
contribution of employees’ salary. Additional contributions are paid for insured members of the employees’ families (such
as spouse that does not work and children) and are increased further in the event that the insured spouse is employed or
that members of the paternal family are also insured. Contribution of retired employees’ amount to a percentage of their
Piraeus Financial Holdings Group – 31 December 2023
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pension, while additional contributions are paid for other insured members of their families. The state health plan offers
health benefits to employees before and after retirement, and to insured family members.
4. Piraeus Bank S.A. and Piraeus Financial Holdings S.A. private pension plan
In November 2020 the Company established the Institution for Occupational Retirement, Life and Μedical Provision
(“IORP”), a non-profit legal entity under private law jurisdiction, which aims to provide supplementary insurance
protection to its members, beyond the primary coverage provided by social security funds.
With the establishment of IORP, a single fund has been created to provide all employees (the Compan y’s, the Bank’s and
the Greek subsidiaries’ mentioned in paragraph 7 below) with a supplementary lump sum, thereby enhancing their
retirement benefits. Employee participation in the IORP is voluntary and their contribution is optional, ranging from zero
to 20% of gross monthly salary. The Bank and the Company, in their capacity as employers, contribute 2% of the monthly
gross salary for 14 months annually to the individual employee’s account. This contribution is effective from the date of
registration in the IORP and there is no obligation for the employee to make a separate contribution. Moreover, the Bank
and the Company maintain a defined contribution insurance plan to disburse a specified amount at the end of the
employment relationship. This applies to certain members of Management in all cases except those involving fraud.
5. Group child savings private defined contribution plans
The Bank and the Company offer three (3) defined-contribution plans to their employees with regard to their children, all
of which share the same terms and requirements.
The cumulative amount collected throughout the insurance period (i.e. employee and employer contributions plus accrued
interest) is disbursed as a lump sum. The payment is directed either to the child, subject to specific conditions (such as
marriage, employment, reaching the age of 25, or to the event of the death of the employee-parent), or to the employee-
parent in cases such as retirement, participation in VES, permanent or total disability, and the death of the insured child. If
an employee resigns, they receive their contributions including interest.
6. Piraeus Bank S.A. and Piraeus Financial Holdings S.A. private insurance health plan
Furthermore, the Bank and the Company provide a Life and Health Care Insurance Plan to their employees and their families
(spouse and children with specific age limits respectively), through IORP. This plan includes employee life insurance,
reimbursement for employee permanent and total disability due to accident or sever illness, as well as coverage for
employee and/or dependent hospital care, outpatient care, surgery / hospitalisation allowance, maternity allowance and
check-up. The Bank and the Company pay fixed monthly premiums to the insurance company for the well-being of the
employee and their relatives. A percentage of the salary is allocated for life and disability insurance benefits. If a spouse or
child, not covered by social health insurance under the employee, is insured in the plan, the insurance covers hospital and
outpatient care benefits. The employee pays a fixed monthly amount per insured person, deducted from their monthly
salary.
7. Defined Contribution Pension Plans of Greek subsidiaries
Piraeus Asset Management Single Member M.F.M.C. S.A., Piraeus Leasing Single Member S.A., Piraeus Factoring Single
Member S.A., Piraeus Securities S.A., Iolcus Investments Alternative Investments Funds Managers S.A. and Piraeus Agency
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Solutions Single Member S.A. provide their employees with the opportunity to enroll in the Group’s IORP. Participation in
the IORP is voluntary for employees, and their contribution is optional, ranging from zero to 20% of gross monthly salary.
The employer’s contribution is fixed to 2% of the monthly gross salary for 14 months on an annual basis.
MIG Holdings S.A. offers a group pension plan to its employees. The contribution from participating employees is voluntary,
ranging from zero to 15% of gross monthly salary. The company, in its capacity as employer, contributes an additional 2%
of the gross monthly salary for 14 months annually to the individual accounts of the employees. Both the company and the
employees have the right to make supplementary contributions once per year.
Furthermore, Piraeus Agency Solutions Single Member S.A. provides employees with a defined contribution plan, subject
to the same terms and conditions. Employee participation in this plan is optional.
8. Defined contribution pension plans of foreign branches and subsidiaries
For two (2) Cypriot subsidiaries, Philoktimatiki Public Ltd and Philoktimatiki Ergoliptiki Ltd, contributions to the state social
insurance fund are made by both the employer and employees, calculated based on the employees’ salaries. Additionally,
these subsidiaries maintain a defined contribution plan, with the plan’s assets held in a separate fund managed by a
Committee. The plan is funded from contributions made by both the employer and employees.
In the case of Piraeus Group Finance PLC, a UK subsidiary, contributions to the state social security fund are made by both
the employer and employees, calculated on the basis of the employees’ salaries. Moreover, as required under UK law, the
subsidiary maintains a defined contribution plan through a private insurance company, “Scottish Widows”. This plan is
funded by mandatory contributions from the employer, determined as a percentage of the monthly salary, and voluntary
contributions from the employees. The employees decide on the individual funds for investment, and each employee’s
funds are held separately within the plan.
9. Child savings private defined contribution plans of Greek subsidiaries
Piraeus Agency Solutions Single Member S.A. and Snappi S.A. offer defined-contribution plans to the children of their
employees, with identical terms and requirements.
The total amount accumulated during the insurance period, comprising both employee and employer contributions, along
with accrued interest, is disbursed as a lump sum. The benefit is directed either to the child, subject to specific conditions
being met (such as the child’s marriage, employment, reaching the age of 25, or the death of the employee-parent), or to
the employee-parent in instances such retirement, resignation, participation in VES, permanent or total disability and death
of the insured child.
10. Private Health plans of Greek subsidiaries
Snappi S.A., Piraeus Leasing Single Member S.A., Piraeus Real Estate Single Member S.A., Piraeus Agency Solutions Single
Member S.A., Piraeus Factoring Single Member S.A., Piraeus Securities S.A., Piraeus Asset Management Single Member
M.F.M.C. S.A., Piraeus Capital Management S.A., Piraeus Jeremy Technology Catalyst Management Single Member S.A.,
MIG Holdings S.A. and Piraeus Bank Group Cultural Foundation, offer group health plans to their employees. These plans
include employee life insurance, reimbursement for permanent and total disability due to accident or severe illness, as well
Piraeus Financial Holdings Group – 31 December 2023
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as coverage for employee and/or dependent’s hospital care, outpatient care, surgery/hospitalisation allowance, and
maternity allowance. The subsidiaries pay monthly or annual premiums to the insurance companies for these health plans.
In the case of Piraeus Real Estate Single Member S.A., employees contribute by paying monthly premiums per insured
person, and these premiums are deducted from their monthly salary. For Piraeus Capital Management S.A., Snappi S.A. and
Piraeus Jeremy Technology Catalyst Management Single Member S.A, if a spouse or child is insured in the plan and is not
covered under the employee’s social health insurance, the employee is responsible for paying a fixed monthly amount per
insured person. This amount is deducted from the employee’s monthly salary.
11. Private Health Plans of foreign branches and subsidiaries
JSC Robne Kuce Beograd (RKB) provides its employees with an annual check-up, not offered through a contract with an
insurance company. Moreover, there is a life insurance contract in force, along with coverage in case of severe illness or
accident.
JSC Piraeus Bank ICB and Solum LLC in Ukraine offer group health plans for hospital and outpatient care to their employees.
Premiums for these plans are paid per quarter.
Piraeus Leasing Romania S.A. provides employees with a check-up on an annual basis or more frequently under specific
circumstances (e.g. long-term leave of an employee due to illness). This benefit is not provided through an insurance
contract.
Philoktimatiki Public Ltd and Philoktimatiki Ergoliptiki Ltd in Cyprus offer to their employees a group health plan, including
employee life insurance and reimbursement in case of permanent and total disability due to accident or severe illness.
Premiums are paid monthly by the subsidiaries.
Piraeus Group Finance PLC, in the United Kingdom, offers its employees private health insurance covering hospital and
outpatient care. Premiums for this insurance are paid annually, and the coverage extends to spouses and children under
25. Additionally the compa ny provides employees with insurance covering income protection in various circumstances,
including permanent and total disability due to accident or severe illness. Life insurance, based on the employee’s annual
salary, is offered with premiums paid annua lly. The company also provides complimentary travel insurance and annual
health check-ups at a private clinic.
40 Leases
The table below presents the contractual undiscounted cash flows of the gross lease liabilities. The Group and the Company
have elected to take a recognition exemption for short-term leases; hence, the analysis below does not include any leases
with a term lower than 12 months.
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Group Company 31/12/2023 31/12/2022 31/12/2023 31/12/2022 Up to 1 year 28 24 - - From 1 to 5 years 61 64 - - More than 5 years 11 29 - - Total undiscounted gros s liabiliti es 100 117 - -
As at 31 December 2023, the present value of lease liabilities amounts to € 91 million for the Group (31 December 2022: €
104 million) and nil for the Company.
Lease liabilities are included in line item “Other liabilities”.
a. Lease liabilities
Group Company Amounts recognized in profit or loss 31/12/2023 31/12/2022 31/12/2023 31/12/2022 Interest on lease l iabilities 2 2 - - Depreciation ch arge for the year 20 18 - - Expenses relating to sho rt-term leases 12 14 - -
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b. Lease receivables
Group Company Gross investments in finance leases 31/12/2023 31/12/2022 31/12/2023 31/12/2022 Up to 1 year 193 231 - - From 1 to 5 years 483 436 - - More than 5 years 446 435 - - Total undiscounted l ease payments receivable 1,121 1,102 - - Less: Unearned finance i ncome 298 211 - - Net investment in the lease 823 891 - -
Group Company Future income from operating leases 31/12/2023 31/12/2022 31/12/2023 31/12/2022 Up to 1 year 31 40 - - From 1 to 5 years 88 159 - - More than 5 years 13 24 - - Total undiscounted l ease payments receivable 132 223 - -
41 Contingent liabilities, assets pledged, transfers of financial assets and commitments
41.1 Legal proceedings
Litigation is a common occurrence in the Banking industry due to the nature of the business undertaken. The Group has
formal controls and policies for managing legal claims. Once professional advice has been obtained and the amount of loss
reasonably estimated, the Group makes adjustments to account for any adverse effects that the claims may have on its
financial position.
As at 31 December 2023, the Group and the Company provided for cases under litigation an amount of € 34 million and nil,
respectively (31 December 2022: € 26 million and nil for the Group and the Company, respectively) which represents
Management’s best estimate on the probable lo ss to be incurred upon finalization of these pending legal cases.
The Group has been advised by its legal advisors that it is possible, but not probable, that the final decision of certain legal
cases referring mainly to unjust enrichment damages, nullity of debt contract, labor disputes, moral damage and
compensation claims, may not be in favor of the Group. Accordingly, no litigation provision for such claims has been
established as at 31 December 2023. The contingent liability that could potentially result from such litigations, based on
the current status of the legal proceedings and Management’s best estimate, is not expected to exceed € 223 million for
the Group and nil for the Company (31 December 2022: € 231 million and nil for the Group and the Company, respectively),
while the timing of the outflow is uncertain. It is noted that based on historical data, this category of legal cases has resulted
in non-significant losses for the Group.
Following the acquisition of a controlling stake in MIG that was completed in April 2023, Management assisted by its legal
advisors, reviewed the possible and present obligations under IAS 37 arising from past litigations and claims against MIG
and its subsidiaries and concluded on the basis of the information and input provided by MIG, that no provision should be
Piraeus Financial Holdings Group – 31 December 2023
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recognised by the Group on its balance sheet. Further, no significant financial impact is expected from the contingent
liabilities of MIG and its subsidiaries as per the above stated information and input.
41.2 Pending tax audits
The Company has been audited by the tax authorities up to and including the year 2010.
For the years 2011 - 2016, all Greek Societe Anonyme Companies were required to receive tax compliance reports issued
by their statutory auditors, under Greek Law 2190/1920 and in accordance with article 82 of Greek Law 2238/1994 and
article 65A of Greek Law 4174/2013, as in force at that time.
From 2016 onwards, the requirement to obtain a tax compliance report became optional, however Management has opted
for the Company and the Group's Greek subsidiaries to continue receiving such reports from the statutory auditors. The
Tax Administration retains its right to proceed with a tax audit, within the applicable statute of limitations, in accordance
with article 36 of Greek Law 4174/2013, as currently in force.
In the Bank’s tax compliance report for fiscal year 2013, an emphasis of matter was expressed on applicable provisions of
Greek Tax Law regarding the acquisition of assets and liabilities of Greek branches of credit institutions domiciled in other
EU member countries, according to which the above-mentioned transactions are not subject to tax.
In r egards to the Group’s Greek subsidiaries, the respective tax compliance reports for the fiscal years up to 2022 have been
issued and they were unqualified.
Fiscal year 2023 of the Company and its Greek subsidiaries is currently being examined by Deloitte Certified Public
Accountants S.A. and the final outcome of the tax compliance reports is not expected to have a material effect on the
Annual Financial Statements.
The unaudited tax years of the Group's subsidiaries, associates and joint ventures, are included in Note 25 and therefore
their tax liabilities for these years may not be considered as final.
Additional taxes and penalties may be imposed for the unaudited tax years, however, no material impact is expected on
the financial position of the Group.
41.3 Commitments
In the normal course of business, the Group enters into contractual credit commitments towards their customers to
facilitate their financing needs or obligations. Due to their nature, credit commitments are treated as off-balance sheet
items. These credit commitments consist of letters of guarantees, letters of credit and irrevocable undrawn committed
credit facilities. Typically, letters of guarantee and letters of credit ensure payment to a third party for a customer's trade
transactions or guarantee the performance of a customer to a third party. Irrevocable undrawn committed credit facilities
are agreements to lend to a customer as long as there is no violation of the conditions established in the contract. The
credit risk associated with these commitments is measured by applying the same Credit Policy, approval process and
monitoring procedures employed for Loans and advances to customers at amortised cost.
As at 31 December 2023 and 2022 the Group had undertaken the following commitments:
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Group 31/12/2023 31/12/2022 Financial guarante es 5,680 4,789 Letters of credit 121 114 Irrevocable und rawn credit commitments 1,961 1,624 Total credit commitments 7,762 6,527 Other commitments - 110 Total commitments 7,762 6,637
As of 31 December 2023 and 2022 the Company had not undertaken any commitments.
The irrevocable undrawn committed credit facilities are included in the Risk Weighted Assets calculation for capital
adequacy purposes under regulatory rules currently in force. An ECL allowance is measured for letters of guarantee, letters
of credit and irrevocable undrawn credit commitments.
Group Financial guarantees - Internal rating grade ECL 31/12/2023 Stage 1 Stage 2 Stage 3 POCI Total Balance Allowance Strong 4,737 - - - 4,737 4 4,733 Recommended 583 - - - 583 2 581 Substandard - 187 - - 187 1 186 Default - - 172 - 172 69 103 Total 5,320 187 172 - 5,680 76 5,604
Group Financial guarantees - Internal rating grade ECL 31/12/2022 Stage 1 Stage 2 Stage 3 POCI Total Balance Allowance Strong 4,233 - - - 4,233 6 4,228 Recommended 317 - - - 317 1 316 Substandard - 37 - - 37 1 37 Default - - 202 - 202 80 122 Total 4,550 37 202 - 4,789 87 4,702
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Group Financial guarantees - Movement in nominal amount 31/12/2023 Stage 1 Stage 2 Stage 3 POCI Total Gross carrying amount as at 1/1/2023 4,550 37 202 - 4,789 New off balance shee t items originated or pu r chased 2,800 40 25 - 2,866 Off balance sheet items rep aid / matured (1,873) (51) (50) - (1,975) Off balance sheet items de r ecogni zed (excluding write o ffs) - - - - (1) Transferred from Stage 1 to Stage 2 (196) 196 - - - Transferred from Stage 1 to Stage 3 (1) - 1 - - Transferred from Stage 2 to Stage 1 41 (41) - - - Transferred from Stage 2 to Stage 3 - - - - - Transferred from Stage 3 to Stage 2 - 6 (6) - - Gross carrying amount as at 31/12/2023 5,320 187 172 - 5,680
Group Financial guarantees - Movement in nominal amount 31/12/2022 Stage 1 Stage 2 Stage 3 POCI Total Gross carrying amount as at 1/1/2022 3,444 96 224 - 3,764 New off balance shee t items originated or pu r chased 2,841 24 35 - 2,900 Off balance sheet items rep aid / matured (1,744) (81) (49) - (1,874) Off balance sheet items de r ecogni zed (excluding write o ffs) (1) - - - (1) Transferred from Stage 1 to Stage 2 (103) 103 - - - Transferred from Stage 1 to Stage 3 (3) - 3 - - Transferred from Stage 2 to Stage 1 116 (116) - - - Transferred from Stage 2 to Stage 3 - (3) 3 - - Transferred from Stage 3 to Stage 2 - 14 (14) - - Gross carrying amount as at 31/12/2022 4,550 37 202 - 4,789
Group Financial guarantees - Movement in ECL allowance 31/12/2023 Stage 1 Stage 2 Stage 3 POCI Total ECL allowance as at 1/1/2023 6 1 80 - 87 Transferred from Stage 1 to Stage 2 - - - - - Transferred from Stage 2 to Stage 1 - - - - Transferred from Stage 3 to Stage 2 - - - - - ECL Impairment charge/ (release) for the ye ar (P&L) - - (10) - (11) ECL allowance as at 31/12/2023 6 1 69 - 76
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Group Financial guarantees - Movement in ECL allowance 31/12/2022 Stage 1 Stage 2 Stage 3 POCI Total ECL allowance as at 1/1/2022 12 1 77 - 90 Transferred from Stage 2 to Stage 1 1 (1) - - Transferred from Stage 3 to Stage 2 - 4 (4) - - ECL Impairment charge/ (release) for the ye ar (P&L) (6) (5) 7 - (4) ECL allowance as at 31/12/2022 6 1 80 - 87
Group Letter of credit - Internal rating grade ECL 31/12/2023 Stage 1 Stage 2 Stage 3 POCI Total Balance Allowance Strong 71 - - - 71 - 71 Recommended 50 - - - 50 1 50 Total 121 - - - 121 1 120
Group Letter of credit - Internal rating grade ECL 31/12/2022 Stage 1 Stage 2 Stage 3 POCI Total Balance Allowance Strong 112 - - - 112 1 112 Recommended 2 - - - 2 - 2 Total 114 - - - 114 1 113
Group Letters of credit - Movement in nominal amount 31/12/2023 Stage 1 Stage 2 Stage 3 POCI Total Gross carrying amount as at 1/1/2023 114 - - - 114 New off balance shee t items originated or pu r chased 140 - - - 140 Off balance sheet items rep aid/ matured (131) (1) - - (132) Transferred from Stage 1 to Stage 2 (1) 1 - - - Gross carrying amount as at 31/12/2023 121 - - - 121
Group Letters of credit - Movement in nominal amount 31/12/2022 Stage 1 Stage 2 Stage 3 POCI Total Gross carrying amount as at 1/1/2022 41 1 1 - 42 New off balance shee t items originated or pu r chased 228 - - - 228 Off balance sheet items rep aid/ matured (155) (1) (1) - (156) Gross carrying amount as at 31/12/2022 114 - - - 114
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Group Irrevocable Undrawn Credit Commitments - Internal rating grade ECL 31/12/2023 Stage 1 Stage 2 Stage 3 POCI Total Balance Allowance Strong 1,827 - - - 1,827 3 1,824 Recommended 93 - - - 93 - 93 Substandard - 34 - 6 40 2 39 Total 1,920 34 - 6 1,961 5 1,956
Group Irrevocable Undrawn Credit Commitments - Internal rating grade ECL 31/12/2022 Stage 1 Stage 2 Stage 3 POCI Total Balance Allowance Strong 1,430 - - - 1,430 2 1,428 Recommended 106 - - - 106 1 105 Substandard - 78 - 6 85 2 83 Default - - 3 - 3 - 3 Total 1,536 78 3 6 1,624 5 1,619
Irrevocable Undrawn Credit Commitments - Movement in ECL Group allowances 31/12/2023 Stage 1 Stage 2 Stage 3 POCI Total ECL allowance as at 1/1/2023 4 2 (1) - 5 Transferred from Stage 2 to Stage 1 2 (2) - - - ECL Impairment charge/ (release) for the ye ar (P&L) (1) 1 - - - ECL allowance as at 31/12/2023 4 2 (1) - 5
Irrevocable Undrawn Credit Commitments - Movement in ECL Group allowances 31/12/2022 Stage 1 Stage 2 Stage 3 POCI Total ECL allowance as at 1/1/2022 8 4 - - 12 Transferred from Stage 1 to Stage 2 (1) 1 - - - Transferred from Stage 2 to Stage 1 5 (5) - - - ECL Impairment charge/ (release) for the ye ar (P&L) (8) 2 (1) - (7) ECL allowance as at 31/12/2022 4 2 (1) - 5
Piraeus Financial Holdings Group – 31 December 2023
382
41.4 Assets pledged
Group 31/12/2023 31/12/2022 Due from banks (as reclassifie d) 825 1,084 Financial assets at FVTPL 1 55 Loans and advance s to customers measured at amortised co s t 6,498 7,055 Financial assets at FVΤOCI 2 - Debt securities measured at amortised co st 3 41 7,330 8,236
The aforementioned financial assets are mainly pledged either for drawing liquidity from the Eurosystem, under the general
terms applying to such agreements, or for margins in regards with a) derivative transactions engaged under ISDA master
netting agreements and CSA contracts and b) repurchase transactions covered by GMRA contracts.
In the context of interbank repurchase agreement (repo) transactions, securities with a total nominal value of € 515 million
(31 December 2022: € 389 million) are used for liquidity purposes. The said amount includes GGBs of total nominal value €
71 million (31 December 2022: € 162 million).
In addition to the above, as at 31 December 2023 and 2022 the Bank had pledged an amount of € 168 million, with respect
to written guarantee for the non-payment risk of the Greek State, included within balance sheet line item “Due from banks”.
The Bank’s minimum reserve requirement, concerning the average funds held in its current accounts with BoG over the
current maintenance period, stands at € 5 85 million.
There are no pledged assets for the Company.
Piraeus Financial Holdings Group – 31 December 2023
383
42 Share capital and share premium
Number of shares Company Group Net number Issued shares Treasury shares of shares 1,249,110,56 Opening balance at 1/1/2022 1,250,367,223 (1,256,654) 9 Purchases of treasury shares - (20,275,861) (20,275,861) Sales of treasury shares - 21,272,717 21,272,717 1,250,107,42 Balance at 31/12/2022 1,250,367,223 (259,798) 5 1,250,107,42 Opening balance at 1/1/2023 1,250,367,223 (259,798) 5 Purchases of treasury shares - (32,141,238) (32,141,238) Sales of treasury shares - 27,156,011 27,156,011 1,245,122,19 Balance at 31/12/2023 1,250,367,223 (5,245,025) 8
The Company’s share capital as at 31 December 2023 and 2022 amounted to € 1,163 million, divided into 1,250,367,223
common registered shares, with a nominal value of € 0.93 each.
On 27 June 2023, the AGM approved a share buyback programme for the acquisition of up to 20,000,000 own common
shares of the Company in a price range between € 0.75 (minimum price) to € 5.00 (maximum price) per share, provided
that at the time of acquisition, the conditions set out in the legislative and regulatory framework are met. As at 30
September 2023 after having first obtained the required regulatory approvals, the Company acquired 5,283,004 treasury
shares with a total cost of € 15 million.
On 1 December 2023, the Company distributed 1,307,585 of its own common shares for free under the Free Distribution
of Shares. These shares, valued at € 4 million, were provided to 137 beneficiaries through OTC transactions as part of the
Group’s variable remuneration schemes. The valuation was based on the share’s closing price of € 3.226 on 1 December
2023. Refer to Note 12.
After the aforementioned transactions, the Company owned a total of 3,975,419 of its own shares, corresponding to a
percentage of 0.32% of its total shares.
Apart from the above, the remaining purchases and sales of treasury shares that occurred during the current year and in
2022, as well as the treasury shares owned as at 31 December 2023 and 2022, relate to transactions executed by the
Group’s subsidiary Pi raeus Securities S.A. in the context of its market making operations. As at 31 December 2023, Piraeus
Securities S.A. held 1,269,606 of the Group’s common shares.
The AGM also approved the offsetting of an amount of € 301 million in the Company’s “share premium” account by writing-
off an equivalent amount of accumulated losses carried forward, for which the required regulatory approval was provided
on 21 July 2023.
Piraeus Financial Holdings Group – 31 December 2023
384
43 Other reserves and retained earnings
Group Company 31/12/2023 31/12/2022 31/12/2023 31/12/2022 Legal reserve 88 85 69 69 Reserve from financial assets measured at FVTOCI 40 38 - - Currency translation reserve (64) (63) - - Cash flow hedge reserve 2 - - - Property revaluation reserve 9 7 - - Other reserves 40 33 27 27 Non-taxed reserves 411 351 351 351 Total other reserves 525 451 447 447 Retained earnings 1,771 784 50 (301) Other reserves and retained earni ngs 2,296 1,235 497 147
The table below illustrates the movement of the reserve from financial assets measured at FVTOCI. The movement of other
reserves and retained earnings is provided in the Statement of Changes in Equity.
Group 31/12/2023 31/12/2022 Opening balance 38 144 Gains / (losses) from the valuatio n of debt securitie s 33 (50) Gains from the valuation of equity securities 4 31 ECL on debt securitie s - (13) Recycling o f valuation adjustments and accumul ated impairments upon di s posal (36) (110) Deferred taxation - 36 Closing balance 40 38
44 Dividend per share
The Company and the Group have adopted and follow a discretionary distribution policy, wherein the BoD assesses various
factors, including the Company's and the Group’s financial performance, liquidity position, capital position and future
capital requirements, and Group’s Business Plan in order to determine the type and amount of dividends to be d istributed.
For the year ended 31 December 2023, as the provisions of article 159 of the Greek Law 4548/2018 (Reform of the Law of
Sociétés Anonymes) are met, the Company’s BoD will recommend to the A GM the distribution of dividend up to the amount
of € 79 million in cash (or/and with other distribution forms e.g. treasury shares buy buck), subject to approval by the AGM
in 2024. The proposed dividend represents 10% of the Group’s profit attributable to the equity holders of the Company for
the year ended 31 December 2023. Moreover, the Company is required to obtain ECB’s approval prior to making any
dividend distribution to its shareholders.
Piraeus Financial Holdings Group – 31 December 2023
385
45 Cash and cash equivalents
For the Cash Flow Statement, “Cash and Cash Equivalents” comprise the following outstanding balances as at 31 December
2023 and 2022 with a maturity of three months or less from their initial recognition date.
Group Company 31/12/2023 31/12/2022 31/12/2023 31/12/2022 Cash and balances with Central Banks (excluding man datory reserves) 9,967 9,080 - - Due from banks 208 290 34 45 Financial assets at FVTPL 38 3 - - Financial assets at FVTOCI 29 28 - - 10,242 9,401 34 45
46 Related party disclosures
Related parties of the Group and the Company include:
a) Key Management Personnel”;
b) Close family members of Key Management Personnel;
c) Entities having transactions with the Company, that are controlled or jointly controlled by Key Management
Personnel and their close family members;
d) the Company΄s subsidiaries;
e) the Company΄s associates and their subsidiaries;
f) the Company΄s joint ventures and their subsidiaries; and
g) HFSF, which holds ordinary shares in the share capital of the Company and benefits from the special rights stated
in article 10 of Law 3864/2010, as amended and in force.
Loans and advances granted to related parties, as well as letters of guarantee issued in favor of related parties, were
executed in accordance with the Group’s approved credit policies and procedures in terms of interest rates, collaterals and
non-payment risk.
46.1 Key Management Personnel and other related parties
The tables below present the Group’s and Company’s transactions with Key Management Personnel and the related parties
referred to in points (b) and (c) above, including the HFSF. No transactions occurred with the HFSF during the years ended
31 December 2023 and 2022.
Piraeus Financial Holdings Group – 31 December 2023
386
Group 31/12/2023 31/12/2022 Key Management Other related Key Management Other related (amounts in thousand €) Personnel parties Personnel parties Loans and advance s to customers at amortised cost (Gross carrying amount) 3,981 414 3,394 407 Due to customers 2,800 1,176 4,587 2,018
Gro up 1/1 - 31/12/2023 1/1 - 31/12/2022 Key Management Other related Key management Other related (amounts in thousand €) Personnel parties personnel parties Income 115 58 58 36 Expense 36 3 104 -
The Company has no transactions with Key Management Personnel and other related parties during the years ended 31
December 2023 and 2022.
Group Company Key Management Personnel benefits (amounts in thousand €) 1/1 - 31/12/2023 1/1 - 31/12/2022 1/1 - 31/12/2023 1/1 - 31/12/2022 Short-term benefits 9,440 7,917 1,173 553 Contribution s to the Institution for Occupatio nal Retirement, Life and Medi cal Provisio n 100 83 13 3 Post-employment bene f its 118 92 6 4 Share based payments 1,171 - 57 -
Short-term benefits of Key Management Personnel include wages, salaries, employer’s share of social contributions and
other charges, while “Post-employment benefits” include the cost of post-employment benefit programs.
The total provision established for post-employment benefits to Key Management Personnel as at 31 December 2023 and
2022 amounted to € 1 million, and is recognised in line item “Retirement and termination benefit obligations” in the
Statement of Financial Position.
The ECL allowance on loans and advances to customers at amortised cost granted from the Group to Key Management
Personnel and other related parties as at 31 December 2023 and 2022 amounted to less than € 0.1 million.
As at 31 December 2023 Key Management Personnel and other related parties held 747 thousand ordinary shares of the
Company, compared to 247 thousand as at 31 December 2022 following the Free Distribution of Own Shares. Refer to Note
12.
46.2 Subsidiaries
The Company’s related party transactions with subsidiaries are presented below:
Piraeus Financial Holdings Group – 31 December 2023
387
(amounts in million €)
Company
31/12/2023
31/12/2022
Assets
Due from banks
34
45
Debt securities at amortised cost (Gross carrying amount)
855
819
Other assets
1
1
Total
890
865
Liabilities
Other liabilities
52
47
Total
52
47
(amounts in million €)
Company
1/1 - 31/12/2023
1/1 - 31/12/2022
Income
Interest and similar income
103
99
Fee and commission income
-
-
Dividend income
53
53
Net other income / (expenses)
(1)
(1)
Total
155
150
Expenses
Interest expense and similar charges
-
-
Fee and commission expense
(30)
(25)
Operating expenses
(1)
(1)
Total
(31)
(26)
The carrying amount of the Company’s debt securities measured at amortised cost, regarding the fully subscribed Back-to-
Back Tier 2 Notes issued by the Bank, amounted to € 848 million as at 31 December 2023 (31 December 2022: € 796 million).
This amount includes an ECL allowance of € 7 million (31 December 2022: € 23 million). During the current year there was
an ECL release of € 16 million (31 December 2022: release of € 6 million). Line item “Interest and similar income” refers to
interest income from the fully subscribed Back-to-Back Tier 2 notes.
Line item “Other Liabilities” as at 31 December 2023 and 2022 includes an amount of € 1 million, which relates to lease
liabilities of the Company’s subsidiaries.
Line item “Dividend income” refers to interest income from the internal AT 1 capital instrument issued by the Bank and
fully subscribed by the Company.
46.3 Associates
The Group’s and Company’s related party transactions with associates are presented below:
Piraeus Financial Holdings Group – 31 December 2023
388
Group (amounts in million €) 31/12/2023 31/12/2022 Loans and advance s to customers at amortised cost (Gross ca rrying amount) 46 433 Other assets 7 3 Due to customers 187 254 Other liabili t ies 6 16 Group (amounts in million €) 1/1 - 31/12/2023 1/1 - 31/12/2022 Total expense and capital expenditure (88) (106) Dividends, inte rest income and other income 35 48
As of 31 December 2023 the Company has no transactions with associates, while the Company’s transactions with
associates as of 31 December 2022 were immaterial.
The ECL allowance on loans and advances to customers at amortised cost granted from the Group and the Company to
their associates as at 31 December 2023 amounted to € 3 million and nil, respectively (31 December 2022: € 75 million for
the Group and nil for the Company). The ECL charge on loans and advances to customers at amortised cost for the year
ended 31 December 2023 amounted to € 7 million for the Group and nil for the Company (31 December 2022: € 46 million
for the Group and nil for the Company).
As at 31 December 2023, the letters of guarantee issued in favor of associates amounted to € 8 million for the Group and
nil for the Company (31 December 2022: € 14 million for the Group and nil for the Company).
Line item “Dividends, interest income and other income" includes dividend income received from associates amounting to
€ 18 million for the Group and nil for the Company, for the year 2023 (31 December 2022: € 5 million for the Group and nil
for the Company).
During the year ended 31 December 2023, the Group contributed to Strix Holdings LP and Strix Holdings II LP certain equity
investments and cash. The cash contributed amounted to a total amount of € 50 million and € 18 million, respectively, in
exchange for additional limited partnership interests. Refer also to Note 47.B.
As at 31 December 2023, the Group and the Company have not undertaken commitments to associates (31 December
2022: € 110 million for the Group and nil for the Company).
46.4 Joint ventures
The Group’s related party transactions with joint ventures are presented below:
Group (amounts in million €) 31/12/2023 31/12/2022 Loans and advance s to customers at amortised cost (Gross ca rrying amount) 55 54 Other assets - - Due to customers 6 -
Piraeus Financial Holdings Group – 31 December 2023
389
Group (amounts in million €) 1/1 - 31/12/2023 1/1 - 31/12/2022 Total income 1 1
As of 31 December 2023 and 2022, the Company has no transactions with joint ventures.
The ECL allowance on loans and advances to customers at amortised cost granted from the Group and the Company to
joint ventures as at 31 December 2023 amounted to € 40 million and nil, respectively (31 December 2022: € 40 million for
the Group and nil for the Company).
Letters of guarantee to joint ventures as at 31 December 2023 amounted to € 20 million (31 December 2022: nil).
47 Changes in the portfolio of consolidated companies
The changes in the Group’s subsidiaries, associates and joint ventures that occurred in the year ended 31 December 2023,
in excess of € 10 million, are set out below:
a) Changes in subsidiaries
In the first quarter of 2023, the Bank fully covered the share capital of its subsidiary, Novus Symmetoches Single Member
S.A. (“Novus”), through cash and contribution in kind, for a total amount of € 47 million. In the context of the rehabilitation
agreement of the Greek Sugar Industry, the said subsidiary acquired in the current reporting period a wholly owned
shareholding in companies Fabrika Secera Sajkaska Doo and Crvenka Fabrika Secera Doo for € 17 million and € 28 million,
respectively. Novus and the aforementioned equity participations were accounted for as subsidiaries under the full
consolidation method until September 2023, when the Group lost control over Novus, following its contribution to Strix
Holdings II LP, upon approval of the Serbian Commission for Protection of Competition.
Similarly, in November 2023, the Group lost control over its subsidiaries Aleva Single Member S.A., Arpis Single Member
S.A. and Achaia Clauss Estate S.A., following contribution of its participation in the aforementioned equity holdings to Strix
Holdings II LP. Concerning Achaia Clauss Estate S.A., there was a prior share capital increase, consisting mainly of the
capitalization of a loan from the Bank of € 70 million, which led to an increase in the Bank’s shareholding to 99.41%.
In December 2023, under the said rehabilitation agreement, the Bank established Sirrus Single Member S.A. and fully
covered its share capital through cash and contrib ution in kind, for a total amount of € 11 million.
During 2023, the Bank fully subscribed in the share capital increase of its subsidiaries Varna Asset Management EOOD (31
January 2023) and Bulfina E.A.D. (24 March 2023), through in-kind contribution for an amount of € 30 million and € 86
million, respectively. Both companies were accounted for as subsidiaries under the full consolidation method until June
2023, when the Group lost control over the entities, along with the subsidiaries of the Bulfina E.A.D. group, namely Asset
Management Bulgaria EOOD, Besticar Bulgaria EOOD, Besticar EOOD, Beta Asset Management EOOD, Bulfinace E.A.D.,
Delta Asset Management EOOD, Piraeus Nedvizhimi Imoti EOOD and Ekaterina Project EOOD, following their contribution
to Strix Holdings II LP.
Piraeus Financial Holdings Group – 31 December 2023
390
On 23 February 2023, Trastor Real Estate Investment Company's (“Trastor”) BoD resolved the issuance of a mandatorily
convertible bond, for a total amount of up to € 55 million. The bond will be subscribed in its entirety by the Bank. Up to the
reporting date, an amount of € 44 million had been issued. The bond meets the definition of an equity instrument u nder
IAS 32 and was classified as such in Trastor’s balance sheet. The Bank increased the cost of its investment in Trastor by an
equal amount. The said issuance has no effect at Group level.
On 15 December 2023, Trastor acquired a 100% shareholding in Kynouria Ktimatiki Single Member S.A. for a consideration
of € 20 million, which subsequently became a subsidiary of the Group.
Since 13 April 2023, MIG is accounted for as a subsidiary under the full consolidation method, hence, MIG’s subsidiaries,
namely ΜΙG Leisure Ltd, MIG Real Estate (Serbia) B.V., JSC Robne Kuce Beograd (RKB), Athenian Investments S.A. Holdings,
ΜΙG Aviation Holdings Ltd, Tower Technology Holdings (Overseas) Ltd and MIG Media Advertising Services S.A. also became
subsidiaries of the Bank. With regards to the changes in the Bank’s shareholding in MIG that occurred throughout the
reporting period, please refer to Note 25A for a detailed recount.
Additionally, within 2023, JSC Robne Kuce Beograd (“RKB”) capitalized part of its debt liability due to its parent company,
MIG, of € 150 million.
The Company covered an amount of € 11 million in the share capital increase of its subsidiary Snappi S.A., totaling € 13
million, thus increasing its shareholding to 69.27%.
b) Changes in associates and joint ventures
In June 2023, the Bank lost its significant influence on associate APE Fixed Assets Real Estate Tourist and Development S.A.,
following the participation’s contribution to Strix Holdings II LP. Additionally during June 2023, Intrum Hellas Credit Servicing
S.A. executed a share capital decrease of € 155 million, of which an amount of € 31 million was distributed to the Bank.
Following the said capital return, the Bank decreased its cost of investment in Intrum Hellas Credit Servicing S.A. by an equal
amount.
As a result of the merger through absorption of the Bank’s associate ANEK Lines S.A. by Attica Holdings S.A., the latter
issued new ordinary shares, which began trading in the Athens Stock Exchange on 8 December 2023. The Bank’s
participation in Attica Holdings S.A. is classified in the portfolio measured at FVTOCI.
In December 2023, the Bank derecognised its equity investment in IDEAL Holdings, which was measured at FVTOCI and
carried at € 15 million, as it was contributed to Strix Holdings LP. Refer to Note 24 for further details.
c) Liquidations, disposals and merges
Refer to the following table for the Group’s liquidations, disposals, and merges during the year ended 31 December 2023:
Piraeus Financial Holdings Group – 31 December 2023
391
Entity Group Participation Event Exodus S.A. Associate Liquidation (initiated) Praxis I Finance PLC (SPV) Subsidiary Dissolution Tower Technolog y H oldings (Overseas) Ltd Subsidiary Liquidation (completed) Geniki Single Me mber S.A. Financial & Con sulting Services Subsidiary Liquidation (completed) Piraeus Electronic Loan Documentation Sing le Member S.A. Subsidiary Disposal Neoris Single Member S.A. Subsidiary Disposal MIG Real Estate (Serbia) B.V. Subsidiary Liquidation (completed) Sunshine Leases Sing le Member S.A. Subsidiary Disposal Tirana Leasing Sh.A Subsidiary Liquidation (completed) Piraeus Direct Solution s Single Member S.A Subsidiary Disposal Thesis Agra Single Member S.A. Subsidiary Liquidation (initiated) Thesis Hermes Single Membe r S.A. Subsidiary Liquidation (initiated) Thesis Schisto Single Membe r S.A. Subsidiary Liquidation (initiated) Thesis Stone Single Me mber S.A. Subsidiary Liquidation (initiated) Additionally, during the year ended 31 December 2023, Piraeus Nedvizhimi Imoti EOOD, 100% s ubsidiary of the Group,
disposed of its total participation in its subsidiaries, namely Emerald Investments EOOD and Botstile EOOD, while Trastor
absorbed its wholly owned subsidiary company, Pileas Real Estate - Commercial S.A.
48 Independent Auditors’ fees
On 27 June 2023, the Ordinary GM of the Shareholders appointed Deloitte Certified Public Accountant S.A. as the principal
independent public accountant for the year ended 31 December 2023. The following table presents the aggregated fees
for professional statutory audit fees, tax compliance report fees, other audit related fees and other non-audit related fees
for the years 2023 and 2022, by the Group’s principal accounting firm Deloitte (a member firm of the Deloitte Network),
other member firms of the Deloitte Network and their respecti ve affiliates (collectively, “Deloitte”).
Group Company (amounts in thousand €) 31/12/2023 31/12/2022 31/12/2023 31/12/2022 Statutory audit fees 2,358 2,482 210 205 Other audit related fees (Including tax compliance rep orts fees) 868 1,071 366 505 Other non-audit rel ated fees 174 272 56 91 Total 3,400 3,825 632 801
49 Reclassification of comparatives
The reclassifications reflected in the Statement of Financial Position and Statement of Changes in Equity are presented
Piraeus Financial Holdings Group – 31 December 2023
392
below.
Statement of Financial Position
During the current period, the Group amended the presentation of derivative financial instruments and their corresponding
accruals in the Statement of Financial Position. Previously, the Bank did not offset derivative assets and liabilities entered
into with a central counterparty clearing member against the margin collateral posted or received. However, in the context
of the Annual Financial Statements and in line with industry practice, the Group revisited its judgment relating to the
enforceability of the respective clearing agreements and concluded that the IAS 32 offsetting criteria were met.
Additionally, the Group used to present the carrying amount of derivatives net of accrued interest, which was previously
included within the “other assets” and “other liabilities” line items. In the current period the Group presents the carrying
amount of derivatives on a gross basis, with accrued interest receivable and payable netted off at deal level and classified
within derivative assets or derivative liabilities based on the classification of each derivative. As at 31 December 2023 and
2022 the Company did not hold any ISDA contracts or similar master netting agreements.
Further, the Group and the Company changed the presentation of financial assets measured at FVTOCI and debt securities
at amortised cost by combining them now into a single line item “Investment securities”.
Consequently, the Group’s and the Company’s Statement of Financial Position as of 31 December 2022 was reclassified as
follows, in order to conform to current year presentation.
Piraeus Financial Holdings Group – 31 December 2023
393
Group € Million 31/12/2022 Reclassifications Derivatives and Accrued Invesment As published margin collateral interest of As reclassified securities offsetting derivatives ASSETS Due from ban ks 750 665 1,415 Derivativ e financial instruments 1,830 (1,651) 41 220 Investment se curities - 11,741 11,741 Financial asset s measured at FVT OC I 897 (897) - Debt securiti es at amortised cost 10,844 (10,844) - Other asset s 3,427 (70) 3,357 TOTAL ASSETS 75,661 (986) (29) - 74,645 LIABILITIES Due to banks 6,922 (737) - 6,185 Derivativ e financial instruments 656 (249) 4 - 410 Other liabi lities 1,147 (33) - 1,113 TOTAL LIAB ILITIES 69,080 (986) (29) - 68,064 TOTAL EQUITY 6,581 - - 6,581 TOTAL LIAB ILITIES A N D EQUITY 75,661 (986) (29) - 74,645
€ Million
Company
31/12/2022
Reclassifications
As published
Investment
securities
As reclassified
ASSETS
Investment securities
-
798
798
Financial assets measured at FVTOCI
2
(2)
-
Debt securities at amortised cost
796
(796)
-
TOTAL ASSETS
798
-
798
Statement of Changes in Equity
Group Non- taxed Retained Non- taxed Retained Non- taxed Retained € Million Total Total Total reserves earnings reserves earnings reserves earnings As publish ed Reclassificat ions As reclassif i ed Opening balance as at 1/1/2022 351 (14,669) 5,787 37 (37) - 388 (14,706) 5,787 Balance as at 31/12/2022 351 784 6,5 53 37 (37) - 388 747 6,5 53
The Bank changed the presentation of certain types of reserves, after taking into account their nature and purpose in
accordance with the applicable legal and tax framework in Greece. In particular, reserves of € 37 million, which were formed
prior to 2022, and relate mainly to dividends and gains from the sale of participations, formerly classified under retained
earnings, are now presented as “Non-taxed reserves”. Comparative information has been reclassified to ensure consistency
Piraeus Financial Holdings Group – 31 December 2023
394
with the aforementioned changes in presentation of non- taxed reserves and retained earnings. The Company did not have
any corresponding reclassifications for the year 2022.
50 Disclosures of Greek Law 4261/5.5.2014
According to article 81 of Greek Law 4261/2014, which incorporates into the Greek legislation article 89 of EU Directive
2013/36/EU of the European Parliament and of the Council of 26 June 2013, according to which, it is adopted for the first
time the obligation for the Group to disclose information, on a consolidated basis, for each country in which it operates.
Disclosed information includes: name of the subsidiary, nature of business, geographical location, turnover, number of
employees on a FTE basis, profit or loss before tax, tax on profit or loss and public subsidies. Turnover, profit or loss before
tax, as well as tax on profit or loss are prepared on the same basis as the relevant figures reported in the financial statements
for the years ended 31 December 2023 and 2022, which are prepared in accordance with IFRS as issued by the IASB and
endorsed by the EU.
Neither the Company nor the Group’s subsidiaries have received any public subsidies during the year ended 31 December
2023. Information presented above is analyzed in the following tables:
A) Country specific information
31/12/2023 Income tax Country Total net Profit / (loss) benefit / Number of staff income⁽³⁾ before tax (expense) Greece⁽¹⁾ 2,583 1,076 (288) 7,724 Romania (1) (3) - 4 Bulgaria (1) (2) - - Egypt - - - 1 Cyprus 1 - - 4 Serbia 11 6 (2) 45 Albania - - - 1 Ukraine 14 4 (2) 308 Other countries⁽²⁾ - (3) - - Group 2,607 1,078 (292) 8,087
(1)
The amounts reported include the operations of the Bank’s branches operating in foreign countries and SPVs incorporated in the U.K and Ireland.
(2)
Other countries include British Virgin Islands, Ireland and Netherlands.
(3)
Total net income includes net interest income, net fee and commission income, income from non-banking activities, dividend income, net gains/ (losses) from financial instruments
measured at FVTPL, net gains/ (losses) from financial instruments measured at FVTOCI, net gains/ (losses) from derecognition of financial instruments measured at amortised cost,
net gains/ (losses) from loss of control over subsidiaries/ disposal of associates and joint ventures and net other income/ (expenses).
Piraeus Financial Holdings Group – 31 December 2023
395
31/12/2022 Income tax Country Total net Profit/ (loss) benefit/ Number of staff income⁽³⁾ before tax (expense) Greece⁽¹⁾ 2,651 1,081 (139) 8,338 Romania - - - 4 Bulgaria 2 (5) - 8 Egypt - - - 1 Cyprus (2) (3) - 4 Serbia 2 3 - 5 Albania - - - 2 Ukraine 14 (3) - 293 Other countries⁽²⁾ (1) 15 - 3 Group⁽⁴⁾ 2,666 1,087 (139) 8,658
(1)
The amounts reported include the operations of the Bank’s branches operating in foreign countries and SPVs incorporated in the U.K and Ireland.
(2)
Other countries include U.K., British Virgin Islands and Ireland.
(3)
Total net income includes net interest income, net fee and commission income, income from non-banking activities, dividend income, net gains/ (losses) from financial instruments
measured at FVTPL, net gains/ (losses) from financial instruments measured at FVTOCI, net gains/ (losses) from derecognition of financial instruments measured at amortised cost,
net gains/ (losses) from loss of control over subsidiaries/ disposal of associates and joint ventures and net other income/ (expenses).
(4)
The amounts reported include both continuing and discontinued operations.
B) Group's subsidiaries based on the nature of their business and their geographical location
The Group's subsidiaries based on the nature of their business and their geographical location are presented in Note 25A.
Greek Law 4261/2014, article 82, which incorporated into Greek legislation the article 90 of Directive 2013/36/EU of the
European Parliament and of the Council on 26 June 2013, established the requirement to disclose the total return on assets
ratio. This ratio for the Company and the Group for the year ended 31 December 2023 amounted to 1.57% and 1.04%,
respectively (31 December 2022: 1.60% and 1.16%, respectively).
51 Disclosures of Greek Law 4151/2013
In accordance with the provisions of article 8 par. 3 of Greek Law 4151/2013, every credit institution operating in Greece
has the obligation to remit to the Greek State the outstanding cash balances, plus interest, for all dormant deposits, for
which a period of 20 years has passed until the end of April of each year. In this context, on 24 April 2023, the Bank remitted
to the Greek State the amount of € 10,461,366.26.
Piraeus Financial Holdings Group – 31 December 2023
396
52 Events Subsequent to the End of the Reporting Period
• On 10 January 2024, the Company issued € 500 million Subordinated Tier 2 Bond (hereinafter also called the “Bond”)
with a coupon of 7.250%. The Bond has a maturity of 10.25 years and an embedded issuer call option between year
5 and 5.25, with settlement taking place on 17 January 2024. The Bond was listed on the Luxembourg Stock
Exchange’s Euro MTF market and was rated B1 / B by Moody’s and Fitch, respectively. In conjunction with the ne w
issuance, the Company announced a cash tender offer on its 9.750% Non-Call June 2024 Subordinated Tier 2 notes.
In aggregate, the principal amount of the notes that were validly tendered pursuant to the offer stood at € 294
million. The funds raised through the new issue have been used by the Bank for financing the tender offer and for
solidifying its capital position.
• After the reporting period and up to the date of authorization for issuance of these annual financial statements, the
Bank engaged in additional receiver swaps, for hedging part of its NMDs for changes in market interest rates, with a
notional amount of € 3 billion. Hence, the total nominal value of NMDs currently hedged by the Group is € 10 billion.
Athens, 27 February 2024
CHAIRMAN
OF THE BOARD OF DIRECTORS
MANAGING
DIRECTOR
GROUP CHIEF
FINANCIAL OFFICER
DEPUTY CHIEF
FINANCIAL OFFICER
GEORGE P. HANDJINICOLAOU
ID No X 501829
CHRISTOS I. MEGALOU
ID No AE 011012
THEODOROS CH. GNARDELLIS
ID No AI 662109
GEORGE TH. MARINOPOULOS
ID No ΑΡ 154589
License No Class A 0137758
Pi r ae u s Fi n an c i a l Holdin g s G r o u p – 31 Dec e m b e r 2023
3 9 7
www.piraeusbankgroup.com
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