banque bemo saudi fransi sa consolidated financial statements and

Transcription

BANQUE BEMO SAUDI FRANSI S.A.
CONSOLIDATED FINANCIAL STATEMENTS
AND INDEPENDENT AUDITOR’S REPORT
FOR THE YEAR ENDED DECEMBER 31, 2011
TRANSLATED FROM ORIGINAL ARABIC FINANCIAL STATEMENTS
CONSOLIDATED FINANCIAL STATEMENTS
AND INDEPENDENT AUDITOR’S REPORT
FOR THE YEAR ENDED DECEMBER 31, 2011
TABLE OF CONTENTS
Page
Independent Auditor’s Report
1-2
Consolidated Financial Statements:
Consolidated Statement of Financial Position
3
Consolidated Income Statement
4
Consolidated Statement of Comprehensive Income
5
Consolidated Statement of Changes in Equity
6
Consolidated Statement of Cash Flows
7-8
Notes to the Consolidated Financial Statements
9 - 86
CONSOLIDATED INCOME STATEMENT
Year ended December 31,
2011
2010
SYP
SYP
Notes
Interest income
Interest expense
Net interest income
26
27
(
Fees and commissions income
Fees and commissions expense
Net fees and commissions income
28
29
(
Net interest, fees and commissions income
Net realized exchange gain
Net unrealized exchange gain on
structural position
(Loss) / gain from held-for-trading
financial assets
Gain on available for sale
financial assets
Other operating income
30
(
31
Profit for the year before tax
Net income tax
32
12
13
33
19
34
35
20-D
(
(
(
(
(
(
(
(
(
Net profit for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
Basic and diluted earnings per share
(
36
617,798,800
27,403,072) (
590,395,728
563,193,580
17,788,653)
545,404,927
3,033,441,741
2,620,604,178
308,728,094
196,972,988
384,504,453
33,828,417
12,666,617)
11,703,067
5,859,500
3,579,567
3,723,446,738
Total operating income
Salaries and related charges
Depreciation of property and equipment
Amortization of intangible assets
Provision for impairment of credit facilities
Miscellaneous provisions
Other operating expenses
Other provisions
Total operating expenses
3,546,309,657
3,225,730,215
1,103,263,644) ( 1,150,530,964)
2,443,046,013
2,075,199,251
1,008,405,379)
296,753,330)
13,608,047)
914,205,716)
46,906,161)
645,598,030)
25,000,000)
2,950,476,663)
4,370,000
12,895,293
2,880,373,943
(
(
(
(
(
(
838,612,890)
192,202,120)
13,888,946)
229,234,522)
34,132,000)
568,301,029)
( 1,876,371,507)
772,970,075
1,004,002,436
113,465,622) (
336,199,330)
659,504,453
667,803,106
663,912,236
4,407,783)
665,613,886
2,189,220
659,504,453
667,803,106
77.89
89.83
THE ACCOMPANYING NOTES FROM 1 TO 44 FORM AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
4
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2011
2010
SYP
SYP
Notes
Profit for the year
Other comprehensive income components:
Changes in fair value of
available for sale financial assets
Changes in deferred tax liabilities
659,504,453
24
20-C
(
Total comprehensive income for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
(
9,860,000)
2,465,000 (
667,803,106
9,775,000
10,582,500)
652,109,453
666,995,606
656,517,236
4,407,783)
664,806,386
2,189,220
652,109,453
666,995,606
5
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Balance as of
January 1, 2011
Capital increase
Comprehensive income
for the year
Allocation of net
profit for the year
Balance as of
December 31, 2011
Balance as of
January 1, 2010
Capital increase
Comprehensive income
for the year
Allocation of net
profit for the year
Balance as of
December 31, 2010
Capital
SYP
3,705,000,000
1,295,000,000
-
Legal
reserve
SYP
Special
reserve
SYP
385,311,022
-
385,311,022
-
-
-
-
Attributable to equity holders of the parent
Accumulated
changes
in fair value of
General
available for sale
Net profit
reserve
financial assets
for the year
SYP
SYP
SYP
79,699,745
-
39,486,350
39,486,350
104,960,447
5,000,000,000
424,797,372
424,797,372
184,660,192
3,250,000,000
455,000,000
288,439,687
-
288,439,687
-
-
-
3,705,000,000
-
31,747,500
(
-
96,871,335
96,871,335
79,699,745
385,311,022
385,311,022
79,699,745
7,395,000)
-
(
663,912,236
(
663,912,236)
Realized
retained
earnings
SYP
497,955,937
-
292,158,751
32,555,000
-
-
594,612,883
( 455,000,000)
(
31,747,500
665,613,886
-
665,613,886)
358,343,054
-
384,504,453
593,430,573
497,955,937
Total equity
attributable to
Non
equity holders controlling
of the parent
interests
SYP
SYP
92,345,702) 4,992,679,524
1,295,000,000
95,474,636
-
-
(
-
24,352,500
807,500)
Unrealized
retained
earnings /
(accumulated
losses)
SYP
656,517,236 (
-
4,407,783)
-
5,073,795,527
1,295,000,000
652,109,453
-
6,944,196,760
76,708,220
7,020,904,980
( 126,174,119) 4,327,873,138
-
78,926,783
-
4,406,799,921
-
664,806,386
2,189,220
666,995,606
-
-
33,828,417
(
92,345,702)
4,992,679,524
6
81,116,003
-
Total
equity
SYP
81,116,003
5,073,795,527
CONSOLIDATED STATEMENT OF CASH FLOWS
2011
2010
SYP
SYP
Notes
Cash flows from operating activities
Profit for the year before income tax
Adjustments to reconcile income to net cash
used in operating activities
Amortization of premium and discount on
held to maturity financial assets
Unrealized loss/ (gain) on held-for-trading
financial assets
Loss on disposal of held-for-trading
financial assets
Loss on disposal of property and equipment
Additions of miscellaneous provisions
Write- off bad debts
12
13
33
772,970,075
1,004,002,436
296,753,330
13,608,047
914,205,716
192,202,120
13,888,946
229,234,522
8,838,269
11,076,824
(
Profit before changes in operating
assets and liabilities
3,839,741
869,554
46,906,161
4,423,736)
2,064,643,981
(
11,703,067)
28,904,170
1,456,529,127
Changes in operating assets and liabilities
Decrease / (increase) in compulsory
cash reserve
Decrease / (increase) in deposits with banks
(with maturity over 3 months)
Decrease / (increase) in direct credit facilities
Decrease in other assets
Increase/ (decrease) in cash margins
(Decrease)/ increase in customers’ deposits
Increase in other liabilities
Settlement of tax penalties
Net cash used in operating
activities before income tax
Income tax paid
7,226,465,219
19
20-A
( 1,063,561,101)
26,002,639,522 ( 4,642,191,670)
3,121,367,336 ( 8,948,779,933)
227,688,868
20,253,619
221,367,621 (
340,798,702)
( 41,831,812,647)
12,025,984,734
199,306,118
218,563,541
(
34,588,282)
(
(
2,802,922,264) ( 1,274,000,385)
229,911,824) (
343,247,415)
( 3,032,834,088) ( 1,617,247,800)
Net cash used in operating activities
7
CONSOLIDATED STATEMENT OF CASH FLOWS / CONTINUED
2011
2010
SYP
SYP
Notes
Cash flows from investing activities
Loans and advances to banks
Held to maturity financial assets
Purchase of property and equipment
Purchase of intangible assets
Proceed from disposal of property
and equipment
Blocked deposit with Central Bank of Syria
Purchase of held-for-trading financial assets
Sale of held-for-trading financial assets
Investment in available for sale
financial assets
13
Net cash used in investing activities
Cash flows from financing activities
Dividends paid
Paid in capital
22
(
(
150,000,000
( 1,491,403,713)
936,751,621) (
622,059,415)
8,958,115) (
10,279,157)
(
(
860,000
132,482,761) (
23,224,914) (
20,973,075
45,500,000)
24,020,148)
-
(
737,750) (
7,314,030)
(
1,080,322,086) ( 2,050,576,463)
(
55,590) (
1,295,000,000
1,150,650)
-
1,294,944,410
1,150,650)
Net cash provided by / (used in) financing activities
Difference in exchange rate of financial assets
(
Net decrease in cash and cash equivalent
(
256,360,456)
(
3,334,354
3,074,572,220) ( 3,665,640,559)
Cash and cash equivalent at the beginning of year 37
34,052,872,956
37,718,513,515
Cash and cash equivalent at the end of year
30,978,300,736
34,052,872,956
3,652,850,297
1,061,168,504
5,859,500
3,284,371,425
1,145,703,697
4,250,000
37
Operational cash flow from interests and dividends
Interest received
Interest paid
Dividend income received
Non-cash transactions
Transfers from realized retained earnings to capital
-
455,000,000
8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2011
1.
FORMATION AND ACTIVITIES OF THE BANK
Banque Bemo Saudi Fransi S.A., “the Bank”, is a Syrian Joint stock company, registered under
commercial registration number 13901 on December 29, 2003 and under number 8 in the banks’
register. The Bank’s headquarters is located in 29 Ayyar Street, Damascus, Syria.
The Bank was established with an initial capital of SYP 1,500,000,000 divided into 3,000,000 shares
with SYP 500 par value each. The capital was gradually increased to SYP 5,000,000 divided into
10,000,000 shares with SYP 500 par value each. The Bank’s shares are listed in Damascus Securities
Exchange.
The Bank started its operations on January 4, 2004. The Bank offers several banking services through its
network of 43 branches and offices spread around Syria.
On November 5, 2007, Monetary and Credit Council circular number 324/MN/B4 was issued, which
allows the Bank to contribute in establishing a financial brokerage company called Bemo Saudi Fransi
Finance S.A. On February 5, 2008, the Bank settled its contribution that represents 74.67% of the
Subsidiary’s capital.
On February 28, 2012, the board of directors has approved the consolidated financial statements for the
year ended December 31, 2011.
2.
ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS
(IFRSs)
2.1
Standards and Interpretations effective for the current period
The following new and revised standards and interpretations have been applied in the current year with
no material impact on the disclosures and amounts reported for the current and prior years, but may
affect the accounting for future transactions or arrangements:
•
Amendments to IAS 24 Related Party Disclosures (as revised in 2009) modify the definition of a
related party and simplify disclosures for government-related entities. The Bank is not a
government-related entity and the application of the revised definition of related party set out in
IAS 24 (as revised in 2009) in the current year has not resulted in the identification of related
parties that were not identified as related parties under the previous Standard.
•
Amendments to IAS 32 Classification of Rights Issues address the classification of certain rights
issues denominated in a foreign currency as either equity instruments or as financial liabilities. The
application of the amendments has had no effect on the amounts reported in the current and prior
years because the Bank has not issued instruments of this nature.
•
Amendments to IFRIC 14 - Prepayments of a Minimum Funding Requirement. The amendments
correct an unintended consequence of IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset,
Minimum Funding Requirements and their Interaction. The application of the amendments has had
no effect on the Bank’s financial statements.
9
•
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments provides guidance regarding
the accounting for the extinguishment of a financial liability by the issue of equity instruments. In
particular equity instruments issued under such arrangements are measured at their fair value, and
any difference between the carrying amount of the financial liability extinguished and the fair value
of equity instruments issued are recognized in profit or loss. The application of IFRIC 19 has had
no effect on the amounts reported in the current and prior years because the Bank has not entered
into any transactions of this nature.
•
Improvements to IFRSs issued in 2010 – Amendments to: IFRS 1; IFRS 3 (2008); IFRS 7; IAS 1;
IAS 27 (2008); IAS34; IFRIC 13. The application of these improvements to IFRSs issued in 2010
has not had any material effect on amounts reported in the combined financial statements.
2.2
Standards and Interpretations in issue but not yet effective
The Bank has not applied the following new standards, amendments and interpretations that have been
issued but not yet effective:
Effective for
annual periods
beginning on or after
----------------------------------------------------
• Amendments to IFRS 7 Disclosures – Transfers of Financial
Assets increase the disclosure requirements for transactions
involving transfers of financial assets. These amendments are
intended to provide greater transparency around risk exposures
of transactions when a financial asset is transferred but the
transferor retains some level of continuing exposure in the asset.
The amendments also require disclosures where transfers of
financial assets are not evenly distributed throughout the period.
Currently, the Bank has not entered into such transactions.
July 1, 2011
• IFRS 9 Financial Instruments issued in November 2009 and
amended in October 2010 introduces new requirements for the
classification and measurement of financial assets and financial
liabilities and for derecognition.
January 1, 2015
• Amendments to IFRS 7 Financial Instruments: Disclosures
relating to disclosures about the initial application of IFRS 9
January 1, 2015 or otherwise
when IFRS 9 is first applied
• IFRS 10 Consolidated Financial Statements* replaces the parts
of IAS 27 Consolidated and Separate Financial Statements that
deal with consolidated financial statements, and SIC 12
Consolidation – Special Purpose Entities. IFRS 10 uses control
as the single basis for consolidation, irrespective of the nature of
the investee and includes a new definition of control. IFRS 10
requires retrospective application subject to certain transitional
provisions providing an alternative treatment in certain
circumstances. IAS 27 Consolidated and Separate Financial
Statements* and IAS 28 Investments in Associates and Joint
Ventures* have been amended for the issuance of IFRS 10.
January 1, 2013
10
IFRS 11 Joint Arrangements* replaces IAS 31 Interests in Joint
Ventures and SIC-13 Jointly Controlled Entities – Non monetary
Contributions by Venturers. IFRS 11 establishes two types of
joint arrangements: Joint operations and joint ventures. The two
types of joint arrangements are distinguished by the rights and
obligations of those parties to the joint arrangement. In addition,
joint ventures under IFRS 11 are required to be accounted for
using the equity method of accounting, whereas jointly controlled
entities under IAS 31 can be accounted for using the equity
method of accounting or proportionate. IAS 28 Investments in
Associates and Joint Ventures has been amended for the issuance
of IFRS 11.
January 1, 2013
• IFRS 12 Disclosure of Interests in Other Entities* is a disclosure
standard and is applicable to entities that have interests in
subsidiaries,
joint
arrangements,
associates
and/or
unconsolidated structured entities. In general, the disclosure
requirements in IFRS 12 are more extensive than those in the
current standards.
January 1, 2013
• IFRS 13 Fair Value Measurement defines fair value, establishes a
single framework for measuring fair value, and requires
disclosures about fair value measurement. The scope of IFRS 13
is broad and applies to both financial and non-financial items for
which other IFRSs require or permit fair value measurement and
disclosures about fair value measurements, except in specified
circumstances. In general, the disclosure requirements in IFRS
13 are more extensive than those required in the current
standards
January 1, 2013
• Amendments to IAS 1 – Presentation of Other Comprehensive
Income. The amendments retain the option to present profit or
loss and other comprehensive income in either a single statement
or in two separate statements. However, items of other
comprehensive income are required to be grouped into those that
will and will not subsequently be reclassified to profit or loss
with tax on items of other comprehensive income required to be
allocated on the same basis.
July 1, 2012
• Amendments to IAS 12 Income Taxes provide an exception to the
general principles of IAS 12 for investment property measured
using the fair value model in IAS 40 Investment Property by the
introduction of a rebuttable presumption that the carrying
amount of the investment property will be recovered entirely
through sale.
January 1, 2012
• Amendments to IAS 19 Employee Benefits eliminate the
“corridor approach” and therefore require an entity to recognize
changes in defined benefit plan obligations and plan assets when
they occur.
January 1, 2013
11
• IFRIC 20 Stripping Costs in the Production Phase of a Surface
Mine
January 1, 2013
• Amendments to IFRS 7 Financial Instruments: Disclosures
enhancing disclosures about offsetting of financial assets and
liabilities.
January 1, 2013
• Amendments to IAS 32 Financial Instruments: Presentation
relating to application guidance on the offsetting of financial
assets and financial liabilities.
January 1, 2013
*In May 2011, a package of five Standards on consolidation, joint arrangements, associates and
disclosures was issued, including IFRS 10, IFRS 11, IFRS 12, IAS 27 (as revised in 2011) and IAS 28
(as revised in 2011). These five standards are effective for annual periods beginning on or after 1
January 2013. Earlier application is permitted provided that all of these five standards are applied early
at the same time.
Management anticipates that the adoption of the above Standards and Interpretations in future years will
have no material impact on the financial statements of the Bank in the period of initial application,
except for the effect of the application of IFRS 9.
Summary of IFRS 9
Financial assets
IFRS 9 introduces new classification and measurement requirements for financial assets that are within
the scope of IAS 39 Financial Instruments: Recognition and Measurement. Specifically. As a general
rule, IFRS 9 requires all financial assets to be classified and subsequently measured at either amortized
cost or fair value on the basis of the entity’s business model for managing the financial assets and the
contractual cash flow characteristics of the financial assets. However, equity securities and derivatives
should all be measured at fair value.
As required by IFRS 9, debt instruments are measured at amortized cost only if the asset is held within a
business model whose objective is to hold assets in order to collect contractual cash flows and the
contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments
of principal and interest on the principal amount outstanding. If either of the two criteria is not met, the
debt instruments are classified as at fair value through profit or loss (FVTPL).
However, the Bank may choose at initial recognition to designate a debt instrument that meets the
amortized cost criteria as at FVTPL if doing so eliminates or significantly reduces an accounting
mismatch.
Debt instruments that are subsequently measured at amortized cost are subject to impairment.
Investments in equity instruments are classified and measured as at FVTPL except when the equity
investment is not held-for-trading and is designated by the Bank as at fair value through other
comprehensive income (FVTOCI). If the equity investment is designated as at FVTOCI, all gains and
losses, except for dividend income that is generally recognized in profit or loss in accordance with IAS
18 Revenue, are recognized in other comprehensive income and are not subsequently reclassified to
profit or loss.
12
For debt instruments not designated at fair value through profit or loss under the fair value option,
reclassification is required between fair value through profit or loss and amortized cost, or vice versa, if
the Bank’s business model objective for its financial assets changes so that its previous measurement
basis no longer applies.
IFRS 9 requires that derivatives embedded in contracts with a host that is a financial asset within the
scope of the standard are not separated. Instead the hybrid financial instrument is assessed in its entirety
as to whether it should be measured at amortized cost or fair value.
Financial liabilities
IFRS 9 also contains requirements for the classification and measurement of financial liabilities. One
major change in the classification and measurement of financial liabilities relates to the accounting for
changes in the fair value of a financial liability (designated as at fair value through profit or loss)
attributable to changes in the credit risk of that liability.
For financial liabilities that are designated as at fair value through profit or loss, the amount of change in
the fair value of the financial liability that is attributable to changes in the credit risk of that liability is
presented in other comprehensive income, unless the recognition of the effects of changes in the
liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in
profit or loss. Changes in the fair value attributable to a financial liability’s credit risk are not
subsequently reclassified to profit or loss. Previously, under IAS 39, the entire amount of the change in
the fair value of the financial liability designated as at fair value through profit or loss was presented in
profit or loss.
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Statement of compliance
The consolidated financial statements were prepared in accordance with International Financial Reporting
Standards (IFRSs), the prevailing local regulations and the instructions and decisions of Monetary and
Credit Council.
Basis of preparation
The consolidated financial statements have been prepared on historical cost basis except for the
following items measured at fair value:
- Assets and liabilities held for trading.
- Financial instruments designated at fair value through profit or loss.
- Investments in equities.
- Available-for-sale financial assets.
- Derivative financial instruments measured at fair value.
Assets and liabilities are grouped according to their nature and are listed in an approximate order that
reflects their relative liquidity.
The consolidated financial statements are presented in Syrian Pounds (SYP), which is the Bank’s
functional currency and reporting currency.
A-
Basis of consolidation
The consolidated financial statements incorporate the financial statements of Banque Bemo Saudi Fransi
S.A. and its subsidiary Bemo Saudi Fransi Finance S.A. for the year ended December 31, 2011. Control
is achieved when the Bank has the power to govern the financial and operating policies of an entity to
obtain benefits from its activities, generally conferred by holding a majority of voting rights.
13
Subsidiaries are consolidated from the date when the Bank gains control until the date when control
ceases. The financial statements of the subsidiary are prepared for the same reporting period as that of
the Bank, using consistent accounting policies. All significant inter-company balances, income and
expense items are eliminated on consolidation.
Changes in the Bank’s ownership interests in subsidiaries that do not result in the Bank losing control
over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Bank’s
interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in
the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted
and the fair value of the consideration paid or received is recognized directly in equity and attributed to
owners of the Bank.
Non-controlling interests represent the portion of profit or loss and net assets not owned, directly or
indirectly, by the Bank and are presented separately within equity in the consolidated financial
statements.
The subsidiaries of Banque Bemo Saudi Fransi S.A. consist of Bemo Saudi Fransi Finance S.A. as of
December 31, 2011.
The subsidiary’s main activities include providing consultation and analysis regarding financial
securities in addition to buying and selling financial securities on behalf of the Bank and other clients.
The Bank ownership is 74.67% of its subsidiary.
B.
Foreign currencies
In preparing the financial statements of the Bank, transactions in currencies other than the entity'
s
functional currency (foreign currencies) are recognized at the rates of exchange prevailing at the dates of
the transactions. At the end of each reporting period, monetary items denominated in foreign currencies
are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are
denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value
was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency
are not retranslated.
Exchange differences on monetary items are recognized in profit or loss in the period in which they arise
except for exchange differences on transactions entered into in order to hedge certain foreign currency
risks, and except for exchange differences on monetary items receivable from or payable to a foreign
operation for which settlement is neither planned nor likely to occur in the foreseeable future, which are
recognized in other comprehensive income, and presented in the translation reserve in equity. These are
recognized in profit or loss on disposal of the net investment.
C. Recognition and Derecognition of financial assets and liabilities
The Bank initially recognizes loans and advances, deposits; debt securities issued and subordinated
liabilities on the date that they are originated. All other financial assets and liabilities are initially
recognized on the trade date at which the Bank becomes a party to the contractual provisions of the
instrument.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are
directly attributable to the acquisition or issue of financial assets and financial liabilities (other than
financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from
the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition.
Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair
value through profit or loss are recognised immediately in profit or loss.
14
The Bank derecognises a financial asset only when the contractual rights to the cash flows from the asset
expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of
the asset to another entity. If the Bank neither transfers nor retains substantially all the risks and rewards
of ownership and continues to control the transferred asset, the Bank recognises its retained interest in
the asset and an associated liability for amounts it may have to pay. If the Bank retains substantially all
the risks and rewards of ownership of a transferred financial asset, the Bank continues to recognise the
financial asset and also recognises a collateralised borrowing for the proceeds received.
On derecognition of a financial asset in its entirety, the difference between the asset'
s carrying amount
and the sum of the consideration received and receivable and the cumulative gain or loss that had been
recognised in other comprehensive income and accumulated in equity is recognised in profit or loss.
The Bank derecognises financial liabilities when, and only when, the Bank’s obligations are discharged,
cancelled or they expire. The difference between the carrying amount of the financial liability
derecognised and the consideration paid and payable is recognised in profit or loss.
D. Classification of financial assets
Subsequent to initial recognition, investment securities are accounted for depending on their classification
as either: held-to-maturity, loans and receivables, available-for-sale, or fair value through profit or loss.
Held to maturity investment
Held to maturity investments are non-derivative financial assets with fixed or determinable
payments and fixed maturity dates that the Bank has the positive intent and ability to hold to
maturity, and which are not designated at fair value through profit or loss or available-for-sale.
Held to maturity investments are measured at amortized cost using the effective interest method
less any impairment.
Loans and receivables investment
Loans and receivables investments are non-derivative financial assets with fixed or determinable
payments and fixed maturity dates that the Bank has the positive intent and ability to hold to
maturity. Subsequent to initial recognition, loans and receivables investments are measured at
amortized cost using the effective interest method less any impairment.
Available for sale financial assets
Available-for-sale investments are non-derivative investments that are not designated as another
category of financial assets. Unquoted equity securities whose fair value cannot be readily
measured are carried at cost. All other available-for-sale investments are carried at fair value and
unrealized gains or losses are included in other comprehensive income.
The change in fair value on available-for-sale debt securities reclassified to held-to-maturity is
segregated from the change in fair value of available-for-sale debt securities under equity and is
amortized over the remaining term to maturity of the debt security as a yield adjustment.
Designation at fair value through profit or loss
The Bank designates financial assets and liabilities at fair value through profit or loss when either:
•
The financial assets or liabilities are managed, evaluated and reported internally on a fair
value basis; or
•
The designation eliminates or significantly reduces an accounting mismatch which would
otherwise arise; or
•
The financial assets or liabilities contain an embedded derivative that significantly modifies
the cash flows that would otherwise be required under the contract.
15
E. Financial liabilities and equity instruments
Classification as debt or equity
Debt and equity instruments issued by the Bank are classified as either financial liabilities or as
equity in accordance with the substance of the contractual arrangements and the definitions of a
financial liability and an equity instrument.
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by the Bank are recognised at the proceeds
received, net of direct issue costs.
Repurchase of the Bank'
s own equity instruments is recognised and deducted directly in equity. No
gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of the Bank'
s
own equity instruments.
The component parts of compound instruments (convertible notes) issued by the Bank are
classified separately as financial liabilities and equity in accordance with the substance of the
contractual arrangements and the definitions of a financial liability and an equity instrument.
Conversion option that will be settled by the exchange of a fixed amount of cash or another
financial asset for a fixed number of the Bank'
s own equity instruments is an equity instrument.
Financial liabilities
A financial liabilities that are not held-for-trading and are not designated as at FVTPL are
subsequently measured at amortized cost using the effective interest method.
Financial liabilities are classified as at FVTPL when the financial liability is either held-for-trading
or it is designated as at FVTPL.
A financial liability other than a financial liability held-for-trading may be designated as at FVTPL
upon initial recognition if:
•
Such designation eliminates or significantly reduces a measurement or recognition
inconsistency that would otherwise arise; or
•
The financial liability forms part of a group of financial assets or financial liabilities or
both, which is managed and its performance is evaluated on a fair value basis, in
accordance with the Bank'
s documented risk management or investment strategy, and
information about the grouping is provided internally on that basis; or
•
It forms part of a contract containing one or more embedded derivatives, and the entire
combined contract (asset or liability) to be designated as at FVTPL according to IFRS 9.
F. Offsetting between Financial Assets and Liabilities
Financial assets and liabilities are set-off and the net amount is presented in the consolidated statement of
financial position when, and only when, the Bank has a legal right to set-off the amounts or intends either
to settle on a net basis or to realize the asset and settle the liability simultaneously.
16
G. Fair Value Measurement of Financial Assets
Fair value is the amount agreed to exchange an asset or to settle a liability between a willing buyer and a
willing seller in an arm’s length transaction.
When published price quotations exist, the Bank measures the fair value of a financial instrument that is
traded in an active market using quoted prices for that instrument. A financial instrument is regarded as
quoted in an active market if quoted prices are readily and regularly available and those prices represent
actual and regularly occurring market transactions on an arm’s length basis.
If the market for a financial instrument is not active, the Bank establishes fair value by using valuation
techniques. Valuation techniques include observable market data about the market conditions and other
factors that are likely to affect the instrument’s fair value.
The fair value of a financial instrument is based on one or more factors such as the time value of money
and the credit risk of the instrument, adjusted for any other factors such as liquidity risk.
H. Impairment of Financial Assets
The Bank assesses the financial assets at each reporting date, except for those classified at fair value
through profit or loss, whether there is any objective evidence that the financial assets are impaired.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that
occurred after the initial recognition of the asset, a loss event has occurred which has an impact on the
estimated future cash flows of the financial asset.
Objective evidence that an impairment loss related to financial assets has been incurred can include
information about the debtors’ or issuers’ liquidity, solvency and business and financial risk exposures and
levels of and trends in delinquencies for similar financial assets, taking into account the fair value of
collaterals and guarantees.
The Bank considers evidence of impairment for assets measured at amortized cost at both specific asset
and collective level.
Impairment losses on assets carried at amortized cost are measured as the difference between the carrying
amount of the financial assets and the corresponding estimated recoverable amounts. Losses are
recognized in profit or loss. If, in a subsequent period, the amount of the impairment loss decreases, the
previously recognized impairment loss is reversed through profit or loss to the extent that the carrying
amount of the financial asset at the date the impairment is reversed does not exceed what the amortized
cost would have been, had the impairment not been recognized.
For investments in equity securities, a significant or prolonged decline in fair value below cost is objective
evidence of impairment.
For available-for-sale investment securities, the cumulative losses previously recorded in other
comprehensive income and accumulated in equity were recognized in profit or loss in case the impairment
losses are substantiated by a prolonged decline in fair value of the investment securities. Any increase in
the fair value of available-for-sale equity securities, subsequent to an impairment loss, was not recognized
in profit or loss. Any increase in the fair value of available-for-sale debt securities, subsequent to an
impairment loss, was recognized in profit or loss.
17
I. Derivatives financial instruments
Derivatives are initially recognized at fair value at the date the derivative contract are entered into and
are subsequently remeasured to their fair value at the end of each reporting period. The resulting gain or
loss is recognized in profit or loss immediately unless the derivative is designated and effective as a
hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature
of the hedge relationship.
Embedded derivatives
Derivatives embedded in non-derivative host contracts are treated as separate derivatives when
their risks and characteristics are not closely related to those of the host contracts and the host
contracts are not measured at FVTPL.
Hedge accounting
The Bank enters into a variety of derivative financial instruments to manage the exposure to interest
The Bank designates certain hedging instruments, which include derivatives, embedded derivatives
and non-derivatives in respect of foreign currency risk, as either fair value hedges, cash flow
hedges, or hedges of net investments in foreign operations. Hedges of foreign exchange risk on
firm commitments are accounted for as cash flow hedges.
At the inception of the hedge relationship, the entity documents the relationship between the
hedging instrument and the hedged item, along with its risk management objectives and its
strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and
on an ongoing basis, the Bank documents whether the hedging instrument is highly effective in
offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk.
Fair value hedges
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are
recognised in profit or loss immediately, together with any changes in the fair value of the hedged
asset or liability that are attributable to the hedged risk. The change in the fair value of the hedging
instrument and the change in the hedged item attributable to the hedged risk are recognised in the
line of the consolidated [statement of comprehensive income/income statement] relating to the
hedged item.
Hedge accounting is discontinued when the Bank revokes the hedging relationship, when the
hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for
hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising
from the hedged risk is amortised to profit or loss from that date.
Cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as
cash flow hedges is recognized in other comprehensive income and accumulated under the heading
of cash flow hedging reserve. The gain or loss relating to the ineffective portion is recognized
immediately in profit or loss, and is included in the ‘other gains and losses'line item.
Amounts previously recognized in other comprehensive income and accumulated in equity are
reclassified to profit or loss in the periods when the hedged item is recognized in profit or loss, in
the same line of the consolidated [statement of comprehensive income/income statement] as the
recognized hedged item. However, when the hedged forecast transaction results in the recognition
of a non-financial asset or a non-financial liability, the gains and losses previously recognized in
other comprehensive income and accumulated in equity are transferred from equity and included
in the initial measurement of the cost of the non-financial asset or non-financial liability.
18
Hedge accounting is discontinued when the Bank revokes the hedging relationship, when the
hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for
hedge accounting. Any gain or loss recognised in other comprehensive income and accumulated in
equity at that time remains in equity and is recognised when the forecast transaction is ultimately
recognised in profit or loss. When a forecast transaction is no longer expected to occur, the gain or
loss accumulated in equity is recognised immediately in profit or loss.
J.
Loans and advances
Loans and receivables investments are non-derivative financial assets with fixed or determinable
payments and fixed maturity dates that the Bank has the positive intent and ability to hold to maturity.
Loans and receivables investments are measured at amortized cost using the effective interest method
net of unearned interest and provision for credit losses where applicable.
Bad and doubtful debts are carried on a cash basis because of doubts and the probability of noncollection of principal and/or interest.
K.
Financial guarantees
Financial guarantees contracts are contracts that require the Bank to make specified payments to reimburse
the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance
with the contractual terms. These contracts can have various judicial forms (guarantees, letters of credit,
credit-insurance contracts).
Financial guarantee liabilities are initially measured at their fair value, and subsequently carried at the
higher of this amortized amount and the present value of any expected payment (when a payment under
the guarantee has become probable). Financial guarantees are included within regularization accounts
under the assets and the liabilities.
L.
Property and equipment
Property and equipment are stated at historical cost, less accumulated depreciation and impairment
losses, if any.
Depreciation is recognized so as to write off the cost of property and equipment, other than advance payments
on capital expenditures, over their estimated useful lives using the straight-line method as follows:
%
Buildings
Office equipment and furniture
Vehicles
Computer equipment
Leasehold improvement
5
10-20
20
20
20
The estimated useful lives, residual values and depreciation method are reviewed at the each year end,
with the effect of any changes in estimate accounted for on a prospective basis.
Gain or loss arising on the disposal or retirement of an asset is determined as the difference between the
sales proceeds and the carrying amount of the asset at that date and is recognized in the consolidated
income statement.
19
M.
Intangible assets
Intangible assets, other than goodwill, are amortized over their estimated useful lives, using the straightline method at the following rates:
Key money
Software
%
5
20
Intangible assets are subject to impairment testing.
N.
Impairment of Tangible and Intangible Assets (Other than Goodwill):
At the end of each reporting period, the Bank reviews the carrying amounts of its tangible and intangible
assets to determine whether there is any indication that those assets have suffered an impairment loss. If
any such indication exists, the recoverable amount of the asset is estimated in order to determine the
extent of the impairment loss (if any).
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in
use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying
amount of the asset is reduced to its recoverable amount. An impairment loss is recognized immediately
in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment
loss is treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset
(cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that would have been determined had
no impairment loss been recognized for the asset (cash-generating unit) in prior years. A reversal of an
impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a
revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.
The fair value of the Bank’s owned properties and of properties acquired in satisfaction of loans debts, is
the estimated market value as determined by real estate appraisers on the basis of market compatibility
by comparing with similar transactions in the same geographical area and on the basis of the expected
value of a current sale between a willing buyer and a willing seller, that is, other than in a forced or
liquidation sale after adjustment of an illiquidity factor and market constraints.
O.
Contributions to social security and end of service indemnity
The Bank is registered in the Syrian Social Security Establishment and makes contributions on account of
its employees. These contributions include the Bank’s engagement towards its employees concerning endof-service indemnities that will be allocated to them by the Social Security Establishment. The Bank has
no other liability towards its employees’ end of service indemnity.
P.
Provisions
Provision is recognized if, as a result of a past event, the Bank has a present legal or constructive
obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be
required to settle the obligation. Provisions are determined by discounting the expected future cash flows
at a pre-tax rate that reflects current market assessments of the time value of money and, where
appropriate, the risks specific to the liability.
20
Q.
Revenue and expense recognition
Interest income and interest expense are recognized in the consolidated income statement using the
effective interest method, taking account of the principal outstanding and the rate applicable, except for
non-performing loans and advances for which interest income is only recognized upon realization. Interest
income and expense include the amortization of discount or premium.
Fees and commission income and expense that are integral to the effective interest rate on a financial asset
or liability (i.e. commissions and fees earned on loans) are included under interest income and expense.
Other fees and commission income are recognized when the related services are performed.
Interest income and expense presented in the income statement include:
•
•
•
Interest on financial assets or liabilities measured at amortized cost;
Interest on investment in available for sale financial assets; and
Changes in fair value for acceptable derivatives including effective and non-effective items when
interest rate risks have been hedged.
Interest income on financial assets designated at fair value through profit or loss and interest income on
trading portfolio are presented separately in the consolidated income statement.
Net other income on financial assets designated at fair value through profit or loss other than held-fortrading includes the following:
•
•
•
Dividends;
Realized and unrealized profit of loss; and
Difference in exchange.
Dividend income is recognized when the right to receive the payment is established and are presented
under available for sale financial assets in net other income.
R.
Income tax
Income tax expense represents the sum of the tax currently payable and deferred tax.
The Bank is computing its income tax in accordance with law number 28 dated April 16, 2001, which sets
the income tax rate at 25% of the net taxable income. Taxable profit differs from net profit as reported in
the statement of income because it excludes items of income or expense that are taxable or deductible in
other years and it further excludes items that are never taxable or deductible.
Current tax is the expected tax payable on the taxable income for the year, using rates enacted at the
statement of financial position date. Income tax payable is reflected in the consolidated statement of
financial position net of taxes previously settled in the form of withholding tax.
Deferred tax is recognized on differences between the carrying amounts of assets and liabilities in the
financial statements and the corresponding tax base used in the computation of taxable profit, and are
accounted for using the statement of financial position liability method. Deferred tax liabilities are
generally recognized for all taxable temporary differences and deferred tax assets are recognized to the
extent that it is probable that taxable profits will be available against which deductible temporary
differences can be utilized.
S.
Fiduciary accounts
Fiduciary assets held or invested on behalf of individuals, others are non-discretionary basis, and related
risks and rewards belong to the account holders. Accordingly, these deposits are reflected as off-balance
sheet accounts.
21
T.
Cash and cash equivalents
Cash and cash equivalents comprise balances with original maturity of a period of three months or less,
and include: cash and balances with Central Bank, balances with banks and financial institutions after
deducting deposits of banks and financial institutions (with original maturity of 3 months or less).
U.
Earning per share
The Bank presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is
calculated by dividing the profit or loss attributable to ordinary shareholders of the Bank by the
weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined
by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of
ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share
options granted to employees, where applicable.
4.
CRITICAL ACCOUNTING JUDGMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Bank’s accounting policies, management is required to make judgments,
estimates and assumptions about the carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognized in the period in which the estimate is revised if the revision affects only that
period or in the period of the revision and future periods if the revision affects both current and future
periods.
Key sources of estimation uncertainty
The following are the key assumptions concerning the future, and other key sources of estimation
uncertainty at the statement of financial position date, that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next financial year.
(i)
Impairment losses on loans and advances
The Bank reviews its loan portfolios to assess impairment on a regular basis. In determining whether an
impairment loss should be recorded, the Bank makes judgments as to whether there is any observable
indications that there is a measurable decrease in the estimated future cash flows from a portfolio of
loans. This evidence may include observable data indicating that there has been an adverse change in
the payment status of the debtors of the Bank, or national or local economic conditions that correlate
with defaults on assets in the Bank.
Management uses judgment and estimates based on historical loss experience for assets with credit risk
characteristics and objective evidence of impairment similar to those in the portfolio when estimating its
cash flows. The methodology and assumptions used for estimating both the amount and the timing of
future cash flows are reviewed regularly to reduce any differences between loss estimates and actual loss
experience.
(ii)
Fair value of unquoted financial instruments
The fair values of financial instruments that are not quoted in active markets are determined by using
valuation techniques. To the extent practical, models use only observable data, however factors such as
credit risk (both own and counterparty), volatilities and correlations require management to make
estimates. Changes in assumptions about these factors could affect the reported fair value of financial
instruments.
22
(iii) Impairment of assets and required provisions
Under the current unrest situations witnessed in Syria, Management has assessed the recoverability of
the Bank’s assets, and is satisfied that no additional provisions for impairment are needed, other than
those included in the accompanying financial statements.
5.
CASH AND BALANCES WITH CENTRAL BANK OF SYRIA
This caption includes the following:
2011
SYP
Cash on hand
Balances with Central Bank of Syria
Current accounts and demand deposits
Cash compulsory reserve
Blocked account with Central Bank of Syria
December 31,
2010
SYP
4,518,676,584
3,475,954,433
5,913,378,691
3,189,594,591
18,449,968
22,278,159,555
10,416,059,810
18,449,968
13,640,099,834
36,188,623,766
According to banking laws and regulations in Syria, Circular No. (389/MN/B4) dated May 5, 2008 and
Circular No. (738/MN/B4) dated January 31, 2011 issued by Monetary and Credit Council and Circular
No. 5938 dated May 2, 2011 issued by the Prime Minister, Banks were required to decrease cash
compulsory reserve with Central Bank of Syria from 10% to 5% of average accounts on demand, saving
and term deposits excluding housing deposits.
This reserve is compulsory and cannot be used in the Bank’s operating activities.
6.
BALANCES WITH BANKS
This caption comprises the following:
Resident banks
SYP
Term deposits (with original maturity
of three months or less)
Total
SYP
684,993,174
9,132,808,085
9,817,801,259
835,800,000
11,372,761,523
12,208,561,523
1,520,793,174
20,505,569,608
22,026,362,782
Resident banks
SYP
of three months or less)
December 31, 2011
Non-resident banks
SYP
1,174,440,549
1,174,440,549
December 31, 2010
Non-resident banks
SYP
Total
SYP
644,173,275
1,818,613,824
7,634,001,269
7,634,001,269
8,278,174,544
9,452,615,093
Non-interest bearing balances with banks amounted to SYP 3,444,639,623 as of December 31, 2011
(compared to SYP 1,657,296,527 as of December 31, 2010).
Blocked accounts with banks associated with commercial transactions amounted to SYP 185,068,710 as
of December 31, 2011 (compared to SYP 10,765,602 as of December 31, 2010).
23
7.
DEPOSITS WITH BANKS
over three months)
over three months)
8.
Resident banks
SYP
December 31, 2011
Non-resident banks
SYP
Total
SYP
239,608,476
780,860,166
1,020,468,642
239,608,476
780,860,166
1,020,468,642
Resident banks
SYP
December 31, 2010
Non-resident banks
SYP
Total
SYP
3,122,336,164
23,900,772,000
27,023,108,164
3,122,336,164
23,900,772,000
27,023,108,164
HELD-FOR-TRADING FINANCIAL ASSETS
2011
SYP
Shares
Bonds quoted in foreign markets
24
December 31,
2010
SYP
13,116,780
379,765,032
26,090,761
321,501,234
392,881,812
347,591,995
9.
NET DIRECT CREDIT FACILITIES
2011
SYP
Corporate
Overdrafts
Loans and advances
Unearned interest on loans
Discounted bills
Unearned interest on discounted bills
December 31,
2010
SYP
7,589,328,426
5,632,413,248
8,285,104,942
6,469,502,062
(
182,636,197) (
189,782,155)
3,757,794,573
3,862,439,632
(
393,248,181) (
436,907,423)
19,056,343,563
Individuals and estate loans
Loans and advances
Credit cards
15,337,665,364
9,669,547,079
10,485,713,447
24,417,844
45,354,225
(
26,494,718) (
62,954,864)
9,667,470,205
Small & medium size enterprises
Overdrafts
Loans and advances
Discounted bills
Unearned interest on discounted bills
10,468,112,808
1,912,388,264
2,634,932,506
3,671,465,182
3,993,055,746
(
96,276,370) (
166,514,710)
787,685,752
1,550,548,103
(
82,430,261) (
175,393,285)
6,192,832,567
Governmental & public sector
Loans and advances
Total
Provision for impairment of direct credit facilities
Suspended interest
-
4,215,000,000
-
4,215,000,000
34,916,646,335
37,857,406,532
( 1,602,736,115) (
(
378,474,089) (
Net direct credit facilities
32,935,436,131
25
7,836,628,360
805,098,657)
197,866,950)
36,854,440,925
Movement of the provision for impairment of direct credit facilities is as follows:
Balance at the beginning of the year
Additions during the year
Write off
Balance at the end of the year
Corporate
SYP
599,199,157
575,167,956
(
54,288) (
1,174,312,825
Balance – beginning of the year
Individually impaired loans
Collective impairment
Change during the year
Additions:
Write backs:
Collective Impairment
Write off
Balance – end of the year
2011
Individual
SYP
Total
SYP
205,899,500
805,098,657
226,893,238
802,061,194
4,369,448) (
4,423,736)
428,423,290
1,602,736,115
547,465,633
51,733,524
599,199,157
202,076,209
3,823,291
205,899,500
749,541,842
55,556,815
805,098,657
481,922,438
274,105,146
240,988,820
27,848,236
722,911,258
301,953,382
( 180,859,628) (
575,167,956
(
-
(
54,288) (
54,288) (
41,943,818) ( 222,803,446)
226,893,238
802,061,194
4,369,448) (
4,369,448) (
4,423,736)
4,423,736)
848,474,155
325,838,670
396,751,763
31,671,527
1,245,225,918
357,510,197
1,174,312,825
428,423,290
1,602,736,115
26
Corporate
SYP
Additions during the year
Balance – beginning of the year
Change during the year
Additions:
Write backs:
Collective Impairment
Balance – end of the year
(
(
2010
Individual
SYP
Total
SYP
437,614,349
161,584,808
599,199,157
101,606,431
104,293,069
205,899,500
539,220,780
265,877,877
805,098,657
373,377,462
64,236,887
437,614,349
100,459,815
1,146,616
101,606,431
473,837,277
65,383,503
539,220,780
263,333,712
11,827,815
101,616,394
2,676,675
364,950,106
14,504,490
89,245,541)
24,331,178)
161,584,808
104,293,069
547,465,633
51,733,524
202,076,209
3,823,291
749,541,842
55,556,815
599,199,157
205,899,500
805,098,657
Movement of suspend interest is as follows:
2011
SYP
Addition during the year
Write-backs during the year
(
(
(
89,245,541)
24,331,178)
265,877,877
2010
SYP
197,866,950
214,391,150
33,784,011) (
102,719,351
182,776,391
87,628,792)
378,474,089
197,866,950
Non-performing direct credit facilities amounted to SYP 4,919,213,755 as of December 31, 2011
representing 14.09% of total direct credit facilities balance (compared to SYP 2,606,795,326 as of
December 31, 2010 representing 6.89% of total direct credit facilities balance).
Non-performing direct credit facilities after deducting suspended interest amounted to SYP
4,540,739,666 as of December 31, 2011 representing 13.15% of total direct credit facilities balance after
deducting suspended interest (compared to SYP 2,408,928,376 as of December 31, 2010 representing
6.40% of total direct credit facilities balance after deducting suspended interest).
Non-performing indirect credit facilities amounted to SYP 128,222,554 as of December 31, 2011
(compared to SYP 139,524,931 as of December 31, 2010). The provision for these facilities amounted to
SYP 31,141,240 as of December 31, 2011 (compared to SYP 24,549,043 as of December 31, 2010)
which is recorded under miscellaneous provisions (Note 19).
There was no credit facilities granted to the governmental and public sector as of December 31, 2011
compared to SYP 4,215,000,000 as of December 31, 2010 representing 11.13% of total direct credit
facilities.
27
10.
AVAILABLE FOR SALE FINANCIAL ASSETS
2011
SYP
Unquoted financial assets
Shares
Quoted financial assets
Equity securities
December 31,
2010
SYP
8,051,780
7,314,030
74,970,000
84,830,000
83,021,780
92,144,030
Equity securities balance represents the Bank’s investment in United Insurance Company and
constitutes 5% of the company’s capital. These securities were revaluated at fair value according to the
stocks quote list published by Damascus Securities Exchange.
The Bank is willing to maintain these securities for the foreseeable future. Unrealized loss on available
for sale equity securities amounted to SYP 9,860,000 for the year ended December 31, 2011 (compared
to unrealized gain amounted to SYP 9,775,000 for the year ended December 31, 2010).
11.
HELD TO MATURITY FINANCIAL ASSETS
2011
SYP
Unquoted financial assets
Treasury bills - local government
December 31,
-
Quoted financial assets
Treasury bills – foreign government
Certificates of deposit – non-resident banks
99,443,363
529,158,069
1,114,400,000
454,960,350
937,000,000
1,643,558,069
1,491,403,713
Treasury bills analysis
2011
SYP
Fixed rate
Floating rate
2010
SYP
December 31,
2010
SYP
529,158,069
1,114,400,000
554,403,713
937,000,000
1,643,558,069
1,491,403,713
Treasury bills- local government are unquoted bills with fixed rate which are held to maturity and are
priced as follows:
2011
SYP
Nominal value
Discount
28
December 31,
(
2010
SYP
100,000,000
556,637)
99,443,363
Treasury bills- foreign government represent quoted bills with fixed rate. These bills are held to maturity
and are priced as follows:
2011
USD
Nominal value
Premium
Value in SYP based on the exchange rate at year end
December 31,
2010
USD
9,000,000
496,735
9,000,000
711,000
9,496,735
9,711,000
529,158,069
454,960,350
Treasury bills - foreign government were obtained on December 15, 2010 as follows:
Nominal value: USD 9,000,000
Purchase price: USD 9,711,000
Coupon rate: 5.15%
Yield to maturity: 2.61%
Maturity date: April 9, 2014
Certificates of deposit balance represents quoted financial assets with floating rate issued by a non-resident
bank and is held to maturity, which comprises the following as of December 31, 2011:
Maturity date
Nominal value (USD)
August 6, 2012
December 24, 2012
10,000,000
10,000,000
Interest rate
3m Libor + 110BP
3m Libor + 72BP
20,000,000
Value in SYP based on the
exchange rate at year end
1,114,400,000
Accrued interest receivable on held to maturity financial assets amounted to SYP 7,799,659 as of
December 31, 2011 (compared to SYP 6,189,891 as of December 31, 2010). This balance is classified
under other assets in the consolidated statement of financial position.
29
12.
PROPERTY AND EQUIPMENT
Buildings
SYP
Office
equipment
and furniture
SYP
2011
Vehicles
SYP
Computers’
equipment
SYP
Leasehold
improvement
SYP
Total
SYP
Historical Cost
Balance as of January 1, 2011
Additions
Disposal
Transfer
1,006,528,135
371,734,800
11,311,062
12,441,559
(
20,800) (
1,373,068,034
56,311,828
58,733,899
16,232,800
2,315,000)
-
267,774,298
9,444,867
836,060
417,610,145 2,122,381,277
22,909,491
72,339,779
(
2,335,800)
60,227,279 1,490,443,201
Balance as of December 31, 2011
2,390,907,231
72,651,699
278,055,225
500,746,915
440,467,387
3,682,828,457
Accumulated Depreciation
Additions, year’s charges
Disposal
(
(
139,634,538) ( 113,399,706) (
69,144,836) ( 68,159,549) (
2,288
-
26,029,241) ( 147,124,659) ( 214,358,686) (
14,499,109) ( 41,307,467) ( 103,642,369) (
603,958
-
640,546,830)
296,753,330)
606,246
(
208,779,374) ( 181,556,967) (
39,924,392) ( 188,432,126) ( 318,001,055) (
936,693,914)
Net Book Value
2,182,127,857
258,910,420
32,727,307
89,623,099
182,745,860
2,746,134,543
Advance payments on purchase of property and equipment
Additions
Transfers
Net property and equipment
632,026,127
747,036,675
( 1,373,068,034) (
5,994,768
2,188,122,625
56,311,828
56,311,828)
258,910,420
30
32,727,307
(
632,026,127
836,060
60,227,279
864,411,842
836,060) ( 60,227,279) ( 1,490,443,201)
89,623,099
182,745,860
5,994,768
2,752,129,311
Buildings
SYP
Office
equipment
and furniture
SYP
909,951,706
21,043,079
75,533,350
1,006,528,135
315,697,558
49,417,117
6,620,125
371,734,800
2010
Computers’
equipment
SYP
Vehicles
SYP
Leasehold
improvement
SYP
Total
SYP
Historical Cost
Additions
Transfer
45,088,199
13,645,700
58,733,899
233,958,114
33,754,184
62,000
267,774,298
359,703,693
26,325,347
31,581,105
417,610,145
1,864,399,270
144,185,427
113,796,580
2,122,381,277
Accumulated Depreciation
(
(
(
97,549,646) ( 76,504,006) ( 14,877,821) (
42,084,892) ( 36,895,700) ( 11,151,420) (
139,634,538) ( 113,399,706) ( 26,029,241) (
111,377,216) ( 148,036,021) (
35,747,443) ( 66,322,665) (
147,124,659) ( 214,358,686) (
866,893,597
120,649,639
448,344,710)
192,202,120)
640,546,830)
Net Book Value
258,335,094
32,704,658
203,251,459
1,481,834,447
Advance payments on purchase of property and equipment
Additions
Transfers
Net property and equipment
(
267,948,719
439,610,758
75,533,350) (
632,026,127
1,498,919,724
6,620,125
6,620,125)
258,335,094
31
32,704,658
(
62,000
62,000) (
120,649,639
31,581,105
31,581,105) (
203,251,459
267,948,719
477,873,988
113,796,580)
632,026,127
2,113,860,574
13.
INTANGIBLE ASSETS
Software
SYP
Historical cost
Key money
SYP
Total
SYP
Additions
Additions
45,515,866
10,279,157
55,795,023
8,958,115
146,053,241
146,053,241
-
191,569,107
10,279,157
201,848,264
8,958,115
64,753,138
146,053,241
210,806,379
Accumulated amortization
(
(
(
(
26,785,393)
6,586,284)
33,371,677)
6,305,385)
(
(
(
(
(
39,677,062) (
28,283,727)
7,302,662)
35,586,389)
7,302,662)
(
(
(
(
55,069,120)
13,888,946)
68,958,066)
13,608,047)
42,889,051) (
82,566,113)
Net book value
25,076,076
103,164,190
128,240,266
22,423,346
110,466,852
132,890,198
14.
OTHER ASSETS
2011
SYP
Accrued interest receivables
Banks and financial institutions
Direct credit facilities – corporate
Direct credit facilities – individual
Held to maturity –financial assets
Direct credit facilities – public sector
Prepaid expenses
Recoverable cash margins
Stamps and prints inventory
Advances to employees
VISA cards license
Amounts under collection
Other receivable (Note 35)
Provision for other receivable (Note 35)
Due from related parties (Note 38)
Due from ATM agent
Advances to service suppliers
Other debit balances
(
32
December 31,
2010
SYP
13,247,520
49,565,494
47,922,889
7,799,659
-
76,655,218
44,570,505
52,946,067
6,189,891
44,714,521
118,535,562
225,076,202
261,451,496
18,828,429
10,576,053
4,244,202
3,549,000
3,521,613
25,000,000
25,000,000)
3,095,388
46,717,790
230,281,415
14,733,546
9,616,315
4,853,937
3,549,000
9,789,140
5,679,323
77,443,495
33,083,822
84,102,206
470,519,533
698,208,401
15.
BLOCKED DEPOSIT WITH CENTRAL BANK OF SYRIA
According to section B of Article 12 of Law No. 28 for the year 2001, private sector banks are required
to maintain 10% of their capital as blocked deposit at Central Bank of Syria with no interest, and which
is refundable upon liquidation of the Bank.
This blocked deposit at Central Bank of Syria caption comprises the following:
2011
SYP
Balances in SYP
Balances in USD
December 31,
2010
SYP
246,073,850
286,912,107
189,241,950
168,833,543
532,985,957
358,075,493
Blocked deposit with Central Bank of Syria increased proportionately to the capital increase.
16.
BANKS'DEPOSITS
of 3 months or less)
33
Resident
banks
SYP
December 31, 2011
Non-resident
banks
SYP
573,375,774
256,741,547
830,117,321
650,000,000
-
650,000,000
1,223,375,774
256,741,547
Resident
banks
SYP
December 31, 2010
Non-resident
banks
SYP
679,348,001
319,041,124
998,389,125
-
155,467,000
155,467,000
679,348,001
474,508,124
1,153,856,125
Total
SYP
1,480,117,321
Total
SYP
17.
CUSTOMERS’ DEPOSITS
2011
SYP
Term deposits
Saving accounts
Total
December 31,
2010
SYP
38,547,576,815
20,663,053,901
2,518,032,415
67,611,336,620
32,508,707,732
3,440,431,426
61,728,663,131
103,560,475,778
Public sector’s deposits amounted to SYP 564,696,442 representing 0.91% of total deposits as of
December 31, 2011 (compared to SYP 867,197,457 representing 0.84% of total deposits as of
December 31, 2010).
Non- interest bearing deposits amounted to SYP 18,928,578,903 representing 30.66% of total deposits as
of December 31, 2011 (compared to SYP 33,198,630,424 representing 32.06% of total deposits as of
December 31, 2010).
18.
CASH MARGINS
2011
SYP
Cash margins against direct credit facilities
Cash margins against indirect credit facilities
34
December 31,
2010
SYP
1,372,063,148
1,570,621,470
1,126,618,515
1,594,698,482
2,942,684,618
2,721,316,997
19. MISCELLANEOUS PROVISIONS
Miscellaneous provisions movement is as follows:
December 31, 2011
Indirect credit facilities:
Provision for liabilities arising from
financial guarantees- customers
financial guarantees- banks
Provision for operational foreign
exchange position
Tax penalties provisions
Other provisions
December 31, 2010
Indirect credit facilities:
financial guarantees- customers
Provision for operational foreign
exchange position
Tax penalties provisions
Other provisions
Balance at
beginning
of year
SYP
24,549,043
696,300
34,132,000
348,512
59,725,855
64,293,572
2,822,956
348,512
67,465,040
Provided
during
the year
SYP
Utilized
during
the year
SYP
Write-backs
SYP
6,592,197
-
-
105,552,325
-
-
5,014,415
110,566,740
-
5,014,415
2,743,458
43,549,036
1,202,197
189,202,671
2,047,158
44,005,318 (
853,685
159,050,683 (
-
34,588,282)
34,588,282)
Difference in
exchange
SYP
-
Balance at
year end
SYP
31,141,240
(
3,101,174) (
36,643,355)
-
24,549,043
1,499,111
34,132,000
35,631,111 (
(
3,101,174) (
3,625,767)
40,269,122)
-
696,300
34,132,000
348,512
59,725,855
The provision for operational foreign exchange position was calculated based on article No. 7 of circular No. 362/MN/B1 issued by Monetary and Credit
Council on February 4, 2008. According to this circular, banks operating in Syria are required to establish a provision for exchange rate fluctuations
equal to 5% of average operational exchange rates position during the month.
Provision for liabilities arising from financial guarantees- banks represents a provision against two letters of guarantees with total amount of
SYP 417,807,121 as of December 31, 2011. These guarantees are granted to local customer and are guaranteed by foreign bank.
During the year, stamps and legal fees have been reviewed. Tax penalties have been imposed by the related authorities amounted to SYP 43,549,036 but
the Bank submitted an objection. The final decision was not issued by the time the consolidated financial statements were approved.
Financial authorities reviewed salaries and wages’ taxes during 2010. Tax and penalties were settled during 2011 by paying the amount of
SYP 34,588,282.
35
20.
INCOME TAX
A-
Provision for income tax
2011
SYP
Balance at beginning of the year
Income tax paid during the year
Income tax due
Net adjustments of prior year income tax
(
(
Balance at end of the year
Net adjustments of prior year income tax comprises the following:
Write- back of provisions for income tax for the year 2010
Additions on provisions for income tax for the
years 2004 & 2005
339,075,198
229,911,824) (
206,472,332
85,151,057)
343,247,415
343,247,415)
339,075,198
-
230,484,649
339,075,198
2011
2010
SYP
SYP
109,163,374
(
2010
SYP
-
24,012,317)
-
85,151,057
-
During the year, new forms for income tax declaration was issued by Ministry of Finance for banks, in
which it stated that the addition on provision for credit losses calculated in accordance with circular No.
(597/MN/B4) dated December 9, 2009 and amended by circular No. (650/MN/B4) dated April 14, 2010, is
a tax acceptable expense and it can be deducted from taxable income. The difference between the
calculated income tax provision as of December 31, 2010 and the paid amounts, was recorded in the
consolidated income statement under write-back of provision for income tax.
During 2011, the Bank had a tax review for the years 2004 and 2005. A preliminary decision was issued
where the Bank was levied SYP 24,012,317 as additional tax for the two years. The Bank submitted an
objection. Matters are still pending by the time the consolidated financial statements were approved.
B- Deferred tax assets
Movement during the year
36
2011
SYP
2010
SYP
8,506,232
7,855,653
5,630,364
2,875,868
16,361,885
8,506,232
C- Deferred tax liabilities
Deferred tax liabilities at year-end resulted from (loss)/ gain from revaluation of available for sale
financial assets that is booked under cumulative changes in fair value in equity. Deferred tax liability is
calculated by multiplying the cumulative change in fair value of available for sale financial assets by
25% (tax rate) as the following:
2011
SYP
Changes during the year
(
2010
SYP
10,582,500
2,465,000)
10,582,500
8,117,500
10,582,500
Deferred tax assets and liabilities were not offset as deferred tax assets relate to the subsidiary’s
operations while deferred tax liabilities relate to the Bank’s activities.
D- Reconciliation between accounting and taxable profits
2011
2010
SYP
SYP
Profit before tax
772,970,075
Additions:
Depreciation of buildings (Note 12)
69,144,836
Amortization of key money (Note 13)
7,302,662
Provision for performing loans
313,781,198
Provision for non-performing loans exceeding the percentages
set in circular No. 597/MN/B4 and its amendments
78,662,229
Addition to provision for credit losses
Addition to provision for foreign exchange
2,047,158
Tax penalties
39,006,464
Loss / (gain) from investment in subsidiaries
25,254,798
Deductions:
Unrealized gain of financial assets held-for-trading
(
309,255)
Gain on available for sale financial assets
(
5,525,000)
Unrealized gain on structural position
(
384,504,453)
Write-back of suspended interest for 2009 and before
(
6,999,916)
Interest income of treasury bills
(
1,404,493)
Write- back of provision for credit losses from 2009
(
83,536,976)
Write-back of foreign exchange provision
Write-back of provision for credit losses
-
1,004,002,436
42,084,892
7,302,662
-
(
(
(
(
(
(
647,093,312
1,499,111
34,132,000
5,765,788)
9,632,454)
4,250,000)
33,828,417)
95,147,599
3,625,767)
417,858,790)
Taxable income
825,889,327
1,356,300,796
Income tax (25% of taxable income)
206,472,332
339,075,198
Income tax revenue related to subsidiary
(
7,855,653) (
198,616,679
37
2,875,868)
336,199,330
21.
OTHER LIABILITIES
2011
SYP
Accrued interest payables – customers’ deposits
Accrued interest payables – cash margin accounts
Accrued interest payables – banks’ deposits
Certified and payable checks
Transfers and amounts under payable
Accrued expenses
Contributions payable to tax and social security
Advances from customers
Unearned commission income
Top management and board of directors accrued
expenses (Note 38)
Dividends payable (Note 38)
Due to related parties (Note 38)
Other credit balances
22.
December 31,
2010
SYP
161,139,608
32,540,688
1,578,082
671,582,133
580,568,899
202,367,833
172,156,036
69,375,795
59,701,723
129,310,527
23,852,711
985,683,597
175,506,927
99,329,093
149,569,342
126,003,460
58,789,746
52,672,101
1,621,100
36,587,134
43,847,697
1,676,690
18,716,886
30,353,928
2,041,891,132
1,842,640,604
CAPITAL
The Bank’s authorized, issued and fully paid capital is SYP 5,000,000,000 which comprises 10,000,000
shares with SYP 500 par value of each.
The Bank’s capital shares are split into two categories:
Category A: This type of shares should only be owned by Syrian Citizens or Syrian companies and
their value should only be paid in Syrian Pounds except for Syrian non-residents who should pay in
foreign currency based on prevailing exchange rates in neighboring markets.
Category B: This type of shares can be owned by foreign individuals or companies according to Prime
Minister’s decision and their value should be paid in foreign currency based on prevailing exchange
rates in neighboring markets.
Banque Bemo SAL (Lebanon) shares represent 22% of the Bank’s capital and are from category B.
Banque Saudi Fransi (Saudi) shares represent 27% of the Bank’s capital and are from category B.
Banque Saudi Fransi board of directors decided on November 26, 2011 to sell their stake at Banque
Bemo Saudi Fransi s.a. and to quit from its board of directors. This decision was made according to their
estimate for the risks in Syria as it was mentioned in their website. No shares have been sold up to the
date of approval on these consolidated financial statements.
On May 24, 2009 the shareholder’s general assembly approved the increase in capital by issuing
1,000,000 shares in total amount of SYP 500,000,000 with SYP 500 par value each. The approval on
amending the Bank’s bylaws to include this increase was obtained from Monetary and Credit Council on
August 17, 2009.
38
On January 4, 2010, law number 3 was issued which amend some of the provisions included in law No.
28 for the year 2001 and Circular No. 35 for the year 2005 and required increasing the minimum capital
for all banks operating in Syria to SYP 10 Billion. All licensed banks were granted a grace period of
three years to adhere to the new law, this period has been extended to four years according to Law No.
17 for the year 2011.
On May 11, 2010 the shareholder’s general assembly approved the increase in capital as follows:
1. To allocate a portion of retained earnings amounting to SYP 455,000,000 by issuing 910,000
new shares with a par value of SYP 500 each. The final approval of Syrian Commission on
Financial Markets and Securities (No. 115) was obtained on November 29, 2010 to cover this
increase with an allocation of retained earnings into capital.
2. The issuance of 1,590,000 new ordinary shares with a total value of SYP 795,000,000 (par value
of SYP 500 each). Syrian Commission on Financial Markets & Securities approved this increase
by issuing circular No. 33 dated February 21, 2011.
The increase dated May 24, 2009 and May 11, 2010 were issued to shareholders and the Bank finished
second and final part of this increase on July 18, 2011.
23.
LEGAL AND SPECIAL RESERVES
According to article 197 of corporate law No.29 dated February 14, 2011, legal reserve is set up at 10% of
annual net income and up to 25% of capital.
Special reserve is set up at 10% of annual net income and up to 100% of capital in accordance with
Monetary and Credit Council Law No. 23, article No. 97 for the year 2002.
Annual net income was defined in accordance with article 200 of corporate law No.29 dated February 14,
2011, to be equal to the difference between realized revenues and the total of expenses and depreciation
before income tax.
Reference to above and to the circulars issued by Central Bank of Syria No.(369/100/3) dated January
20, 2009 and No. (952/100/1) dated February 12, 2009, legal and special reserves were calculated as
follows:
2011
SYP
Profit before income tax
(Deduct) / Add:
Net unrealized exchange gain on structural position
Non-controlling interests of subsidiary’s loss /
(profit) before income tax
Legal / Special reserve 10%
39
December 31,
772,970,075
(
2010
SYP
1,004,002,436
384,504,453) (
33,828,417)
6,397,882
1,460,666)
(
394,863,504
968,713,353
39,486,350
96,871,335
24.
CUMULATIVE CHANGES IN FAIR VALUE OF AVAILABLE FOR SALE FINANCIAL ASSETS
2011
SYP
Unrealized (loss)/ gain during the year (Note 10)
Changes in deferred tax liabilities (Note 20-C)
25.
(
2010
SYP
31,747,500
9,860,000)
2,465,000 (
32,555,000
9,775,000
10,582,500)
24,352,500
31,747,500
RETAINED EARNINGS AVAILABLE FOR DISTRIBUTION AND ACCUMULATED LOSSES
According to the regulations of Central Bank of Syria and Monetary and Credit Council No. 362 for
year 2007 and No. (952/100/1) dated February 12, 2009, unrealized retained earnings / (accumulated
losses) on structural position are segregated from retained earnings.
Total retained earnings available for distribution as of December 31, 2011 amounted to
SYP 593,430,573 (compared to SYP 405,610,235 as of December 31, 2010).
No decision was made to distribute profit for the year 2011.
26.
INTEREST INCOME
2011
2010
SYP
SYP
Direct credit facilities- corporate
Overdraft
Loans and advances
Discounted bills
Direct credit facilities - individual
Governmental and public sector
Balances and deposits with banks
Loans and advances
27.
827,469,400
874,024,501
492,679,388
1,025,235,618
90,105,000
209,427,244
27,368,506
692,730,461
664,464,137
523,581,593
1,037,227,292
44,714,521
248,415,040
10,992,580
3,604,591
3,546,309,657
3,225,730,215
INTEREST EXPENSE
2011
2010
SYP
SYP
Banks’ deposits
Customers’ deposits
Current accounts
Saving accounts
Term deposits
Cash margins
40
3,907,033
1,656,817
132,059,374
128,836,890
796,105,483
42,354,864
231,891,513
94,738,743
789,811,137
32,432,754
1,103,263,644
1,150,530,964
28.
FEES AND COMMISSIONS INCOME
2011
2010
SYP
SYP
Commissions on direct credit facilities
Commissions on indirect credit facilities
Commissions on transfers and banking services
Miscellaneous commissions income
29.
617,798,800
563,193,580
2011
2010
SYP
SYP
Commission paid to banks
Commission paid on transfers and banking services
Miscellaneous commissions expenses
12,197,687
14,899,532
305,853
10,530,188
6,273,246
985,219
27,403,072
17,788,653
(LOSS) / GAIN FROM HELD-FOR-TRADING FINANCIAL ASSETS
2011
2010
SYP
SYP
Dividends on shares
Dividends on bonds
Unrealized revaluation gain- Bonds
Unrealized revaluation (loss)/ gain- Shares
Loss on disposal of shares
31.
38,704,515
292,751,212
209,510,998
22,226,855
FEES AND COMMISSIONS EXPENSES
30.
27,131,799
326,093,890
251,349,358
13,223,753
(
(
417,650
1,832,298
309,255
11,386,079)
3,839,741)
9,632,454
2,070,613
-
(
12,666,617)
11,703,067
GAIN ON AVAILABLE FOR SALE FINANCIAL ASSETS
2011
2010
SYP
SYP
Dividend income from United Insurance Company (Note 38)
Dividend income from other Companies
Gain on sale of available for sale financial assets
41
5,525,000
334,500
-
4,250,000
120,000
5,859,500
4,370,000
32. SALARIES AND RELATED CHARGES
Salaries and related charges
Medical expenses
Top management salaries and compensation (Note 38)
Bank’s portion of Social Security
Training expenses
33. PROVISION FOR IMPAIRMENT OF CREDIT FACILITIES
2011
2010
SYP
SYP
768,097,795
15,921,021
101,896,181
107,111,708
15,378,674
1,008,405,379
651,137,289
14,233,997
60,310,469
93,802,519
19,128,616
838,612,890
2011
2010
SYP
SYP
Performing direct credit facilities (Note 9)
Non-performing direct credit facilities (Note 9)
Non-performing indirect credit facilities (Note 19)
301,953,382 (
9,826,688)
500,107,812
275,704,565
112,144,522 (
36,643,355)
914,205,716
229,234,522
According to the current economic situation, the Bank performed a stress test on its credit facilities
portfolio and, consequently, Management decided to calculate a collective provision against these
facilities in the amount of SYP 246,396,566 which exceeded the percentages set by circular No.
(597/MN/B4) issued by Monetary and Credit Council and its amendments in order to reduce the
increasing credit risk.
34. OTHER OPERATING EXPENSES
Rent
Legal Fees
Advertising
Telephone and communication expenses
Travel and transportation
Maintenance
Utilities
Professional fees
Board of Directors'compensation and bonuses (Note 38)
Credit cards expenses
Stationery and office expenses
Insurance
Administrative fees (Note 38)
Cleaning and security expenses
Network and computer installation
Capital increase expenses
Donations
Other expenses
42
2011
2010
SYP
SYP
126,350,894
77,391,356
64,765,684
51,973,075
45,108,115
40,384,713
34,784,332
32,105,312
27,801,503
21,595,156
21,268,439
17,257,332
16,718,750
13,882,408
13,189,646
10,430,020
84,000
30,507,295
645,598,030
126,930,514
46,889,724
89,337,441
34,831,852
48,027,700
21,881,675
37,392,399
35,530,325
13,591,547
18,114,026
21,716,532
16,274,477
13,968,000
12,944,899
9,407,799
396,150
21,065,969
568,301,029
35.
OTHER PROVISIONS
During 2011, the Bank reported a robbery during cash transfer between branches in its ordinary course of
business. The Bank recorded a full provision for the loss taking into consideration the preliminary results
of investigation and the expected future cash inflows from the insurance company. This provision was
recorded in the consolidated income statement under other provisions.
36.
BASIC AND DILUTED EARNINGS PER SHARE
The basic and diluted earnings per share on profits available for equity holders of the parent were
calculated as follows:
2011
2010
Net profit for the year attributable to equity holders of
the parent (SYP)
Weighted average number of ordinary shares outstanding
during the year
Basic and diluted earnings per share (SYP)
663,912,236
665,613,886
8,524,055
7,410,000
77.89
89,83
The weighted average number of shares was calculated as follows:
Period
December 31, 2009
November 29, 2010*
July 27, 2011
Number of shares
Share
6,500,000
910,000
2,590,000
Number of days
Day
365
365
157
Weighted average number of shares
For the year ended December 31,
2011
2010
Share
Share
6,500,000
910,000
1,114,055
6,500,000
910,000
-
8,524,055
7,410,000
* The weighted average number of shares as of December 31, 2010 was modified to reflect the number
of free shares in compliance with the International Accounting Standard IAS 33, which requires
amending the number of shares retrospectively from the earliest comparative year when the number of
shares increases due to capitalization or stock split.
Basic and diluted earnings per share are identical due to the absence of instruments issued by the Bank
that would impact earnings per share when converted.
37.
CASH AND CASH EQUIVALENT
2011
SYP
Cash and balances with Central Bank of
Syria (except for cash compulsory reserve
and blocked deposit)
Add: Balances with banks (with original maturity
Less: Banks'deposits (with original maturity
December 31,
2010
SYP
10,432,055,275
25,754,113,988
22,026,362,782
9,452,615,093
( 1,480,117,321) ( 1,153,856,125)
30,978,300,736
43
34,052,872,956
38.
TRANSACTIONS WITH RELATED PARTIES
In the ordinary course of business, the Bank enters into transactions with top management, major
shareholders and other related parties within the allowed commercial engagement limits. Credit facilities
granted to related parties are considered as performing except for the direct credit facilities of SYP
220,624,105 that was granted to a related party and was classified as doubtful debt as of December 31,
2011 (compared to SYP 214,035,159 as of December 31, 2010). No provision has been taken against
these facilities as it is fully guaranteed with accepted bank guarantees.
The consolidated financial statements include the financial statements of Bemo Saudi Fransi Finance
S.A. The Bank’s share in the subsidiary’s capital is shown below:
Contribution
Percentage
%
Bemo Saudi Fransi Finance S.A.
74.67
44
2011
SYP
December 31,
2010
SYP
224,000,000
224,000,000
224,000,000
224,000,000
A- Consolidated statement of financial position items
Financial position items
Debit balances
Current accounts
Term deposits
Credit facilities balances
Debit balances (Note 14)
Credit balances
Current accounts
Term deposits
Accrued expenses (Note 21)
Off-Balance sheet items
Inward guarantees
Issued letters of guarantees
Inward letters of guarantees
Inward LCs
Issued LCs
Acceptances
Checks under collection
Import bills
Export bills
December 31, 2011
United
Insurance
Company
SYP
Bank Saudi
Fransi
SYP
Bank Bemo
SYP
1,864,887,878
3,176,392,548
-
3,146,123,172
6,686,400,000
3,095,388
32,440
-
-
227,815,681
-
5,041,280,426
9,835,618,560
32,440
-
227,815,681
-
129,019,686
-
77,055,191
25,000,000
-
22,295,598
26,586,611
30,376,503
-
1,621,100
-
232,661,488
25,000,000
1,621,100
52,672,101
-
129,019,686
102,055,191
22,295,598
56,963,114
-
1,621,100
311,954,689
48,829,113
88,413,307
6,096,312
947,989
( 440,263,421) ( 11,038,468)
( 405,090,879) (
9,753,860)
65,956 (
( 45,817,234) ( 603,883,005)
4,362,970
19,578,846
Top
management
SYP
44,610)
-
45
-
Board of
directors
SYP
Related
parties
SYP
Shareholders
SYP
Total
SYP
224,092,087
-
-
5,011,043,490
9,862,792,548
451,907,768
3,095,388
224,092,087
-
15,328,839,194
( 335,000,000) ( 142,000,000)
24,472,330
( 346,380,000)
-
-
( 477,000,000)
161,714,750
( 346,380,000)
7,044,301
( 451,301,889)
( 414,844,739)
21,346
( 649,700,239)
23,941,816
Financial position items
Debit balances
Current accounts
Term deposits
Credit facilities
Debit balances (Note 14)
Credit balances
Current accounts
Term deposits
Due to related parties
Accrued expenses (Note 21)
Off-Balance sheet items
Inward guarantees
Issued letters of guarantees
Inward letters of guarantees
Inward LCs
Issued LCs
Acceptances
Checks under collection
Import bills
Export bills
Bank Saudi
Fransi
SYP
Bank Bemo
SYP
December 31, 2010
United
Insurance
Company
SYP
Top
management
SYP
Board of
directors
SYP
Related
parties
SYP
Shareholders
SYP
Total
SYP
166,837,183
132,519
53,409,092
327,950,000
4,754,123
-
-
263,517,523
792,681
221,476,447
-
-
220,246,275
327,950,000
484,993,970
5,679,323
166,969,702
386,113,215
-
-
264,310,204
221,476,447
-
1,038,869,568
18,716,886
-
44,758,239
80,730,000
-
56,567,918
32,292,061
-
24,509,657
3,439,847
19,338,040
10,868,493
-
1,676,690
-
115,634,497
113,022,061
1,676,690
18,716,886
43,847,697
18,716,886
125,488,239
88,859,979
24,509,657
22,777,887
10,868,493
1,676,690
292,897,831
90,420,421
26,225,587
( 294,785,389)
( 511,194,946)
( 38,868,946)
4,061,099
75,420,398
3,607,450
(
1,394,201)
( 11,247,570)
( 51,917,376) (
(1,264,985,568)
19,866,228
97,073)
-
46
-
(
335,000,000) ( 232,275,000)
22,767,712
( 428,350,000)
-
-
(
(
(
(
(
(
567,275,000)
188,608,531
428,350,000)
29,833,037
296,179,590)
522,442,516)
52,014,449)
1,303,854,514)
23,927,327
B- Consolidated statement of comprehensive income items
Bank Saudi
Fransi
SYP
Interest income
Interest expense
Insurance expense
Salaries and bonuses
Dividends (Note 31)
Top
management
SYP
Board of
directors
SYP
Related
parties
SYP
3,085,004
5,068,802
13,203
14,942,238
22,266,622
(
825,033) ( 332,952)
(
28,405) (
2,420)
(19,521,309)
( 16,718,750)
(101,896,181) ( 27,801,503)
5,525,000
-
Bank Saudi
Fransi
SYP
Interest income
Interest expense
Insurance expense
Salaries and bonuses
Dividends (Note 31)
Bank Bemo
SYP
Year ended December 31, 2011
United
Insurance
Company
SYP
Bank Bemo
SYP
Shareholders
SYP
Total
SYP
-
45,375,869
( 1,188,810)
( 19,521,309)
( 16,718,750)
(129,697,684)
5,525,000
Shareholders
SYP
Total
SYP
United
Insurance
Company
SYP
Top
management
SYP
Board of
directors
SYP
1,022,792
952,192
58,957
21,812,981
( 1,179,681) ( 3,718,325)
(
114,104)
(18,931,636)
( 13,968,000)
( 60,310,469) ( 13,591,547)
4,250,000
-
47
Related
parties
SYP
29,132,117
-
-
(
(
(
(
52,979,039
5,012,110)
18,931,636)
13,968,000)
73,902,016)
4,250,000
C. Executive management's benefits
2011
2010
SYP
SYP
Management compensations and bonuses (Note 32)
Board of Directors remunerations (Note 34)
101,896,181
27,801,503
60,310,469
13,591,547
129,697,684
73,902,016
In compliance with circular No (500/MN/B4) dated May 10, 2009, the Bank is working on closing out
all credit facilities granted to related parties within a maximum period specified as the date of maturity.
Interest rate charged on credit facilities granted to related parties is in the range of 7.25% to 12%.
Interest expense rate on current accounts and deposits for related parties is in the range of 0.5% to 6.5%.
48
39.
FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES
(a) Fair value of financial assets and liabilities which are not shown in the consolidated financial statements at fair value
Financial assets:
Cash and balances with Central Bank of Syria
Balances with banks
Deposits with banks
Financial liabilities:
Banks’ deposits
Cash margins
Carrying value
SYP
December 31, 2011
Fair value
SYP
Difference
SYP
13,640,099,834 13,640,099,834
22,026,362,782 22,026,362,782
1,020,468,642 1,022,926,268
2,457,626
32,935,436,131 31,986,049,294 ( 949,386,837)
1,643,558,069 1,652,864,150
9,306,081
532,985,957
532,985,957
1,480,117,321 1,480,117,321
61,728,663,131 61,726,453,214
2,942,684,618 2,979,216,663 (
49
2,209,917
36,532,045)
Carrying value
SYP
36,188,623,766
9,452,615,093
27,023,108,164
36,854,440,925
1,491,403,713
358,075,493
December 31, 2010
Fair value
SYP
Difference
SYP
36,188,623,766
9,452,615,093
27,023,108,164
31,418,213,110 ( 5,436,227,815)
1,421,944,355 (
69,459,358)
358,075,493
-
1,153,856,125
1,153,856,125
103,560,475,778 103,462,677,949
2,721,316,997
2,711,003,491
97,797,829
10,313,506
(b) Fair value measurements for financial assets recognized at fair value in the consolidated statement
of financial position (according to IFRS 7)
December 31, 2011
Level 2
Level 3
SYP
SYP
Level 1
SYP
Held-for-trading financial assets
83,021,780
392,881,812
-
-
392,881,812
83,021,780
83,021,780
392,881,812
-
475,903,592
December 31, 2010
Level 2
Level 3
SYP
SYP
Level 1
SYP
Total
SYP
Total
SYP
92,144,030
347,591,995
-
-
347,591,995
92,144,030
92,144,030
347,591,995
-
439,736,025
Evaluation and assumption techniques used for determining fair value:
Fair values of financial assets and liabilities are determined using the following hierarchy:
Level one: fair value measurements are those derived from quoted prices (unadjusted) in active markets
for identical assets or liabilities.
Level two: fair value measurements are those derived from inputs other than quoted prices included in
level one, that are observable, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level three: fair value measurements are those derived from valuation techniques that include inputs that
are not based on observable market data (unobservable inputs).
Financial assets whose fair value approximates its book value:
They represent monetary financial assets and liabilities with maturity less than one year and with a book
value that approximates fair value.
Financial assets with fixed interest rate:
Fair value of financial assets and liabilities carried at amortized cost with fixed interest rate is calculated
by conducting a comparison between cash flows generated by the financial instrument at issuance
(discounted using market interest rates) and the current market prices for comparable financial
instruments.
50
40.
RISK MANAGEMENT
Overview of risk management
The activities of Banque Bemo Saudi Fransi S.A contains a number of risks, that is why risk management
plays crucial role in maintaining the strength of the bank and its continuing profitability.
The process of risk management consists of recognizing, measuring, monitoring financial and nonfinancial risks that may adversely affect the Bank’s performance and reputation and ensuring an efficient
distribution of capital to achieve optimal rates of return.
The Bank’s risks mainly fall under the following types:
- Credit risk
- Market risk
- Liquidity risk
- Operational Risk
- Risks of compliance with the requirements of regulatory authorities
General strategy for risk management
The Bank’s risk management policies are set according to the size and complexity of its activities and
instructions of Syria monetary authorities, Syrian laws and applicable international banking standards.
The board of directors is responsible for guiding and approving risk management strategies which are then
monitored by independent risk management department,
Risk management policies in the Bank are subject to continuous improvement to keep pace with all
developments and growth in the Bank'
s activities, and for the expansion of its services; the philosophy of
risk management in the Bank is based on the knowledge, experience and management'
s ability to supervise
and judge, and the existence of clear manual of authorities defined by the Board of Directors.
Organizational structure and the role of parties responsible of risk management
Board of directors
Board of directors is responsible for risk management and approval of strategies and policies in the Bank.
In addition to board of directors, there are committees responsible for managing and monitoring risks.
Risk management
Risk management is responsible for proper execution and control of risks and it ensures the compatibility
of existing risks with adopted policies. Risk management contains the following departments:
- Credit and market risks department
This department is responsible of reviewing the credit facilities files which are in the process of
obtaining credit facilities from the Bank as well as other financial institutions in which the Bank is
willing to maintain financial interest whether in the form of current account or investment account. The
department submits its recommendation to the appropriate management level. Moreover, the department
conducts a periodic review on existing files at least once per year.
- Credit management department
This department is responsible of managing credit files to ensure its conformity with the approval terms
granted from the appropriate managerial level by confirming the existence and legitimacy of the required
documents and guarantees and compliance with the corresponding credit procedures and policies of the
Bank. The department activates the credit facilities granted to customer and record the inward guarantees
on the banking system and save the documents in secure location.
51
- Retail credit risk department
This department is responsible for the credit facilities files of individual and retail facilities aiming to
obtain credit facilities from the Bank. The department will submit its recommendation to the appropriate
management level.
- Credit monitoring department
This department monitors credit facilities, follow-up on payments after approval, assures timely
settlement of customers’ obligations according to their amounts and maturities. It prepares and sends
reports to relevant department that include information on due and unpaid amounts, excesses over
defined limits. In addition, the department assigns credit ratings to existing customers and calculates
provisions for impaired credit facilities. The department also prepares reports regarding risk management
especially credit risk management and submits them to senior management and Central bank of Syria.
- Operational risk department
This department monitors overall activities and departments of the Bank where operational risk may
arise due to human or automation errors from within or outside the Bank. It monitors these risks by
measuring them to ensure they are either non-existed or still in the minimum possible level acceptable.
In additions, it takes all possible decisions to mitigate these risks in which it include according to each
case, transfer the risk to third parties or insurance companies.
Treasury
Responsible for the assets and liabilities management and financial structure of the Bank, basically it is
responsible of liquidity and financing risks.
Internal audit department
This department audits the risk management process on regular basis. It reviews the compatibility of the
procedures and policies set by the Bank. The audit results are discussed with the management, reports and
suggestions are submitted to the Audit Committee.
Risk management and reporting system
The Bank’s risks are measured in a way that reflects the expected losses, which may arise in normal
conditions, and the unexpected losses based on estimates of total actual losses using statistical methods.
These methods are based on the probabilities of previous experiences, and are adjusted to reflect the
economic conditions. It also examines the worst-case scenario that may arise from exceptional
circumstances.
Managing and controlling risks are based on approved limits that reflect the Bank strategy, limits and
levels of acceptable risks. The Bank measures total risk-taking capability and compares it to overall risks
of all types.
Information is collected from all business lines for the purposes of analyzing, monitoring and determining
risks at early stage as it submits reports to the board of directors, risk management department and heads
of departments that contain total credit and liquidity risks.
Detailed analysis is prepared on a monthly basis according to business lines and geographical sectors;
Management reviews provision for impairment of credit losses quarterly. Board of directors receives a
comprehensive report on risks on a quarterly basis to use it in assessing the overall risks of the Bank.
Detailed risk reports are prepared and distributed to all departments to ensure that all necessary
information is up to date and available to all levels of the Bank.
52
Risk management procedures and mitigation methods
A- Credit Risk:
Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause
the other party to incur a financial loss. There are three main types of credit risk: the risk of counter-party
default, settlement risk, and country risk.
Key factors for effectively managing credit risk are as follows:
- locating a suitable environment for credit risk management,
- Having a clear and proper framework of approvals and permissions,
- Maintaining an appropriate credit administration, and providing appropriate mechanisms for
measurement and control and
- Ensuring adequate controls are in place over the procedures of credit risk management.
In order to achieve the above, The Bank attempts to develop a clear credit policy which includes
maximum credit exposure granted (for individuals or entities) and for each sector and geographical area.
The Bank attempts to control credit risk by monitoring credit exposures, limiting transactions with specific
counter-parties, and continually assessing the creditworthiness of counter-parties.
Basic hypotheses of stress testing for credit risks
Bank uses several hypotheses for stress testing of credit portfolio that generally covers the expected credit
risks and the increase in provision for impairment of credit losses required to cover these risks.
These hypotheses also cover the changes in non-performing loans in various scenarios according to their
expected credit risks. In addition, it examines the deterioration in credit quality of credit exposures per
economic sector and the decrease in market value of real estate mortgage of non-performing loans.
Risk Management procedure comprises the following:
1- Defining credit risk limits and concentrations:
The Bank’s credit risk policy set up maximum exposure that can be assigned to individual customer or
group of customers, in accordance with the limits specified in the decree No. 395 issued by Monetary and
Credit Council. In addition, it includes limits by economic segments as well as specifying credit limits
that can approved by each level of management.
Credit rating of customers
The Bank reviews the portfolio of granted loans on regular basis and classifies it in accordance with
Monetary and Credit Council circular No. 597/MN/ B4 dated December 9, 2009 amended by circular No.
650/MN/B4 dated April 14, 2010, which sets up the criteria for classification of facilities and calculation
of required provisions.
The following are the loan classification categories in accordance with Monetary and Credit Council
instructions:
2-1. performing loans
- Low risk loans
- Normal risk loans
- Watch list (special mention) loans
2-2. Non-performing loans
- Substandard loans
- Doubtful loans
- Bad loans
53
Basis of credit facilities classification
1.
2.
3.
4.
5.
6.
7.
Commitment of debtors with credit facilities terms;
Movements of overdraft account;
Customer commitment for timely payment;
Updated financial position of the customer;
Cash inflows of the financed projects;
Classification of customer by recognized rating companies, if available; and
Customer status in terms of payment with other financial institutions.
2- Credit risk mitigation methods
The Bank employs a range of policies and practices to mitigate credit risk. The most traditional of these
are:
- Guarantees requested against granted facilities. The Bank implements guidelines on the acceptability
of specific classes of collateral based on their liquidity and percentage of coverage of the underlying
facility. Guarantees monitored and evaluated on an ongoing basis.
- Credit Committees assigned to extend or approve credit facilities based on the size of the client’s
portfolio, maturity of facilities and client’s rating.
Portfolio diversification is fundamental factor to mitigate credit risks. The Bank’s annual plan includes a
targeted distribution of credit and investment among different sectors and markets with a special focus on
promising sectors.
The Bank uses several policies to mitigate credit risk such as monitoring credit concentrations according to
economic and geographical sectors and according to guarantees in order to take proper preventive and
corrective actions when needed.
In addition, the Bank attempts, through credit departments and credit committees, to obtain proper
guarantees sufficient to cover credit risk, these guarantees are determined for each customer according to
the activities and the type and amount of granted facilities.
Real estate are revaluated by an expert if the granted facilities were less than 25 million Syrian Pounds,
and by two experts if the facilities were equal to or exceeds 25 million Syrian Pounds. For the purpose of
calculating provision for impairment of credit losses, 25% of real estate and stocks and 50% of vehicles,
machines and equipments that is pledged as securities in favor of the bank are discounted.
Collaterals and credit enhancements
The Bank uses several practices to mitigate credit risk such as obtaining collaterals in accordance with
applicable standards.
The major types of collaterals are as follows:
• For commercial loans: real estate, inventory and cash collaterals.
• For individuals: real estates, apartments, vehicles, salaries and cash collaterals.
Management monitors the market value of the collateral, additional guarantees may be granted according
to contract’s terms. The market value of these guarantees is reviewed during the study of adequacy of the
provision for impairment of credit losses.
Assessment of loans impairment granted to individual
The main indicators for loan impairment are:
- When the principal or interest is due for a period more than 90 days;
- When the customer faces financial or cash flow difficulties; and
- Disruption of contract’s terms.
54
Individual provision on non-performing loans
The Bank sets the appropriate provision for all loans and facilities individually in accordance with
circulars No (597/MN/B4) dated December 9, 2009 and No. (650/MN/B4) dated April 14, 2010 issued by
Monetary and Credit Council, taking into consideration the following indicators:
•
Delays in the completion of the project;
•
Customer’s ability to improve his position when facing financial difficulties;
•
Expected return in case of bankruptcy;
•
Availability of other financial sources and the expected realizable value of the guarantees; and
•
Period of expected cash inflows.
Credit losses are reviewed at each consolidated financial position’s date or whenever the need arises.
Collective provision on performing loans
The Bank evaluates the collective provision for impairment of credit losses for loans that are not
significant individually, or in case there is no objective evidence of the impairment individually. The Bank
reviews this provision at each consolidated financial position’s date.
The Bank takes into account upon overall assessment, the possible impairment in portfolio even where
there is no objective evidence.
Impairment of credit losses is assessed using the following factors:
Date of losses, current economic situation, current levels of doubtful debts, the delay between the date
when losses occurred and the date the Management decided to record a provision, and the expected
payments. Management is responsible to determine this period which may extend to one year.
Credit management department reviews the impairment of credit losses to ensure its compliance with the
Bank’s general policies.
Provision for financial commitments and letters of credit are evaluated in a similar method of evaluating
loans.
Credit analysis, control and follow-up
The Bank improves the methods used in credit analysis and ensures objectivity and integrity in decisionmaking, risk assessment and review of credit facilities. The credit risk framework includes establishing an
authorization structure, imposing limits for the approval and renewal of credit facilities and setting policies
to determine the degree of risk. The process of managing credit is handled as a separate function to ensure
proper implementation of credit operations, effective control over maturities and the accurate assessment
of securities.
55
Quantitative disclosures of credit risk
1. Exposure to credit risk (after provision for impairment and before guarantees and other risk mitigation
factors)
2011
SYP
Statement of financial position items:
Balances with banks
Deposits with Banks
December 31,
2010
SYP
9,121,423,250
22,026,362,782
1,020,468,642
32,712,669,333
9,452,615,093
27,023,108,164
6,950,513,037
2,232,743,513
17,856,664,370
5,895,515,211
-
8,630,643,984
1,602,388,317
14,769,862,998
7,636,545,626
4,215,000,000
379,765,032
1,643,558,069
470,519,533
532,985,957
321,501,234
1,491,403,713
698,208,401
358,075,493
Letter of credit- import
Issued letters of guarantee
Acceptances
Unutilized direct credit facilities limits
1,625,151,520
14,949,477,788
1,051,728,662
3,225,368,918
2,184,316,603
14,426,829,816
1,200,107,930
11,306,798,575
Total
88,982,246,284
138,030,075,280
Individual
Real estate
Large companies
Small and medium enterprises
Government and public sector
Financial assets and other assets
Other assets
Blocked deposit with Central bank of Syria
Off-balance sheet items
56
2. Credit risk exposure based on risk rating:
According to circular No (597/MN/B4) issued by Monetary and Credit Council dated December 9, 2009 which was amended by circular
No (650/MN/B4) dated April 14, 2010, credit facilities portfolio should be classified into six grades based on the indicators and specifications
featuring each type of debt.
The table below illustrates the exposure to direct credit risk by degree of risk as of December 31, 2011 as follows:
Direct credit facilities
Normal (low risk)
Normal (acceptable risk)
Watch (special mention)
Not due
Overdue:
Less than 30 days
31 days to 60 days
61 days to 90 days
Individual
SYP
Real estate
SYP
Large
companies
SYP
Corporate
Small and medium
enterprises
SYP
Government and
public sector
SYP
Total
SYP
30,529,140
5,624,899,150
540,237,277
12,091,741
3,788,424
1,900,337,331
125,362,641
27,097,970
41,849,864
6,013,009,407
10,792,759,970
10,514,228,640
35,125,816
2,575,219,308
2,314,314,252
2,235,625,878
-
111,293,244
16,113,465,196
13,772,674,140
12,789,044,229
340,936,250
187,209,286
37,949
63,243,995
34,982,727
112,012,603
85,129,398
81,389,329
32,393,258
24,554,488
21,740,628
-
144,443,810
513,864,131
325,321,970
Non-performing:
Substandard
Doubtful
Bad
Total non-performing
330,858,551
197,642,219
684,605,913
1,213,106,683
99,945,590
55,917,885
73,346,084
229,209,559
331,535,165
396,125,727
1,481,063,430
2,208,724,322
468,839,687
392,786,807
406,546,697
1,268,173,191
-
1,231,178,993
1,042,472,638
2,645,562,124
4,919,213,755
Total
7,408,772,250
2,258,697,955
19,056,343,563
6,192,832,567
-
34,916,646,335
Less:
Suspended interest
(
Provision for impairment
of direct credit facilities (
54,743,902) (
2,548,138) (
232,974,045) (
88,208,004)
-
(
378,474,089)
403,515,311) (
23,406,304) (
966,705,148) (
209,109,352)
-
(
1,602,736,115)
6,950,513,037
2,232,743,513
17,856,664,370
57
5,895,515,211
-
32,935,436,131
The table below illustrates the exposure to direct credit risk by degree of risk as of December 31, 2010 as follows:
Direct credit facilities
Normal (low risk)
Not due
Overdue:
Less than 30 days
31 days to 60 days
61 days to 90 days
Non-performing:
Substandard
Doubtful
Bad
Total
Less:
Suspended interest
(
Provision for impairment
of direct credit facilities (
Individual
SYP
Real estate
SYP
Large
companies
SYP
Corporate
Small and medium
enterprises
SYP
Government and
public sector
SYP
Total
SYP
32,115,940
7,957,689,664
228,082,769
61,608,001
1,456,992,347
68,793,072
33,787,120
18,224,879
6,352,793,448
7,671,430,753
7,388,175,951
14,041,154
2,658,118,247
4,577,328,933
4,552,480,980
4,215,000,000
-
4,279,381,973
18,425,593,706
12,545,635,527
12,036,052,052
166,474,768
35,005,952
39,791,364
119,088,869
124,374,569
10,836,244
1,274,175
12,737,534
-
50,627,608
120,363,044
338,592,823
209,876,751
112,738,798
313,524,940
636,140,489
51,433,815
10,438,823
26,425,889
88,298,527
27,145,367
307,120,774
960,950,143
1,295,216,284
181,846,122
48,633,958
356,659,946
587,140,026
-
470,302,055
478,932,353
1,657,560,918
2,606,795,326
8,854,028,862
1,614,083,946
15,337,665,364
7,836,628,360
4,215,000,000
37,857,406,532
19,831,982) (
1,527,493) (
139,181,387) (
37,326,088)
-
(
197,866,950)
203,552,896) (
10,168,136) (
428,620,979) (
162,756,646)
-
(
805,098,657)
8,630,643,984
1,602,388,317
14,769,862,998
58
7,636,545,626
4,215,000,000
36,854,440,925
The table below illustrates the exposure to indirect credit risk by degree of risk as of December 31, 2011 as follows:
Indirect credit facilities
Individual
SYP
Large
companies
SYP
Real estate
SYP
392,087,234
92,026,543
2,786,000
2,786,000
39,268,782
39,268,782
-
7,021,350
5,765,572
47,433,128
60,220,050
4,204,722
24,246,000
283,000
28,733,722
11,226,072
30,011,572
86,984,910
128,222,554
Total
Less:
Provision for impairment of
indirect credit facilities
526,168,559
-
4,985,010,917
1,958,344,089
7,469,523,565
Net indirect credit facilities
526,168,559
-
77,020,259
2,144,203,420
2,703,567,188
2,703,567,188
Total
SYP
Normal (low risk)
Not due
Overdue:
Less than 30 days
31 days to 60 days
61 days to 90 days
Non- performing
Substandard
Doubtful
Bad
-
-
Corporate
Small and medium
enterprises
SYP
-
-
304,054,492
1,090,135,023
535,420,852
535,420,852
-
(
31,031,336)
4,953,979,581
59
773,161,985
3,326,364,986
3,241,774,040
3,241,774,040
-
(
-
109,904)
1,958,234,185
(
31,141,240)
7,438,382,325
The table below illustrates the exposure to indirect credit risk by degree of risk as of December 31, 2010 as follows:
Indirect credit facilities
Individual
SYP
Large
companies
SYP
Real estate
SYP
130,602,721
2,118,422,879
4,488,901,238
4,488,901,238
Total
SYP
Normal (low risk)
Not due
Overdue:
Less than 30 days
31 days to 60 days
61 days to 90 days
Non- performing
Substandard
Doubtful
Bad
370,789,168
46,619,246
-
372,275
67,104,581
67,476,856
-
64,652,148
64,652,148
5,644,721
1,751,206
7,395,927
6,016,996
133,507,935
139,524,931
Total
Less:
Provision for impairment of
indirect credit facilities
484,885,270
-
6,802,578,986
2,084,622,312
9,372,086,568
Net indirect credit facilities
484,885,270
-
-
Corporate
Small and medium
enterprises
SYP
-
-
-
-
(
24,549,043)
6,778,029,943
60
145,476,570
773,144,408
1,158,605,407
1,158,605,407
646,868,459
2,938,186,533
5,647,506,645
5,647,506,645
-
2,084,622,312
-
(
24,549,043)
9,347,537,525
In accordance with circular No (650/MN/B4) issued by Monetary and Credit Council dated April 14, 2010
which amended circular No (597/MN/B4) dated December 9, 2009, banks are required, if profits are
reported, to establish a general reserve for credit risk as follows:
1- 1% of normal direct credit facilities
2- 0.5% of normal indirect credit facilities
3- An additional 0.5% on the part of performing direct credit facilities (special mention) granted
against personal guarantees or no guarantees.
In accordance with section B of article 1 of circular No (650/MN/B4), banks were granted a maximum
period until end of year 2013 to gradually allocate the required reserve and provision on performing credit
facilities that were outstanding as of December 31, 2009. Yearly allocations should not go below 25% of
the above-mentioned provision and reserve and are equally allocated between quarters.
General reserve for credit risk amounted to SYP 252,065,192 as of December 31, 2011 (compared to SYP
180,807,245 as of December 31, 2010). The portion allocated to this year amounted to SYP 104,960,447.
The Bank also established a provision on non-performing and watch-list credit facilities amounting to SYP
1,386,933,898 as of December 31, 2011 (compared to 774,090,885 as of December 31, 2010).
The Bank calculated a provision on performing credit facilities that were outstanding on
December 31, 2009 amounting to SYP 222,227,265 which should not go below 25% of the abovementioned provision and should be equally allocated to each year’s quarters. The calculated provision as
of December 31, 2011 amounted to SYP 184,468,223 and the portion allocated to the year amounted to
SYP 55,556,816.
61
3. Fair value of guarantees against credit facilities
The table below illustrates the fair value of guarantees against credit facilities as of December 31, 2011 as follows:
Individual
SYP
Real estate
SYP
Large
companies
SYP
Corporate
Small and medium
enterprises
SYP
Normal (low risk)
Overdue:
31 days to 60 days
61 days to 90 days
Non-performing
Substandard
Doubtful
Bad
422,616,373
4,287,217,712
481,154,497
3,788,424
1,936,283,538
111,808,515
118,870,123
2,975,798,865
5,446,355,862
225,173,253
132,457,024
50,181,871
38,707,819
226,609,845
137,004,648
462,435,771
105,393,899
56,960,347
81,845,676
297,876,191
395,558,362
1,105,257,096
Total
6,017,038,846
2,296,080,399
Cash margins
Acceptable banks’ guarantees
Real estate’s guarantees
Shares
Vehicles
Other guarantees
561,194,134
2,383,070,410
3,072,763,850
10,452
Total
6,017,038,846
Total
SYP
-
884,455,228
12,121,929,382
8,219,455,129
-
275,355,124
171,164,843
423,255,393
341,312,964
346,192,267
-
1,053,135,328
930,836,321
1,995,730,810
10,339,716,499
6,552,706,454
-
25,205,542,198
3,788,424
2,292,291,975
-
1,123,447,769
165,175,229
5,817,885,894
11,401,229
2,938,596,980
283,209,398
744,425,889
4,695,207,647
441,878,017
671,194,901
-
-
2,432,856,216
165,175,229
15,188,455,926
453,279,246
6,682,555,731
283,219,850
2,296,080,399
10,339,716,499
6,552,706,454
-
25,205,542,198
-
62
339,180,308
2,922,629,267
2,180,136,255
Government and
public sector
SYP
-
The table below illustrates the fair value of guarantees against credit facilities as of December 31, 2010 as follows:
Individual
SYP
Real estate
SYP
Large
companies
SYP
Corporate
Small and medium
enterprises
SYP
Normal (low risk)
Overdue:
31 days to 60 days
61 days to 90 days
Non-performing
Substandard
Doubtful
Bad
402,905,108
6,904,734,062
756,074,601
1,424,993,867
117,093,481
148,827,600
2,571,890,827
4,858,003,967
159,517,724
2,457,311,321
3,836,790,294
70,222,154
38,709,250
36,715,549
9,176,231
647,304,575
1,836,107,563
141,553,968
76,606,107
239,834,289
51,435,672
11,224,803
32,786,536
Total
8,521,708,135
Cash margins
Acceptable banks’ guarantee
Real estate’s guarantees
Vehicles
Syrian Ministry of Finance
guarantees
Other guarantees
1,298,803,254
3,075,483,545
4,147,411,367
Total
8,521,708,135
-
9,969
Government and
public sector
SYP
Total
SYP
4,215,000,000
-
4,926,250,432
13,358,930,077
9,567,962,343
277,429,860
598,528,945
-
1,031,672,138
2,482,521,989
11,422,175
163,360,615
542,840,634
184,932,498
47,820,631
267,814,817
-
389,344,313
299,012,156
1,083,276,276
1,637,534,359
8,296,345,818
6,954,187,285
4,215,000,000
29,624,775,597
1,637,534,359
-
568,183,743
105,303,924
4,646,999,764
2,654,230,874
898,721,964
21,000,000
4,637,148,921
1,397,316,400
-
2,765,708,961
126,303,924
13,997,166,589
8,198,958,641
4,215,000,000
-
4,215,000,000
321,637,482
4,215,000,000
29,624,775,597
1,637,534,359
321,627,513
8,296,345,818
63
6,954,187,285
Reclassified facilities:
These balances represent facilities that had previously been classified as non-performing facilities and
were reclassified later as watch list. These facilities amounted to SYP 82,130,047 as of
December 31, 2011 (compared to SYP 797,484,183 as of December 31, 2010).
Rescheduled facilities:
These balances represent facilities for which credit terms have been changed such as changes in
installments, maturity, rescheduled payments or grace period extension. These facilities were classified as
watch list and amounted to SYP 21,753,262 as of December 31, 2011 (compared to SYP 151,840,715 as
of December 31, 2010).
4. Quality of financial assets in terms of credit risk:
The quality of financial assets in terms of credit risk exposure is measured based on an internal rating
mechanism for credit risk as shown below (impairment provisions are not included below)
Good
SYP
Balances with banks
Deposits with banks
Total
SYP
9,121,423,250
8,287,625,598
379,765,032
1,643,558,069
532,985,957
13,738,737,184
1,020,468,642
-
-
9,121,423,250
22,026,362,782
1,020,468,642
379,765,032
1,643,558,069
532,985,957
19,965,357,906
14,759,205,826
-
34,724,563,732
Good
SYP
Balances with banks
Deposits with banks
December 31, 2011
Normal
Impaired
SYP
SYP
December 31, 2010
Normal
Impaired
SYP
SYP
Total
SYP
32,712,669,333
8,224,765,452
23,198,022,000
321,501,234
1,491,403,713
358,075,493
1,227,849,641
3,825,086,164
-
-
32,712,669,333
9,452,615,093
27,023,108,164
321,501,234
1,491,403,713
358,075,493
66,306,437,225
5,052,935,805
-
71,359,373,030
64
5. Credit risk exposure based on internal risk rating:
December 31,
S&P Rating
Good
Class 1*
Class 2
Class 3
2011
SYP
2010
SYP
AAA- To AAA+
AA- To AA+
A- To A+
Normal
Class 4**
Class 5
9,664,171,347
40,830,129
10,260,356,430
19,965,357,906
34,130,475,097
11,112,887,920
21,063,074,208
66,306,437,225
BBB- To BBB+
BB- To BB+
13,640,829,232
1,118,376,594
4,678,135,805
374,800,000
14,759,205,826
5,052,935,805
34,724,563,732
71,359,373,030
* Balances with Central Bank of Syria were classified under class 1.
** Balances with local banks were classified under class 4.
Bills, bonds and treasury bills
Credit rating
Rating agency
A+
AA-
S&P
S&P
Held-for-trading
financial assets
SYP
379,765,032
-
65
Held to maturity
financial assets
SYP
557,200,000
1,086,358,069
Total as of
December 31, 2011
SYP
936,965,032
1,086,358,069
6.
Concentration of assets and liabilities by geographical region
The table below illustrates credit exposure concentration by geographical region as follows:
Syria
SYP
Middle East
SYP
Europe
SYP
9,121,423,250
1,520,793,174 15,873,306,876
239,608,475
278,600,000
Balances with banks
Deposits with banks
Net direct credit facilities:
Individual
Real estate
Corporate:
Large companies
Small and medium enterprises
Other assets
17,856,664,370
5,895,515,211
439,193,097
532,985,957
529,158,069
6,728,223
-
1,114,400,000
379,765,032
24,598,213
-
Total 2011
44,789,440,084 16,687,793,168
6,651,867,341
314,442
Total 2010
74,648,327,727
6,610,880,872 25,276,747,393
2,344,376,921
6,950,513,037
2,232,743,513
-
4,630,843,929
502,260,167
Asia *
SYP
-
* Except for Middle East countries
66
-
314,442
America
SYP
1,104,361
-
Total
SYP
9,121,423,250
22,026,362,782
1,020,468,642
-
-
6,950,513,037
2,232,743,513
-
-
17,856,664,370
5,895,515,211
1,643,558,069
379,765,032
470,519,533
532,985,957
1,104,361
68,130,519,396
31,689,443 108,912,022,356
7. Concentration by Industry Sector
The table below illustrates credit exposure by industry sector as follows:
Balances with
Central Bank of Syria
Balances with banks
Deposits with banks
Net direct credit
facilities
Held to maturity
financial assets
Held-for-trading
financial assets
Other assets
Blocked deposit with
Financial
SYP
Industrial
SYP
Commercial
SYP
Real estate
SYP
9,121,423,250
22,026,362,782
1,020,468,642
-
-
-
1,114,400,000
392,881,812
44,327,115
532,985,957
4,076,369,778 7,576,210,697
12,065,992
-
22,425,468
-
Balance as of
December 31, 2011
34,252,849,558 4,088,435,770 7,598,636,165
Balance as of
December 31, 2010
71,043,672,364 3,289,648,132 5,199,621,120
Government
Government
and public sector and public sector
Agricultural
(resident)
(non-resident)
SYP
SYP
SYP
-
-
99,792,994
-
-
-
295,386
-
-
9,121,423,250
22,026,362,782
1,020,468,642
-
-
21,183,062,662
32,935,436,131
-
1,643,558,069
-
529,158,069
-
1,486,583
-
-
-
100,088,380
-
67
455,323,539
Total
SYP
-
-
1,785,507
Individual
and others
SYP
4,314,443,363
-
389,918,989
-
392,881,812
470,519,533
532,985,957
530,644,652 21,572,981,651
68,143,636,176
454,960,350 24,178,658,742
108,938,113,117
B- Market Risk
Market risk arises mainly by fluctuations in interest and foreign exchange rates.
Board of directors has set limits on the acceptable levels of exposure to market risk. Changes in rates are
monitored and compared against these limits on a daily basis.
Mitigating market risk
The Bank considers that continuous monitoring of internal and external reports, in addition to daily
follow up of news (mainly issued by international rating agencies) regarding correspondent banks, is
sufficient to provide alert for any potential risk. The Bank avoids concentration in specific currency or
segment in accordance with predetermined limits.
Market risk management
Market risk policies and procedures determine the treatment with various types of market risks that may
arise from the Bank’s operations, whether in assets or liabilities, in case of changes in exchange rates or
interest rates. Regular assurance of the availability of acceptable levels of liquidity and compliance with
the required capital adequacy ratio determined by Central Bank of Syria also help in market risk
management.
Interest rate risk
The Bank is exposed to interest rate risk which arises from interest bearing financial instruments and
reflects the possibility that changes in interest rates will adversely affect the value of financial
instruments and related income.
The Bank manages this risk principally through monitoring interest rate gaps and by matching the repricing profile of assets and liabilities. Interest rate risk positions are managed by a specialized
committee that periodically monitors interest rate sensitivity. Interest rate and maturity gaps between
assets and liabilities are regularly assessed and checked against established limits. In addition, hedging
solutions are implemented against interest rate risk whenever deemed necessary.
The Bank manages these risks through follow up of re-pricing of the assets and liabilities that earns
interest through the policy of risk management, which is revised periodically by the risk management
committee in the Bank.
Interest rate risk (sensitivity analysis) 2% change in interest rate
2% increase in interest rate
December 31, 2011
Currency
USD
EUR
GBP
JPY
SYP
Gap
SYP
(
1,606,804)
(
1,914,825)
(
332,642)
(
969,261)
(17,930,843,281)
68
(
(
(
(
(
Interest income
sensitivity
(profit and loss)
SYP
32,136)
38,297)
6,653)
19,385)
358,616,866)
Equity
sensitivity
SYP
(
24,102)
(
28,723)
(
4,990)
(
14,539)
( 268,962,650)
2% decrease in interest rate
December 31, 2011
Currency
USD
EUR
GBP
JPY
SYP
2% increase in interest rate
Interest income
sensitivity
(profit and loss)
SYP
Gap
SYP
(
1,606,804)
(
1,914,825)
(
332,642)
(
969,261)
(17,930,843,281)
32,136
38,297
6,653
19,385
358,616,866
December 31, 2010
Currency
USD
EUR
GBP
JPY
SYP
2% decrease in interest rate
Gap
SYP
( 3,481,340,659)
( 1,065,346,117)
( 61,767,561)
( 24,218,462)
(35,680,043,967)
December 31, 2010
Currency
USD
EUR
GBP
JPY
SYP
Gap
SYP
( 3,481,340,659)
( 1,065,346,117)
( 61,767,561)
( 24,218,462)
(35,680,043,967)
(
(
(
(
(
Interest income
sensitivity
(profit and loss)
SYP
69,626,813)
21,306,922)
1,235,351)
484,369)
713,600,879)
Interest income
sensitivity
(profit and loss)
SYP
69,626,813
21,306,922
1,235,351
484,369
713,600,879
Equity
sensitivity
SYP
24,102
28,723
4,990
14,539
268,962,650
Equity
sensitivity
SYP
( 52,220,110)
( 15,980,192)
(
926,513)
(
363,277)
( 535,200,660)
Equity
sensitivity
SYP
52,220,110
15,980,192
926,513
363,277
535,200,660
Currency risk
Currency risk arises from the fluctuations in exchange rates. The Bank functional currency is Syrian
Pounds and the Management sets limits for foreign currency positions and monitors these positions
regularly.
The Bank performs sensitivity analysis to control the effects of changes on profit or loss. A negative
number below indicates net burden that would affect consolidated income statement and consolidated
statement of changes in equity, where the positive number reflects the opposite.
69
Currency risk (sensitivity analysis) 2% increase in exchange rate
Currency
USD
EUR
GBP
JPY
CHF
Others
Currency
USD
EUR
GBP
JPY
CHF
Others
December 31, 2011
Change in
exchange
rate (2%)
SYP
1,738,999,645
18,055,595
481,958
(
915,997)
902,146
700,982,209
December 31, 2010
Change in
exchange
rate (2%)
SYP
1,366,427,156
8,275,590
59,044
571,607
1,585,097
3,342,041
(
Effect on
profit and loss
SYP
Effect on
equity
SYP
Effect on
profit and loss
SYP
Effect on
equity
SYP
34,779,993
38,244,511
361,112
270,834
9,639
7,229
18,320) (
13,740)
18,043
13,532
14,019,644
10,514,733
27,328,543
165,512
1,181
11,432
31,702
66,841
27,099,996
124,134
886
8,574
23,776
50,131
Stock prices risks
The bank is exposed to stocks’ price risks arising from investment in stocks.
Stock prices risks represent a decrease in the fair value of portfolio investment as a result of possible
changes in stock indexes and stock prices.
The following table analyzes the impact of changes in stock prices acquired as equity instruments with
the changes in stocks prices, with other variables remains constant:
Index
Changes
in stock index
%
Damascus Stocks Exchange
Increase 5%
Damascus Stocks Exchange
Decrease 5%
70
Effect on
share price
SYP
(
Effect on
equity
SYP
4,806,928
3,605,196
4,806,928) (
3,605,196)
Interest rate re-pricing gap
Classification is determined according to interest rate re-pricing frequency or maturity whichever is earlier:
Assets
Cash and balances with
Balances with banks
Deposits with banks
Intangible assets
Deferred tax assets
Other assets
Within
1 month
SYP
Between 1
and
3 months
SYP
December 31, 2011
Between 3
and
6 months
SYP
Between 6
and
9 months
SYP
22,026,362,782
694,402,000
379,765,032
10,381,841,775
-
2,968,111,945
1,114,400,000
-
213,846,475
3,056,316,094
-
112,220,167
1,144,186,747
-
-
-
-
-
33,482,371,589
4,082,511,945
3,270,162,569
Banks’ deposits
Cash margins
Deferred tax liabilities
Other liabilities
1,480,117,321
55,511,096,669
219,160,150
-
2,504,773,940
182,353,000
-
Total liabilities
57,210,374,140
2,687,126,940
Total assets
Liabilities and equity
( 23,728,002,551)
1,395,385,005 (
Between 9
months and
1 year
SYP
More than
1 year
SYP
Non interest
sensitive
SYP
13,640,099,834
13,116,780
776,898,882 12,451,162,866 2,156,917,822
83,021,780
529,158,069
2,752,129,311
128,240,266
16,361,885
470,519,533
532,985,957
1,256,406,914
776,898,882 12,980,320,935 19,793,393,168
75,642,066,002
1,645,663,548
1,977,516,468
-
1,229,439,780
163,068,000
-
638,524,234
364,783,000
-
199,164,960
35,804,000
-
189,202,671
230,484,649
8,117,500
2,041,891,132
1,480,117,321
61,728,663,131
2,942,684,618
189,202,671
230,484,649
8,117,500
2,041,891,132
3,623,180,016
1,392,507,780 1,003,307,234
234,968,960
2,469,695,952
68,621,161,022
136,100,866) ( 226,408,352) 12,745,351,975 17,323,697,216
7,020,904,980
71
-
13,640,099,834
22,026,362,782
1,020,468,642
392,881,812
32,935,436,131
83,021,780
1,643,558,069
2,752,129,311
128,240,266
16,361,885
470,519,533
532,985,957
353,017,447) (
-
Total
SYP
Assets
Balances with banks
Deposits with banks
Intangible assets
Deferred tax assets
Other assets
Within
1 month
SYP
Between 1
and
3 months
SYP
5,064,983,093 4,387,632,000
8,366,255,164 13,954,553,000
321,501,234
9,021,784,600 2,055,803,108
937,000,000
185,828,471
103,917,927
-
-
December 31, 2010
Between 3
and
6 months
SYP
Between 6
and
9 months
SYP
3,236,620,000
5,439,500,523
53,110,281
-
Between 9
months and
1 year
SYP
More than
1 year
SYP
Non interest
sensitive
SYP
36,188,623,766
93,700,000 1,371,980,000
26,090,761
3,672,719,696 1,103,199,259 14,989,156,456
572,277,283
99,443,363
454,960,350
92,144,030
2,113,860,574
132,890,198
8,506,232
13,785,458
8,900,114
250,968,923
81,697,227
-
-
-
Total
SYP
36,188,623,766
9,452,615,093
27,023,108,164
347,591,995
36,854,440,925
1,491,403,713
92,144,030
2,113,860,574
132,890,198
8,506,232
698,208,401
358,075,493
358,075,493
22,960,352,562 21,438,906,035
8,729,230,804
3,780,205,154 2,583,522,736 15,695,085,729 39,574,165,564
114,761,468,584
Banks’ deposits
Cash margins
Other liabilities
992,433,428
94,570,902,311
179,600,816
-
161,422,697
3,271,664,054
160,924,358
-
2,475,088,905
2,104,518,713
-
1,246,798,237 1,200,151,310
111,751,630
71,355,363
-
795,717,802
93,166,117
-
153,159
59,725,855
339,075,198
10,582,500
1,842,640,604
1,153,856,125
103,560,475,778
2,721,316,997
59,725,855
339,075,198
10,582,500
1,842,640,604
Total liabilities
95,742,936,555
3,594,011,109
4,579,607,618
1,358,549,867 1,271,506,673
888,883,919
2,252,177,316
109,687,673,057
( 72,782,583,993) 17,844,894,926
4,149,623,186
2,421,655,287 1,312,016,063 14,806,201,810 37,321,988,248
5,073,795,527
Total assets
Liabilities and equity
72
Concentration in foreign currency risk
USD
SYP
December 31, 2011
GBP
JPY
SYP
SYP
EUR
SYP
Others
SYP
Total
SYP
Assets
Balances with banks
Deposits with banks
Other assets
Blocked deposit with Central
Bank of Syria
2,685,860,885
14,970,837,061
780,860,165
167,160,000
437,345,635
1,643,558,069
26,214,366
Total assets
20,998,748,288
7,436,057,234
247,684,762
57,177,647
2,416,760,748
31,156,428,679
Liabilities
Banks’ deposits
Cash margins
Other liabilities
441,925,387
18,038,333,966
644,402,622
22,513,777
112,572,891
156,826,549
6,315,720,053
657,932,729
39,560,709
247,961,599
5,243,442
241,405,797
436,150
117,415
55,938,282
2,155,362
-
58,788
1,467,833,353
244,773,873
2,210,379
659,992,448
26,065,448,531
1,547,545,374
62,074,486
362,862,284
Total liabilities
19,259,748,643
7,418,001,639
247,202,804
58,093,644
1,714,876,393
28,697,923,123
1,738,999,645
18,055,595
701,884,355
2,458,505,556
Net statement of financial position
concentration
286,912,107
2,710,126,773
4,244,066,970
212,605,033
268,256,195
1,002,263
-
1,334,204
246,051,662
294,116
4,780
-
73
481,958 (
109,579
5,166,368
51,901,700
-
915,997)
119,635,240
2,256,429,839
40,686,792
8,877
-
5,517,066,681
21,722,551,900
780,860,165
379,765,033
798,484,438
1,643,558,069
27,230,286
286,912,107
Balances with banks
Deposits with banks
Other assets
Blocked deposit with Central
Bank of Syria
Total assets
Liabilities
Banks’ deposits
Cash margins
Other liabilities
Total liabilities
Net statement of financial position
concentration
USD
SYP
December 31, 2010
GBP
JPY
SYP
SYP
EUR
SYP
Others
SYP
Total
SYP
3,974,885,838
5,707,050,507
17,849,850,000
143,304,780
1,480,166,874
1,391,960,350
37,287,636
1,161,477,037
2,115,092,187
3,936,365,000
178,196,454
249,279,643
6,394,352
62,481,805
321,391,673
230,690
112,085
13,223
27,709,683
51,135,090
-
294,511,684
560,704,664
2,114,557,000
102,626,604
78,772,370
5,493,369,587
8,731,948,714
23,900,772,000
321,501,234
1,883,438,901
1,391,960,350
122,566,443
168,833,543
30,753,339,528
7,646,804,673
384,216,253
78,857,996
3,151,172,322
168,833,543
42,014,390,772
277,184,766
28,166,487,558
887,418,373
55,821,675
29,386,912,372
54,374,944
7,119,547,529
408,269,593
56,337,017
7,638,529,083
4,367,631
378,947,567
772,013
69,998
384,157,209
74,737,000
3,526,469
22,920
78,286,389
95,136,620
2,923,333,897
108,571,813
19,202,854
3,146,245,184
505,800,961
38,591,843,020
1,405,031,792
131,454,464
40,634,130,237
1,366,427,156
8,275,590
59,044
571,607
4,927,138
1,380,260,535
74
Business Risk
Business risk arises from several factors that generally affect the banking sector such as political and
economic conditions, which have negative indicators on business results. Management revaluates risks
regularly to take appropriate actions to minimize their effects on business results and financial position
of the Bank.
Early settlement risk
Financial losses may arise from an early settlement by customers before maturity, such as mortgages
with fixed interest rates when the interest rates deteriorate. An early settlement that may result from
other market factors is not material in the markets in which the Bank operates. Thus, the Bank considers
the impact of an early settlement on net interest income immaterial after taking into consideration any
received penalties that may result from an early settlement.
C- Liquidity Risk
Liquidity risk is the risk that the Bank will be unable to meet its obligations associated with its financial
liabilities when they fall due. To limit liquidity risk, the management diversifies sources of funding,
efficiently manages assets and monitors liquidity position on a daily basis and forecast future cash
inflows/outflows. The availability of collateral is assessed as well to secure additional funding if needed.
The Bank maintains highly marketable assets that can be easily liquidated into cash in the event of any
shortage of liquidity. The Bank also maintains compulsory cash reserves with Central Bank of Syria in
the form of deposits equal to 5% of average customers’ deposits and 10% of capital. In addition, regular
liquidity stress testing is conducted by management under a variety of scenarios covering both normal
and stressed market conditions. The liquidity ratio is calculated based on Monetary and Credit Council’s
circular No 588 dated November 22, 2009 while limits are set by management on the ratio of net current
assets to clients’ liabilities and weighted off- balance sheet commitments.
2011
%
December 31
Average during the year
Highest percentage
Lowest percentage
53
55
58
51
75
2010
%
59
62
64
59
This table summarizes the distribution of assets and liabilities according to contractual maturity period at the date of consolidated financial statements as
follows:
On demand
Less than
8 days
SYP
December 31, 2011
8 days to
1 month
SYP
Assets
Cash and balances with Central Bank of Syria 10,432,055,275
Balances with Banks
20,967,662,782 1,058,700,000
Deposits with Banks
390,040,002
304,362,000
379,765,032
9,044,795,503 1,332,615,657
Intangible assets
Deferred tax assets
Other assets
105,892,993
65,127,565
-
1 month to
3 months
SYP
3 months to
6 months
SYP
6 months to
9 months
SYP
9 months to
1 year
SYP
more than
1 year
SYP
Without
maturity
SYP
2,881,316,322
61,521,753
-
213,846,475
2,966,132,635
9,994,833
-
112,220,165
1,099,040,228
557,200,000
61,779,009
-
3,208,044,559
13,116,780
724,650,015 11,948,892,607 2,937,993,164
83,021,780
557,200,000
529,158,069
2,752,129,311
128,240,266
16,361,885
7,446,379
155,208,001
3,549,000
532,985,957
13,640,099,834
22,026,362,782
1,020,468,642
392,881,812
32,935,436,131
83,021,780
1,643,558,069
2,752,129,311
128,240,266
16,361,885
470,519,533
532,985,957
1,289,296,394 12,649,620,562 9,659,080,817
75,642,066,002
Total
SYP
Total assets
41,320,211,587
2,760,805,222
2,942,838,075
3,189,973,943
1,830,239,402
Liabilities
Banks'deposits
Cash margins
Other liabilities
830,117,321
650,000,000
44,205,025,641 11,306,071,030
44,257,283
174,902,064
118,907,201
652,055,200
2,504,773,940
182,353,122
189,202,671
725,408,158
1,645,663,548
1,977,516,577
230,484,649
260,202,746
1,229,439,780
163,068,325
6,099,159
638,524,234
364,782,841
240,048,855
199,164,958
35,804,406
8,117,500
38,649,904
519,909
1,480,117,321
61,728,663,131
2,942,684,618
189,202,671
230,484,649
8,117,500
2,041,891,132
Total liabilities
45,731,455,445 12,249,880,295
3,601,737,891
4,113,867,520
1,398,607,264
1,243,355,930
281,736,768
519,909
68,621,161,022
Net
( 4,411,243,858) (9,489,075,073) (
45,940,464 12,367,883,794 9,658,560,908
7,020,904,980
658,899,816)
( 923,893,577)
76
431,632,138
On demand
December 31, 2010
Assets
Balances with Banks
Deposits with Banks
Intangible assets
Deferred tax assets
Other assets
Less than
8 days
SYP
8 days to
1 month
SYP
25,754,113,987
3,404,183,824
1,216,250,000
321,501,234
8,179,009,153
128,432,545
-
1,660,799,269
7,150,005,164
805,899,868
72,988,183
-
Total assets
39,003,490,743
1 month to
3 months
SYP
3 months to
6 months
SYP
6 months to
9 months
SYP
9 months to
1 year
SYP
4,387,632,000
13,954,553,000
1,983,981,483
937,000,000
148,478,536
-
3,236,620,000
5,291,583,363
63,058,905
-
93,700,000
3,543,443,633
14,014,867
-
10,434,509,779
1,371,980,000
26,090,761
1,040,038,436 14,434,673,971 1,575,811,018
92,144,030
99,443,363
454,960,350
2,113,860,574
132,890,198
8,506,232
15,259,939
246,295,876
9,679,550
358,075,493
9,689,692,484
21,411,645,019
8,591,262,268
3,651,158,500
2,526,721,738 15,144,436,429 14,743,061,403 114,761,468,584
Liabilities
Banks'deposits
Cash margins
Other liabilities
992,433,428
76,156,286,227 18,414,769,247
30,268,259
149,332,557
24,302,475
417,261,623
161,422,697
3,271,664,054
160,924,357
59,725,855
1,035,026,972
2,475,088,905
2,104,518,713
339,075,198
10,582,500
229,895,991
1,246,798,237
111,751,630
2,536,330
1,200,151,310
71,355,363
101,453,101
795,717,798
93,166,118
32,164,112
-
1,153,856,125
103,560,475,778
2,721,316,997
59,725,855
339,075,198
10,582,500
1,842,640,604
Total liabilities
77,596,249,537 18,588,404,279
4,688,763,935
5,159,161,307
1,361,086,197
1,372,959,774
921,048,028
-
109,687,673,057
Net
(38,592,758,794) (8,898,711,795) 16,722,881,084
3,432,100,961
2,290,072,303
1,153,761,964 14,223,388,401 14,743,061,403
77
more than
1 year
SYP
Without
maturity
SYP
Total
SYP
36,188,623,766
9,452,615,093
27,023,108,164
347,591,995
36,854,440,925
92,144,030
1,491,403,713
2,113,860,574
132,890,198
8,506,232
698,208,401
358,075,493
5,073,795,527
Off-balance sheet items
Letters of credit and acceptances
Unutilized direct credit facilities
Issued guarantees
Contractual obligations
Issued guarantees
December 31, 2011
From 1
More than
to 5 years
5 years
SYP
SYP
Up to one year
SYP
Total
SYP
2,676,880,182
3,225,368,918
12,878,383,740 2,071,094,048
84,024,852 321,256,418
2,676,880,182
3,225,368,918
14,949,477,788
253,443,532
658,724,802
18,864,657,692 2,392,350,466
253,443,532 21,510,451,690
December 31, 2010
From 1
More than
to 5 years
5 years
SYP
SYP
Up to one year
SYP
Total
SYP
3,384,424,533
11,306,798,575
12,421,967,379 1,984,329,193
22,641,297 186,132,750
3,384,424,533
11,306,798,575
20,533,244 14,426,829,816
136,726,990
345,501,037
27,135,831,784 2,170,461,943
157,260,234 29,463,553,961
Fair value
Fair value represents the amount at which an asset can be exchanged, or a liability is settled, between
knowledgeable, willing parties in an arm’s length transaction. Differences can therefore arise between
book value under the historical cost method and fair value estimates.
Financial instruments are presented in the consolidated financial statements depending on their
classification in compliance with IAS 39. Financial assets held-for-trading and available for sale are
measured at fair value, while financial assets held to maturity are measured at amortized cost after
deducting permanent impairment losses on their fair value.
Operational risk
Operational risk represents any losses that can be incurred as a result of deficiencies in procedures,
human errors, financial system, technical infrastructure and external factors. Operational risks are
measured using statistical methods that are consistent with the nature of the Bank’s operations. The Bank
cannot eliminate all types of operation risks but it can be controlled by a comprehensive control system.
The Bank uses Basic Indicator Approach according to Basel II, which states that private money of the
Bank should cover a minimum fixed percentage of 15% of the average total income for the three
preceding years.
78
Mitigating operational risk
The Bank gives high attention to operational risk which characterized with low probability of occurance
and financial losses. The Bank selects these types of operational risks and sorts them into the following
two types:
•
Controllable operational risk in which losses can be determined, or to determine the amounts of
activities that would be better if the Bank transfers their operational risks to a third party or to
determine the amounts that the Bank can obtain from insurance companies.
•
Non-controllable operational risk in which the Bank would either reduce the level of its riskassociated activities or eliminates them, or transfers these activities to third party or determine the
amounts that the Bank can obtain from insurance companies, whatever applicable.
Operational risk management
Operational risk management’s policies and procedures determine how to deal with the causes of
potential losses that may result from the ordinary course of business which is called “operational
incidents”. These incidents result from human errors, weakness in internal control, weakness in the
system, or from external factors such as disasters or fraud. These policies and procedures identify how to
measure these types of risks, ensure to minimize or eliminate them, and determine how to transfer these
risks to third party, if possible.
Overview of emergency plan and business continuity plan
The Bank prepared a comprehensive plan for business continuity, which includes the procedures should
be followed in case of emergencies. Top and middle management committees were established to
manage crisis, and a team was selected to be available in an alternative premise in case of emergencies
that is called “Business Continuity Team”. This team is trained to deal with extraordinary circumstances.
In addition, the bank periodically tests the plan by a business continuity team in the alternative premise,
where this team tests all operations that should be executed and all programs that should be used in case
of emergencies using different scenarios. The procedures are developed according to tests’ results.
79
41.
SEGMENT REPORTING
A. Information on the Bank’s business segments
The Bank is organized for administrative purposes through its major lines of business:
− Individual accounts
− Corporate accounts
− Treasury
Corporate
SYP
Individual
SYP
Total interest, fees and commissions income
Total interest, fees and commissions expense
(
Transfers between sectors
Net unrealized exchange gain
on structural position
(Loss)/ gain from held-for-trading financial assets
Gain from available for sale financial assets
Income not allocated to segments
Total Income
(
1,241,644,914
993,828,126)
588,694,622
(
(
836,511,410
226,893,238)
2,562,322,282
120,733,870) (
104,143,365) (
-
(
Treasury
SYP
360,141,261
16,104,720)
484,551,257)
Others
SYP
-
384,504,453
308,728,094
12,666,617)
5,859,500
-
3,579,567
2,337,445,047
687,312,478)
545,910,714
-
3,579,567
3,579,567
(
Total
SYP
(
4,164,108,457
1,130,666,716) (
-
3,788,923,795
1,168,319,617)
-
(
384,504,453
308,728,094
12,666,617)
5,859,500
3,579,567
33,828,417
196,972,988
11,703,067
4,370,000
12,895,295
3,723,446,738
914,205,716) (
2,880,373,945
229,234,522)
2,809,241,022
2,651,139,423
2,036,270,947) (
772,970,075
113,465,622) (
1,647,136,987)
1,004,002,436
336,199,330)
659,504,453
667,803,106
(
Net income
609,618,172
1,650,132,569
545,910,714
Operating expenses not allocated to segments
Profit before tax
Net income tax
609,618,172
-
1,650,132,569
-
545,910,714
-
( 2,036,270,947) (
( 2,032,691,380)
( 113,465,622) (
Net profit for the year
609,618,172
1,650,132,569
545,910,714
( 2,146,157,002)
- 80 -
Year ended
December 31,
2010
SYP
December 31, 2011
Individual
SYP
Corporate
SYP
Treasury
SYP
Others
SYP
Total
SYP
December 31,
2010
SYP
Segments’ assets
Assets not allocated to segments
9,231,179,440
-
23,801,745,079
-
39,360,426,052
-
3,248,715,431
72,393,350,571
3,248,715,431
112,023,935,677
2,737,532,907
Total assets
9,231,179,440
23,801,745,079
39,360,426,052
3,248,715,431
75,642,066,002
114,761,468,584
Segments’ liabilities
Liabilities not allocated to segments
50,768,495,730
-
14,768,114,449
-
1,639,697,394
-
1,444,853,449
67,176,307,573
1,444,853,449
108,711,799,108
975,873,949
Total liabilities
50,768,495,730
14,768,114,449
1,639,697,394
1,444,853,449
68,621,161,022
109,687,673,057
Capital expenditure
-
-
-
945,709,736
945,709,736
632,338,572
-
-
-
296,753,330
296,753,330
192,202,120
-
-
-
13,608,047
13,608,047
13,888,946
Other information
- 81 -
B. information on geographical distribution
This note illustrates the geographical distribution of the Bank’s activities. The Bank mainly operates
through its main branch and its network of branches spread around Syria.
The following table shows the distribution of the Bank’s profits, total assets and capital expenditures by
geographical segment:
Domestic
Syria
SYP
Outside
Syria
Total
SYP
SYP
2,756,026,790
308,728,094
Loss from held-for-trading financial assets
(
14,808,170)
384,504,453
5,859,500
3,501,798
277,414,951
3,033,441,741
308,728,094
2,141,553 (
12,666,617)
384,504,453
5,859,500
77,769
3,579,567
Total income
3,443,812,465
914,205,716)
279,634,273
3,723,446,738
( 914,205,716)
2,529,606,749
279,634,273
2,809,241,022
52,300,986,692 23,341,079,310
75,642,066,002
(
Net income
Total assets
Capital expenditure
945,709,736
Domestic
Syria
SYP
Gain from held-for-trading financial assets
Total income
Net income
Total assets
(
-
945,709,736
Outside
Syria
Total
SYP
SYP
2,331,355,315
196,972,988
2,070,613
33,828,417
4,370,000
12,678,929
289,248,863
9,632,454
216,364
2,620,604,178
196,972,988
11,703,067
33,828,417
4,370,000
12,895,293
2,581,276,262
229,234,522)
299,097,681
2,880,373,943
(
229,234,522)
2,352,041,740
299,097,681
2,651,139,421
80,650,098,248 34,111,370,336 114,761,468,584
Capital expenditure
632,338,572
82
-
632,338,572
42.
CAPITAL ADEQUACY
The Bank maintains adequate capital to face risks inherent in its nature of activities. Capital adequacy
ratios are monitored on a regular basis by the Bank’s management and are checked against Basel II
International Banking Standards (adopted by Central Bank of Syria).
All banks operating in Syria are required to maintain a capital adequacy ratio at a minimum of 8%
according to circular No (253/MN/B4) issued by Monetary and Credit Council on January 24, 2007 in
accordance with Basel guidelines. The Bank’s capital adequacy has exceeded the minimum requirement of
8%. In addition, the Bank tracks credit concentration ratios that use regulatory capital as an indicator.
The Bank follows a policy to manage its capital in accordance with the instructions of Central Bank of
Syria dated January 24, 2007 (Clause number 253). This decision states that the capital adequacy ratio
should not be less than 8% (Basel II).
The Bank manages its capital structure and amends it according to the changes in the economic conditions
and risk characteristics in its activities.
The following table illustrates the calculation of capital adequacy:
2011
SYP ‘000
Registered and paid in capital
Legal reserve
Special reserve
Realized retained earnings
Intangible assets (net)
The greater of facilities granted to or used by
major shareholders and Board of Directors
Net basic private money
(
(
Supplementary capital items:
Net unrealized profit of available for sale financial
assets after deducting 50% discount
General reserve
Unrealized retained earnings
Supplementary private money
December 31,
5,076,000
424,797
424,797
594,139
128,240)
252,483)
6,139,010
12,176
184,660
292,159
488,995
(
(
2010
SYP ‘000
3,781,000
385,311
385,311
410,726
132,890)
254,953)
4,574,505
-
15,874
79,700
95,574
Net private money (organizational capital)
Credit risk and other assets risk
Risk weighted off-balance sheet assets and liabilities
Market risk
Operational risk
6,628,005
27,206,708
4,850,989
1,065,583
2,711,354
4,670,079
29,165,737
6,080,012
322,710
2,483,582
Total
35,834,634
38,052,041
Capital adequacy ratio (%)
18,50%
12,27%
Basic capital ratio (%)
17,13%
12,02%
Basic capital to total shareholders’ equity ratio
87.44%
90.16%
83
43.
MATURITY OF ASSETS AND LIABILITIES
The following tables illustrate the allocation of financial assets and liabilities according to their maturities
as of December 31, 2011:
A- Consolidated statement of financial position items:
Up to one year
SYP
More than
1 year
SYP
Balances with banks
Deposits with banks
Intangible assets
Deferred tax assets
Other assets
10,432,055,275
22,026,362,782
1,020,468,642
379,765,033
18,327,355,439
1,114,400,000
311,762,534
-
3,208,044,559
13,116,779
14,608,080,692
83,021,780
529,158,069
2,752,129,311
128,240,266
16,361,885
158,756,999
532,985,957
13,640,099,834
22,026,362,782
1,020,468,642
392,881,812
32,935,436,131
83,021,780
1,643,558,069
2,752,129,311
128,240,266
16,361,885
470,519,533
532,985,957
Total assets
53,612,169,705
22,029,896,297
75,642,066,002
Banks’ deposits
Cash margins
Other liabilities
1,480,117,321
61,529,498,172
2,906,880,618
189,202,671
230,484,649
2,001,719,867
199,164,959
35,804,000
8,117,500
40,171,265
1,480,117,321
61,728,663,131
2,942,684,618
189,202,671
230,484,649
8,117,500
2,041,891,132
Total liabilities
68,337,903,298
283,257,724
68,621,161,022
( 14,725,733,593) 21,746,638,573
7,020,904,980
Assets
Liabilities
Net
B- Off- Balance sheet items:
Issued guarantees
From 1
to 5 years
SYP
Up to one year
SYP
More than
5 years
SYP
Total
SYP
Total
SYP
2,676,880,182
3,225,368,918
12,878,383,740 2,071,094,048
84,024,852 321,256,418
2,676,880,182
3,225,368,918
14,949,477,788
253,443,532
658,724,802
18,864,657,692 2,392,350,466
253,443,532 21,510,451,690
84
The following tables illustrate the allocation of financial assets and liabilities according to their maturities
as of December 31, 2010:
A- Consolidated statement of financial position items:
Up to one year
SYP
More than
1 year
SYP
Balances with banks
Deposits with banks
Intangible assets
Deferred tax assets
Other assets
25,754,113,988
9,452,615,093
27,023,108,164
321,501,234
20,843,955,937
1,036,443,363
442,232,974
-
10,434,509,778
26,090,761
16,010,484,988
92,144,030
454,960,350
2,113,860,574
132,890,198
8,506,232
255,975,427
358,075,493
36,188,623,766
9,452,615,093
27,023,108,164
347,591,995
36,854,440,925
92,144,030
1,491,403,713
2,113,860,574
132,890,198
8,506,232
698,208,401
358,075,493
Total assets
84,873,970,753
29,887,497,831
114,761,468,584
Banks’ deposits
Cash margins
Other liabilities
1,153,856,125
102,764,757,976
2,628,150,880
59,725,855
339,075,198
10,582,500
1,810,476,492
795,717,802
93,166,117
32,164,112
1,153,856,125
103,560,475,778
2,721,316,997
59,725,855
339,075,198
10,582,500
1,842,640,604
Total liabilities
108,766,625,026
921,048,031
109,687,673,057
( 23,892,654,273) 28,966,449,800
5,073,795,527
Assets
Liabilities
Net
B- Off- Balance sheet items:
Issued guarantees
From 1
to 5 years
SYP
Up to one year
SYP
More than
5 years
SYP
Total
SYP
Total
SYP
3,384,424,533
11,306,798,575
12,421,967,379 1,984,329,193
22,641,297 186,132,750
3,384,424,533
11,306,798,575
20,533,244 14,426,829,816
136,726,990
345,501,037
27,135,831,784 2,170,461,943
157,260,234 29,463,553,961
85
44. OFF-BALANCE SHEET COMMITMENTS
A- Off-balance sheet commitments (Face value)
2011
SYP
Contingent liabilities on behalf of customers
Letters of credit
Acceptances
Letters of guarantee:
Primary guarantees
Payment guarantees
Performance guarantees
Contingent liabilities on behalf of banks
Letters of guarantee:
Primary guarantees
Payment guarantees
Performance guarantees
Unutilized limits of direct credit facilities
Overdrafts
Discounted bills
Loans
December 31,
2010
SYP
1,625,151,520
1,051,728,662
2,184,316,603
1,200,107,930
502,549,515
907,776,693
3,382,317,175
1,005,842,393
1,553,106,008
3,428,713,632
643,072,961
1,143,735,727
8,370,025,717
1,919,437,745
1,471,531,955
5,048,198,083
544,321,247
1,316,040,098
1,365,007,573
5,935,624,790
1,934,710,905
3,436,462,880
20,851,726,888
29,118,052,924
B- Commitments and contractual obligations
Operational lease contracts due within one year
Operational lease contracts due between one to five years
Operational lease contracts due in more than five years
2011
SYP
2010
SYP
84,024,852
321,256,418
253,443,532
22,641,297
186,132,750
136,726,990
658,724,802
345,501,037
These operational lease contracts represent rent of the Bank’s branches.
86
December 31,

banque bemo saudi fransi sa consolidated financial statements and

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