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, 2010
CONSOLIDATED FINANCIAL STATEMENTS
AND INDEPENDENT AUDITOR’S REPORT
FOR THE YEAR ENDED DECEMBER 31, 2010
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 - 77
CONSOLIDATED INCOME STATEMENT
Year ended December 31,
2010
2009
SYP
SYP
Notes
Interest income
Interest expense
Net interest income
27
28
Fees and commissions income
Fees and commissions expense
Net fees and commissions income
29
30
(
3,225,730,215
1,150,530,964 ) (
2,075,199,251
3,289,776,458
1,275,884,638 )
2,013,891,820
(
563,193,580
17,788,653 ) (
545,404,927
464,880,275
35,631,116 )
429,249,159
Net interest, fees and commissions income
Net realized exchange gain
Net unrealized exchange gain/ (loss) on
structural position
Gain from trading securities
Gain on available for sale
financial assets
Other operating income
32
33
Salaries and related charges
Depreciation of property and equipment
Amortization of intangible assets
Provision for impairment of credit facilities
Miscellaneous provisions
Other operating expenses
34
13
14
35
20
36
Total operating income
2,620,604,178
2,443,140,979
196,972,988
132,748,552
33,828,417 (
11,703,067
31
4,370,000
12,895,293
2,880,373,943
19,746,686 )
9,677,040
39,540,810
117,202,155
2,722,562,850
(
(
(
(
(
(
838,612,890 )
192,202,120 )
13,888,946 )
229,234,522 )
34,132,000 )
568,301,029 )
(
713,439,792 )
159,468,926 )
13,707,628 )
229,132,526 )
481,359,315 )
(
1,876,371,507 ) (
1,597,108,187 )
(
1,004,002,436
336,199,330 ) (
1,125,454,663
464,250,186 )
Net profit for the year
Attributable to:
667,803,106
661,204,477
Equity holders of the parent
Non-controlling interests
665,613,886
2,189,220
658,553,881
2,650,596
667,803,106
661,204,477
Total operating expenses
Profit for the year before tax
Income tax
Basic and diluted earnings per share
21-D
37
89.83
(
(
(
(
88.87
THE ACCOMPANYING NOTES FROM 1 TO 46 FORM AN INTEGRAL PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
4
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
2010
2009
SYP
SYP
Notes
Profit for the year
Other comprehensive income components:
Net gain arising from revaluation of
available for sale financial assets
Deferred tax liabilities
667,803,106
26
Total comprehensive income for the year
(
9,775,000
10,582,500 )
661,204,477
32,555,000
-
666,995,606
693,759,477
664,806,386
2,189,220
691,108,881
2,650,596
666,995,606
693,759,477
Attributable to:
Equity holders of the parent
Non-controlling interests
5
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
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
Balance as of
January 1, 2009
Capital increase
Comprehensive income
for the year
Dividends distribution
Allocation of net
profit for the year
Balance as of
December 31, 2009
Capital
SYP
3,250,000,000
455,000,000
-
Legal
reserve
SYP
Special
reserve
SYP
288,439,687
-
288,439,687
-
-
-
-
Attributable to equity holders of the parent
Accumulated
changes
General
in fair value of
reserve for
available for sale
Net profit
credit risk
financial assets
for the year
SYP
SYP
SYP
-
96,871,335
96,871,335
79,699,745
3,705,000,000
385,311,022
385,311,022
79,699,745
2,500,000,000
750,000,000
174,041,976
-
174,041,976
-
-
-
3,250,000,000
-
-
114,397,711
114,397,711
-
288,439,687
288,439,687
-
32,555,000
(
807,500 )
31,747,500
32,555,000
32,555,000
-
Realized
retained
earnings
SYP
(
665,613,886
Unrealized
accumulated
losses
SYP
594,612,883 (
455,000,000 )
-
126,174,119)
-
4,327,873,138
-
78,926,783
-
4,406,799,921
-
664,806,386
2,189,220
666,995,606
358,343,054
-
497,955,937
(
92,345,702)
4,992,679,524
81,116,003
5,073,795,527
-
1,045,107,738 (
( 750,000,000 )
106,427,433)
-
3,786,764,257
-
76,276,187
-
3,863,040,444
-
( 150,000,000 )
-
-
( 658,553,881 )
449,505,145 (
19,746,686)
-
594,612,883 (
126,174,119)
-
( 150,000,000)
691,108,881
4,327,873,138
6
Total
equity
SYP
( 665,613,886 )
658,553,881
33,828,417
Total equity
attributable to
equity holders Non-controlling
of the parent
interests
SYP
SYP
-
(
2,650,596
78,926,783
-
150,000,000 )
693,759,477
4,406,799,921
CONSOLIDATED STATEMENT OF CASH FLOWS
2010
2009
SYP
SYP
Notes
Cash flows from operating activities
Profit for the year before income tax
Adjustments to reconcile income to net cash
(used in) / provided by operating activities
Unrealized gain on held for trading
financial assets
Gain on disposal of property and equipment
Gain on disposal of financial assets
available for sale
Additions / (write-backs) of
miscellaneous provision
13
14
35
31
(
Changes in operating assets and liabilities
Compulsory cash reserve
Deposits with banks
(with maturity above 3 months)
Direct credit facilities
Other assets
Cash margins
Customers’ deposits
Other liabilities
Payments of end of service indemnity
Income tax paid
Net cash (used in) / provided by operating
activities
1,125,454,663
192,202,120
13,888,946
229,234,522
159,468,926
13,707,628
229,132,526
11,703,067 ) (
(
-
Profit before changes in operating
assets and liabilities
Net cash (used in) / provided by operating
activities before income tax
1,004,002,436
(
9,677,040 )
409,684 )
(
36,098,310 )
28,904,170 (
76,161,896 )
1,456,529,127
1,405,416,813
1,063,561,101 ) (
1,444,946,601 )
(
(
4,642,191,670 )
2,117,731,984
8,948,779,933 ) ( 1,674,034,200 )
20,253,619
331,929,611
(
340,798,702 ) (
731,808,589 )
12,025,984,734
13,323,353,211
218,563,541
393,663,627
(
3,011,729 )
21-E
(
(
1,274,000,385 )
13,718,294,127
343,247,415 ) (
386,359,300 )
(
1,617,247,800 )
13,331,934,827
7
CONSOLIDATED STATEMENT OF CASH FLOWS / CONTINUED
2010
2009
SYP
SYP
Notes
Cash flows from investing activities
Loans and advances to banks
Financial assets- held to maturity
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
Purchase of available for sale financial assets
14
(
(
(
150,000,000
1,491,403,713 )
622,059,415 ) (
10,279,157 ) (
350,000,000
583,585,498 )
12,983,315 )
10
(
(
(
45,500,000 ) (
24,020,148 )
7,314,030 )
600,000
145,727,538 )
58,346,310
(
2,050,576,463 ) (
333,350,041 )
(
1,150,650 ) (
147,378,636 )
(
1,150,650 ) (
147,378,636 )
3,334,354 (
1,159,901 )
12
Net cash used in investing activities
Cash flows from financing activities
Dividends paid
Net cash used in financing activities
Difference in exchange rate of financial assets
Net (decrease)/ increase in cash and cash equivalent
(
3,665,640,559 )
12,850,046,249
Cash and cash equivalent at the beginning of year
38
37,718,513,515
24,868,467,266
Cash and cash equivalent at the end of year
38
34,052,872,956
37,718,513,515
8
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
YEAR ENDED DECEMBER 31, 2010
1.
FORMATION AND ACTIVITIES OF THE BANK
Banque Bemo Saudi Fransi S.A. 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, 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 3,705,000,000 divided into
7,410,000 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 36 branches spread around Syria.
On November 5, 2007, Monetary and Credit Council circular number 324/MN/B4 was approved, 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
company’s capital.
On March 29, 2011, the Chief Executive Officer and audit committee, on behalf of the board of
directors, have approved the consolidated financial statements for the year ended December 31, 2010.
2.
ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS
(IFRSs)
2.1
Standards and Interpretations effective for the current period with no effect on the
financial statements
The following new and revised standards, interpretations have been adopted in the current period 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 IFRS 5 Non-current Assets Held for Sale and Discontinued Operations (as part of
Improvements to IFRSs issued in 2009)
The amendments to IFRS 5 clarify that the disclosure requirements in IFRSs other than IFRS 5 do not apply to
non-current assets (or disposal groups) classified as held for sale or discontinued operations unless those IFRSs
require (i) specific disclosures in respect of non-current assets (or disposal groups) classified as held for sale or
discontinued operations, or (ii) disclosures about measurement of assets and liabilities within a disposal group that
are not within the scope of the measurement requirement of IFRS 5 and the disclosures are not already provided
in the consolidated financial statements.
Amendments to IAS 1 Presentation of Financial Statements (as part of Improvements to IFRSs issued in
2009)
The amendments to IAS 1 clarify that the potential settlement of a liability by the issue of equity is not relevant to
its classification as current or non-current.
9
Amendments to IAS 7 Statement of Cash Flows (as part of Improvements to IFRSs issued in 2009)
The amendments to IAS 7 specify that only expenditures that result in a recognised asset in the statement of
financial position can be classified as investing activities in the statement of cash flows. The application of the
amendments to IAS 7 has resulted in a change in the presentation of cash outflows in respect of development
costs that do not meet the criteria in IAS 38 Intangible Assets.
Amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards – Additional
Exemptions for First-time Adopters
The amendments provide two exemptions when adopting IFRSs for the first time relating to oil and gas assets,
and the determination as to whether an arrangement contains a lease.
Amendments to IFRS 2 Share-based Payment – Group Cash-settled Share-based Payment Transactions
The amendments clarify the scope of IFRS 2, as well as the accounting for group cash-settled share-based
payment transactions in the separate (or individual) financial statements of an entity receiving the goods or
services when another group entity or shareholder has the obligation to settle the award.
Amendments to IFRS 5 Non-current Assets Held for Sale and Discontinued Operations (as part of
Improvements to IFRSs issued in 2008)
The amendments clarify that all the assets and liabilities of a subsidiary should be classified as held for sale
when the Group is committed to a sale plan involving loss of control of that subsidiary, regardless of whether
the Group will retain a non-controlling interest in the subsidiary after the sale.
Amendments to IAS 39 Financial Instruments: Recognition and Measurement – Eligible Hedged Items
The amendments provide clarification on two aspects of hedge accounting: identifying inflation as a hedged
risk or portion, and hedging with options.
IFRIC 17 Distributions of Non-cash Assets to Owners
The Interpretation provides guidance on the appropriate accounting treatment when an entity distributes assets
other than cash as dividends to its shareholders.
IFRIC 18 Transfers of Assets from Customers
The Interpretation addresses the accounting by recipients for transfers of property, plant and equipment from
‘customers’ and concludes that when the item of property, plant and equipment transferred meets the definition
of an asset from the perspective of the recipient, the recipient should recognise the asset at its fair value on the
date of the transfer, with the credit being recognised as revenue in accordance with IAS 18 Revenue.
Improvements to IFRSs issued in 2009
The application of Improvements to IFRSs issued in 2009 has not had any material effect on amounts reported
in the consolidated financial statements.
10
2.2
New and revised IFRSs in issue but not yet effective
The Bank has not early applied the following new and revised IFRSs that have been issued but are not yet
effective:
Effective for the period starting
from
New and revised IFRS’s
Amendments to IFRS 1 that relate to Limited Exemption
from Comparative IFRS 7 Disclosures for First-time
Adopters
July 1, 2010
Amendments to IFRS 7 Disclosures – Transfers of
Financial Assets
July 1, 2011
Amendments to IFRS 9 Financial Instruments (revised in
2010)*
January 1, 2013
IAS 24 (as revised in 2009) Related Party Disclosures
January 1, 2011
Amendments to IAS 32 Classification of Rights Issues
February 1, 2011
Amendments to IFRIC 14 Prepayments of a Minimum
Funding Requirement
January 1, 2011
IFRIC 19 Extinguishing Financial Liabilities with Equity
Instruments
July 1, 2010
Improvements to IFRSs issued in 2010 –
Amendments to: IFRS 1; IFRS 3; IFRS 7; IAS1;
IAS 27; IAS34; IFRIC 13
January 1, 2011 except for
IFRS 3 and IAS 27 that are
effective on July 1, 2010
(*) 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.
IFRS 9 requires all recognized financial assets that are within the scope of IAS 39 Financial Instruments:
Recognition and Measurement to be subsequently measured at amortized cost or fair value. Specifically, debt
investments that are held within a business model whose objective is to collect the contractual cash flows, and that
have contractual cash flows that are solely payments of principal and interest on the principal outstanding are
generally measured at amortized cost at the end of subsequent accounting periods. All other debt investments and
equity investments are measured at their fair values at the end of subsequent accounting periods.
The most significant effect of IFRS 9 regarding the classification and measurement of financial liabilities relates
to the accounting for changes in 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. Specifically, under IFRS 9, 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 recognized 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 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
recognized in profit or loss.
11
Management anticipates that these IFRSs and amendments will be adopted in the Bank’s consolidated financial
statements for the initial period when they become effective. On a primary assessment the application of IFRS 9
in the first period of its application may have some impact in respect of Bank’s financial assets and financial
liabilities; the quantification of the impact is possible only on completion of a detailed review of the IFRS.
Management is in the process of considering and assessing the potential impact of the adoption of the other
Standards and amendments.
3.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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,
2010. 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.
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 noncontrolling interests are adjusted and the fair value of the consideration paid or received is
recognized directly in equity and attributed to owners of the Company.
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. consists of Bemo Saudi Fransi Finance S.A.
as of December 31, 2010.
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 company and other
clients. The Bank owns 74.67% of its subsidiary.
Statement of compliance
The consolidated financial statements were prepared in accordance with International Financial
Reporting Standards, the prevailing local regulations and the instructions and decisions of Monetary
and Credit Council.
12
Basis of preparation
The consolidated financial statements have been prepared on historical cost basis except as
specified below. Historical cost is generally based on the fair value of the consideration given in
exchange for assets.
- Available for sale financial assets are measured at fair value
- Financial assets- held-for-trading are measured at fair value
- Financial assets held to maturity are measured at amortized cost
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.
Significant accounting policies adopted
A.
Financial assets and Liabilities
Recognition and Derecognition
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.
The Bank derecognizes a financial asset when the contractual rights to the cash flows from the asset
expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a
transaction in which all the risks and rewards of ownership of the financial asset are transferred.
The Bank derecognizes a financial liability when its contractual obligations are discharged, cancelled
or expire.
Offsetting
Financial assets and liabilities are offset and reported net in the consolidated statement of financial
position only when there is a legally enforceable right to set off the recognized amounts and when
the Bank intends to settle either on a net basis, or to realize the asset and settle the liability
simultaneously.
13
Fair Value Measurement
Fair values of financial instruments quoted in active markets are determined from quoted prices. On
the other hand, fair values of financial instruments that are not quoted in active markets are
determined by using valuation techniques. These valuation techniques include net present value
analysis, discounted cash flow analysis and comparison with similar instruments where market
observable prices exist.
Impairment of Financial Assets
Financial assets, other than those at fair value through profit or loss, are assessed for indicators of
impairment at each statement of financial position date. In determining whether an impairment loss
should be recorded, the Bank makes judgments as to whether there are any observable indications
of a measurable decrease in the estimated future cash flows.
Impairment losses on assets carried at amortized cost are measured as the difference between the
carrying amount of the financial assets and the present value of estimated future cash flows
discounted at the original effective interest rate. Losses are recognized in profit or loss and the
carrying amount of the asset is reduced to its estimated recoverable amount. 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 investment at the date
the impairment is reversed, does not exceed what the amortized cost would have been amounted if
the impairment has not been recognized.
When an AFS financial assets is considered to be impaired, cumulative gains or losses previously
recognized in other comprehensive income are reclassified to profit or loss.
With the exception of AFS equity instruments, if in a subsequent period, the amount of the
impairment loss decreases and the decrease can be related objectively to an event occurring after the
impairment was recognised, the previously recognised impairment loss is reversed through profit or
loss to the extent that the carrying amount of the investment at the date the impairment is reversed
does not exceed what the amortised cost would have been had the impairment not been recognised.
In respect of AFS equity securities, impairment losses previously recognized in profit or loss are not
reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is
recognized in other comprehensive income.
B.
Foreign currencies
Transactions in foreign currencies including revenues and expenses, are translated to Syrian
Pounds using rates of exchange prevailing at the transactions’ dates. Monetary assets and
liabilities denominated in foreign currencies are translated into Syrian Pounds, at the exchange
rates prevailing at year-end as published by Central Bank of Syria. The exchange rate as of
December 31, 2010 was USD 1 is equivalent to SYP 46.85 and EUR 1 is equivalent to SYP 61.99
(compared to USD 1 is equivalent to SYP 45.65 and Euro 1 is equivalent to SYP 65.86 as of
December 31, 2009). Translation gains and losses are included in the determination of net income.
The cash flows generated from or used in different activities as shown in the consolidated
statement of cash flows were translated to Syrian Pounds using rates of exchange prevailing at the
end of accounting period.
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.
14
C.
Property and equipment
Property and equipment are carried at historical cost and impairment loss, if any. Depreciation is
charged to income statement so as to write off the depreciable amount of property and equipment over their
estimated useful lives using the straight-line method. The depreciable amount is the cost of an asset less its
residual value. Land is not depreciated. Estimated useful lives are as follows:
%
Buildings
Office equipment and furniture
Vehicles
Computer equipment
Leasehold improvement
5
10-20
20
20
20
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.
Capital work in progress is stated at cost. When the asset is ready for use, capital work in progress
is transferred to the appropriate property and equipment category and depreciated in accordance
with the Bank’s policies.
D.
Intangible assets
Intangible assets are carried at historical cost less subsequent accumulated amortization and
impairment losses, if any.
Intangible assets are amortized over their estimated useful lives, using the straight-line method at
the following rates:
Key money
Software
E.
%
5
20
Impairment of tangible and intangible assets
At each consolidated statement of financial position date, 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.
15
F.
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 end-of-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.
G.
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.
H.
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.
The effective interest method is a way of calculating the amortized cost of a financial asset or a
financial liability and of allocating the interest income or interest expense over the expected life of
the asset or liability.
The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments
through the expected life of the financial instrument or, where appropriate, a shorter period, to the
net carrying amount of the financial asset or financial liability. When calculating the effective
interest rate, the Bank estimates cash flows considering all contractual terms of the financial
instrument but not future credit losses. The calculation includes all amounts paid or received by the
Bank that are an integral part of the effective interest rate of a financial instrument, including
transaction costs and all other premiums or discounts.
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 not recognized as the related services are performed.
Dividend income is recognized when the right to receive payment is established.
I.
Loans and advances
Loans and advances to banks and customers include loans and advances originated by the Bank
which are not classified either as available for sale or as held for trading or designated at fair value
through profit and loss. They are non-derivative financial assets originated or acquired by the Bank
with fixed or determinable payments that are not quoted in an active market and that the Bank does
not intend to sell immediately or in the near term. They are recognized when cash is advanced to
borrowers and derecognized when either borrowers repay their obligations, or the loans are sold or
written off, or substantially all the risks and rewards of ownership are transferred. They are
initially recorded at fair value plus any directly attributable transaction costs and are subsequently
measured at amortized cost using the effective interest method, less impairment losses. Bad and
doubtful debts are carried on a cash basis because of doubts and the probability of non-collection
of principal and/or interest.
16
Loan impairment
Losses for impaired loans and advances are recognized promptly when there is an objective
evidence that impairment of a loan or portfolio of loans has occurred. Impairment allowances are
calculated on individual loans and on group of loans assessed collectively. Impairment losses are
recorded as charges to the income statement. The carrying amount of impaired loans on the
statement of financial position is reduced through the use of impairment allowance account.
Losses expected from future events are not recognized.
Individually assessed loans and advances
Individually assessed loans mainly represent individually significant corporate and commercial
loans which are assessed individually in order to determine whether there exists any objective
evidence that a loan is impaired. The Bank assesses whether there is any objective evidence that a
loan is impaired for each of these loans on a case-by-case basis at the end of each reporting period.
For those loans where objective evidence of impairment exists, impairment losses are determined
considering the following factors:
The amount of impairment loss is measured as the difference between the loan’s carrying amount
and the present value of estimated future cash flows excluding future credit losses that have not
been incurred, including amounts recoverable from guarantees and collateral, discounted at the
loan’s original effective interest rate. The amount of the loss is recognized using an allowance
account and is included in the consolidated income statement line “impairment allowances”. If a
loan has a floating interest rate, the discount rate for measuring any impairment loss is the current
effective interest rate determined when the loan became delinquent under the contract.
If the amount of an impairment loss decreases in a subsequent period, and the decrease can be
related objectively to an event occurring after the impairment was recognized, the excess is written
back by reducing the loan impairment allowance account accordingly. The write-back is
recognized in the consolidated income statement in the period in which it occurs.
J.
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.
K.
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.
17
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.
L.
Dividends
Dividends for ordinary shares are recognized as a liability and are deducted of equity when the
General Assembly of Shareholders approves them. Proposed dividends are disclosed after the date of
the consolidated statement of financial position.
M.
Derivative financial instruments and hedge accounting
The Bank enters into a variety of derivative financial instruments to manage the exposure to interest
risks, foreign exchange rate risks, and credit risks including those derived from future potential
transactions.
At the inception of the hedge relationship, Bank 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 a quarterly
basis, the Bank documents whether the hedging instrument that is used in a hedging relationship is
highly effective in offsetting the risks of the hedged items. The hedging is highly effective if the
changes in fair value or the cash flows related to the hedged risks, is expected to offset the risk of
loss within 80% to 125% range.
In cases where the hedged item is a forecasted transaction, the Bank measures if this transaction has
a high possibility of occurrence in the future. For hedge accounting purposes, derivatives are
presented at fair value. The hedge classifications are as follows:
Fair value hedges
Hedges of the change in fair value of the Bank’s assets and liabilities.
Where a hedging relationship is designated as a fair value hedge, the hedged item is adjusted for the
change in fair value in respect of the risk being hedged. Gains or losses on the changes in fair value
of both the derivative and the hedged item are recognized in the consolidated income statement. The
gains or losses on the hedged item attributable to the hedged risk is recognized in the consolidated
income statement and adjusts the carrying amount of the hedged item.
Cash flow hedges
Hedges of the variability in cash flows from the’s assets and liabilities.
The effective portion of changes in the fair value of derivatives that are designated and qualify as
cash flow hedges are recognized in other comprehensive income within equity. The ineffective
part of any gain or loss is recognized immediately in the consolidated income statement. Amounts
accumulated in equity are transferred to the consolidated income statement in the periods in which
the hedged item affects profit or loss, in the same line of the consolidated income statement as the
recognized hedged item.
18
Net investment in foreign currency hedges
Hedges of net investments in foreign currencies.
Hedges of net investments in foreign operations are accounted for in a similar way to cash flow
hedges. A gain or loss on the effective portion of the hedging instrument is recognized in other
comprehensive income within net investment hedge reserve. The gain or loss relating to the
ineffective portion is recognized immediately in the consolidated income statement. Gains and
losses accumulated in equity are included in the consolidated income statement on the disposal of
the foreign operation.
N.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances with original maturity of less than 3 months, and
include: cash on hand, 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).
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.
19
(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.
5.
CASH AND BALANCES WITH CENTRAL BANK OF SYRIA
This caption includes the following:
2010
SYP
Cash on hand
Balances with Central Bank of Syria
Current accounts and demand deposits
Compulsory reserve
Blocked account with Central Bank of Syria
December 31,
2009
SYP
3,475,954,433
3,185,069,612
22,278,159,555
10,416,059,810
18,449,968
22,498,019,531
9,334,601,016
36,347,661
36,188,623,766
35,054,037,820
Banking laws and regulations require banks to maintain cash compulsory reserve with Central Bank of
Syria in the form of deposits, equal to 10% of average on demand, saving and term deposits excluding
housing deposit accounts as per (Circular No. 389/MN/B4) issued by Monetary and Credit Council on
May 5, 2008, and (Circular No. 666/MN/B4) issued on May 27, 2010. This reserve is compulsory and
cannot be used in the Bank’s operating activities.
6.
BALANCES WITH BANKS
This caption comprises the following:
Term deposits (with original maturity
of three months or less)
Resident banks
SYP
1,174,440,549
1,174,440,549
of three months or less)
Resident banks
SYP
794,192,261
794,192,261
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
December 31, 2009
Non-resident banks
SYP
Total
SYP
1,796,575,673
2,590,767,934
10,372,810,000
10,372,810,000
12,169,385,673
12,963,577,934
Non-interest balances with banks amounted to SYP 1,657,296,527 as of December 31, 2010 (compared
to SYP 1,214,332,902 as of December 31, 2009).
Blocked accounts with banks amounted to SYP 10,765,602 as of December 31, 2010 (compared to SYP
10,465,311 as of December 31, 2009).
20
7.
DEPOSITS WITH BANKS
over three months)
over three months)
8.
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
Resident banks
SYP
December 31, 2009
Non-resident banks
SYP
Total
SYP
803,489,736
21,577,426,758
22,380,916,494
803,489,736
21,577,426,758
22,380,916,494
FINANCIAL ASSETS HELD-FOR-TRADING
2010
SYP
Shares
Bonds listed in foreign markets
21
December 31,
2009
SYP
26,090,761
321,501,234
319,527,579
347,591,995
319,527,579
9.
NET DIRECT CREDIT FACILITIES
2010
SYP
Corporate
Overdrafts
Loans and advances
Unearned interest on loans
Discounted bills
Unearned interest on discounted bills
(
(
December 31,
5,632,413,248
6,469,502,062
189,782,155 ) (
3,862,439,632
436,907,423 ) (
15,337,665,364
Small & medium size enterprises
Overdrafts
Loans and advances
Discounted bills
Unearned interest on discounted bills
(
(
Government & public sector
Loans and advances
7,836,628,360
6,408,845,934
37,857,406,532
Provision for impairment of direct credit facilities
Suspended interest
(
(
Net direct credit facilities
805,098,657 ) (
197,866,950 ) (
36,854,440,925
22
12,477,193,754
2,741,089,023
2,644,863,092
141,793,191 )
1,328,373,424
163,686,414 )
10,485,713,447
45,354,225
(
62,954,864 ) (
10,468,112,808
Total
6,100,094,962
3,155,350,115
117,897,965 )
3,809,004,314
469,357,672 )
2,634,932,506
3,993,055,746
166,514,710 ) (
1,550,548,103
175,393,285 ) (
4,215,000,000
Retail
Loans and advances
Credit cards
2009
SYP
9,989,061,088
31,622,665
93,244,441 )
9,927,439,312
28,813,479,000
539,220,780 )
102,719,351 )
28,171,538,869
The movement of the provision for impairment of direct credit facilities is as follows:
Corporate
SYP
Balance at the beginning of the year
Additions during the year
Balance at the end of the year
Balance – beginning of the year
Individual impairment
Collective impairment
Change during the year
Additions:
Recoveries:
Collective Impairment
Balance – end of the year
Balance at the beginning of the year
Balance at the end of the year
Change during the year
Additions:
Recoveries:
Collective Impairment
(
(
2010
Retail
SYP
Total
SYP
438,760,965
164,261,484
603,022,449
100,459,815
101,616,393
202,076,208
539,220,780
265,877,877
805,098,657
373,377,462
65,383,503
438,760,965
100,459,815
100,459,815
473,837,277
65,383,503
539,220,780
263,333,712
-
101,616,393
-
364,950,105
-
77,417,726)
21,654,502)
164,261,484
101,616,393
559,293,447
43,729,002
202,076,208
-
761,369,655
43,729,002
603,022,449
202,076,208
805,098,657
Corporate
SYP
314,277,954
124,483,011
438,760,965
277,469,500
36,808,454
314,277,954
299,459,594
28,575,049
( 203,551,632)
124,483,011
2009
Retail
SYP
100,459,815
100,459,815
100,459,815
100,459,815
(
(
77,417,726)
21,654,502)
265,877,877
Total
SYP
314,277,954
224,942,826
539,220,780
277,469,500
36,808,454
314,277,954
399,919,409
28,575,049
( 203,551,632)
224,942,826
373,377,462
65,383,503
100,459,815
-
473,837,277
65,383,503
438,760,965
100,459,815
539,220,780
23
The movement of suspended interest is as follows:
2010
SYP
Write-backs during the year
(
December 31,
102,719,351
182,776,391
87,628,792 )
(
197,866,950
2009
SYP
94,624,673
70,889,215
62,794,537 )
102,719,351
Non-performing direct credit facilities amounted to SYP 2,606,795,326 as of December 31, 2010
representing 6.89% of total direct credit facilities balance (compared to SYP 1,683,286,209 as of
December 31, 2009 representing 5.84% of total direct credit facilities balance).
Non-performing direct credit facilities after deducting suspended interest amounted to SYP
2,408,928,376 as of December 31, 2010 representing 6.40% of total direct credit facilities balance after
deducting suspended interest (compared to SYP 1,580,566,858 as of December 31, 2009 representing
5.51% of total direct credit facilities balance after deducting suspended interest).
Credit facilities granted to the public sector amounted to SYP 4,215,000,000 as of December 31, 2010
representing 11.13% of total direct credit facilities. The government guarantees public sector facilities.
Non-performing indirect credit facilities amounted to SYP 139,524,931 as of December 31, 2010
(compared to SYP 134,802,271 as of December 31, 2009). The provision for indirect non- performing
facilities amounted to SYP 24,549,043 as of December 31, 2010 (compared to SYP 64,293,572 as of
December 31, 2009) which is presented under miscellaneous provisions (Note 20).
10.
AVAILABLE–FOR–SALE FINANCIAL ASSETS
2010
SYP
Unquoted financial assets
Shares
December 31,
7,314,030
Quoted financial assets
Equity securities
2009
SYP
-
84,830,000
75,055,000
92,144,030
75,055,000
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 gain on available
for sale equity securities amounted to SYP 9,775,000 as of December 31, 2010 (compared to SYP
32,555,000 as of December 31, 2009).
24
11.
LOANS AND ADVANCES TO BANKS
2010
SYP
Certificates of deposit from a local bank
December 31,
2009
SYP
-
150,000,000
-
150,000,000
Certificates of deposits are issued by the Real Estate Bank in Syria and have the following maturities:
December 31, 2009
Maturity date
Number
January 14, 2010
November 13, 2010
1
2
Nominal value
SYP
Total value
SYP
50,000,000
50,000,000
50,000,000
100,000,000
3
12.
Nominal
interest rate
%
10
10
150,000,000
FINANCIAL ASSETS – HELD TO MATURITY
2010
SYP
Unquoted financial assets
Local treasury bills
Quoted financial assets
Treasury bills – foreign government
Certificates of deposit – non-resident banks
2009
SYP
99,443,363
-
454,960,350
937,000,000
-
1,491,403,713
-
Treasury bills analysis
2010
SYP
Fixed rate
Floating rate
December 31,
December 31,
554,403,713
937,000,000
1,491,403,713
2009
SYP
-
Local treasury bills are unquoted bills with fixed rate. These bills are held to maturity and are priced as
follows:
2010
SYP
Nominal value
Discount
(
25
December 31,
2009
SYP
100,000,000
556,637 )
-
99,443,363
-
Local treasury bills were obtained on December 22, 2010 and were issued by Central Bank of Syria as
shown below:
Issuer: Central Bank of Syria
Type: Treasury bills
Classification: Treasury bills held to maturity
Nominal value: SYP 100,000,000
Discount price: SYP 556,637
Coupon rate: 1.44%
Yield to maturity: 2%
Maturity date: December 23, 2011
Non-resident treasury bills represent quoted bills with fixed rate. These bills are held to maturity and are
priced as follows:
2010
USD
Nominal value
Premium
Value in SYP based on the exchange rate at year end
December 31,
2009
USD
9,000,000
711,000
9,711,000
-
454,960,350
-
Treasury bills- foreign government were obtained on December 15, 2010 as follows:
Issuer: Julios Bär
Type: Treasury bills (State of Qatar)
Classification: treasury bills held to maturity
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 is comprised as follows:
Maturity date
Nominal value (USD)
Interest rate
August 6, 2012
10,000,000
3m Libor + 110BP
December 24, 2012
10,000,000
3m Libor + 110BP
20,000,000
Value in SYP based on the
exchange rate at year end
937,000,000
Accrued interest receivable on certificates of deposit amounted to SYP 1,147,876 as of
December 31, 2010. This balance is classified under other assets in the consolidated statement of financial
position.
26
13.
PROPERTY AND EQUIPMENT
Buildings
SYP
Historical Cost:
Balance as of January 1, 2010
Additions
Transfer
Balance as of December 31, 2010
909,951,706
21,043,079
75,533,350
1,006,528,135
Office
equipment
and furniture
SYP
December 31, 2010
Computer
equipment
SYP
Vehicles
SYP
Leasehold
improvement
SYP
Total
SYP
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
315,697,558
49,417,117
6,620,125
371,734,800
45,088,199
13,645,700
58,733,899
233,958,114
33,754,184
62,000
267,774,298
97,549,646) (
42,084,892) (
139,634,538) (
76,504,006) (
36,895,700) (
113,399,706) (
14,877,821) (
11,151,420) (
26,029,241) (
111,377,216) ( 148,036,021) (
35,747,443) ( 66,322,665) (
147,124,659) ( 214,358,686) (
866,893,597
258,335,094
32,704,658
120,649,639
Accumulated Depreciation:
Additions, year charges
(
(
(
448,344,710)
192,202,120)
640,546,830)
Net Book Value:
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
27
32,704,658
(
62,000
31,581,105
62,000) ( 31,581,105) (
267,948,719
477,873,988
113,796,580)
-
-
632,026,127
120,649,639
203,251,459
2,113,860,574
Historical Cost:
Additions
Disposals
Transfer
December 31, 2009
Buildings
SYP
Office
equipment
and furniture
SYP
Vehicles
SYP
725,899,720
137,078,188
46,973,798
909,951,706
237,932,000
71,443,763
6,321,795
315,697,558
24,433,099
21,797,000
( 1,141,900)
45,088,199
( 47,763,667)
( 28,740,339)
( 76,504,006)
( 8,111,305)
( 7,718,100)
951,584
( 14,877,821)
239,193,552
30,210,378
Computer
equipment
SYP
176,588,535
57,369,579
233,958,114
Leasehold
improvement
SYP
Total
SYP
246,795,180 1,411,648,534
35,519,935
323,208,465
(
1,141,900)
77,388,578
130,684,171
359,703,693 1,864,399,270
Accumulated Depreciation:
Disposals
(
(
65,063,626)
32,486,020)
97,549,646)
(
(
(
78,330,163) ( 90,558,607) ( 289,827,368)
33,047,053) ( 57,477,414) ( 159,468,926)
951,584
( 111,377,216) (148,036,021) ( 448,344,710)
Net Book Value:
812,402,060
122,580,898
211,667,672
1,416,054,560
Advance payments on purchase of property and equipment:
Additions
Transfers
Net property and equipment
54,545,484
260,377,033
( 46,973,798)
267,948,719
1,080,350,779
6,321,795
( 6,321,795)
-
-
-
-
-
-
239,193,552
30,210,378
122,580,898
211,667,672
28
77,388,578
138,255,857
260,377,033
( 77,388,578) (130,684,171)
267,948,719
1,684,003,279
14.
INTANGIBLE ASSETS
Software
SYP
Historical cost:
Additions
Additions
Accumulated amortization:
Key money
SYP
32,532,551
12,983,315
45,515,866
10,279,157
55,795,023
(
(
(
(
(
20,298,760)
6,486,633)
26,785,393)
6,586,284)
33,371,677)
Total
SYP
146,053,241
146,053,241
146,053,241
(
(
(
(
(
21,062,732)
7,220,995)
28,283,727)
7,302,662)
35,586,389)
178,585,792
12,983,315
191,569,107
10,279,157
201,848,264
(
(
(
(
(
41,361,492)
13,707,628)
55,069,120)
13,888,946)
68,958,066)
Net book value:
22,423,346
110,466,852
132,890,198
18,730,473
117,769,514
136,499,987
15.
OTHER ASSETS
2010
SYP
December 31,
2009
SYP
Accrued interest receivables from
Central Bank of Syria
Banks and financial institutions
Direct credit facilities – corporate
Direct credit facilities – retail
Certificates of deposit
80,549,357
19,342,561
124,036,408
1,147,876
108,374,672
73,932,396
40,107,793
27,295,131
34,007,420
Prepaid expenses
Due from ATM agent
Advances to service suppliers
Cash margins from VISA cards agent
Amounts under collection
Due from related parties (Note 39)
Advances to employees
VISA cards license
Other debit balances
225,076,202
230,281,415
77,443,495
33,083,822
12,252,655
9,789,140
5,679,323
4,853,937
3,549,000
96,199,412
283,717,412
201,660,031
15,296,001
23,792,374
11,914,020
55,777,372
31,129,589
5,871,241
3,549,000
85,754,980
698,208,401
718,462,020
29
16.
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, which is
refunded on the date of liquidation of the Bank.
This blocked deposit at Central Bank of Syria caption comprises the following:
2010
SYP
Balances in SYP
Balances in USD
17.
December 31,
2009
SYP
189,241,950
168,833,543
143,741,950
164,509,098
358,075,493
308,251,048
BANKS'DEPOSITS
of 3 months or less)
30
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
Resident
banks
SYP
December 31, 2009
Non-resident
banks
SYP
699,258,095
186,930,967
886,189,062
-
41,964,500
41,964,500
699,258,095
228,895,467
928,153,562
Total
SYP
Total
SYP
18.
CUSTOMERS’ DEPOSITS
2010
SYP
Corporate
Term deposits
Saving accounts
Small and medium enterprises
Term deposits
Saving accounts
Retail
Term deposits
Saving accounts
Total
December 31,
2009
SYP
10,064,663,390
1,041,367,730
15,927,988
12,491,288,233
637,320,330
2,332,345
11,121,959,108
13,130,940,908
11,995,552,167
1,173,265,232
15,777,680
5,737,208,550
2,554,438,306
17,142,428
13,184,595,079
8,308,789,284
45,551,121,063
30,294,074,770
3,408,725,758
37,030,592,459
30,269,124,466
2,795,043,927
79,253,921,591
70,094,760,852
103,560,475,778
91,534,491,044
Public sector’s deposits amounted to SYP 867,197,457 representing 0.84% of total deposits as of
December 31, 2010 (compared to SYP 116,497,335 representing 0.13% of total deposits as of December
31, 2009).
Non-interest bearing deposits amounted to SYP 33,198,630,424 representing 32.06% of total deposits as
of December 31, 2010 (compared to SYP 26,403,701,819 representing 28.84% of total deposits as of
December 31, 2009).
19.
CASH MARGINS
2010
SYP
Cash margins against direct credit facilities
Cash margins against indirect credit facilities
31
December 31,
2009
SYP
1,126,618,515
1,594,698,482
1,268,525,139
1,793,590,560
2,721,316,997
3,062,115,699
20.
MISCELLANEOUS PROVISIONS
Miscellaneous provisions movement is as follows:
December 31, 2010
Provision for liabilities arising
from financial guarantees
Provision for operating
foreign exchange position
Tax penalties provisions
Other provisions
Balance at
beginning
of year
SYP
64,293,572
2,822,956
348,512
67,465,040
December 31, 2009
End of service provision
Provision for operating
foreign exchange position
Tax penalties provisions
Other provisions
Provided
during
the year
SYP
-
(
1,499,111
34,132,000
-
4,189,700
-
2,941,981
31,074,826
348,512
-
(
Balance as of
year end
SYP
36,643,355 )
24,549,043
(
3,625,767 )
-
696,300
34,132,000
348,512
3,101,174 ) (
40,269,122 )
59,725,855
3,011,729 ) (
44,968,045 )
64,293,572
-
(
(
119,025 )
31,074,826 )
-
2,822,956
348,512
3,011,729 ) (
76,161,896 )
67,465,040
-
4,189,700 (
Write-backs
SYP
3,101,174 ) (
-
35,631,111 (
60,103,872
47,979,774
142,448,965
Utilized
during
the year
SYP
The provision of operating foreign exchange center was calculated based on section 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 operating exchange rates centers during the month.
Salaries and wages’ taxes were reviewed by financial authorities during 2010 but the final decision was
not issued by the time the consolidated financial statements were approved. However, Management
accounted for the additional claim under tax penalties provision using their best estimates.
32
21.
INCOME TAX
A-
Income tax provision
2010
SYP
Balance at beginning of the year
Income tax paid
Income tax due
(
Balance at end of the year
2009
SYP
343,247,415
343,247,415 )
339,075,198
(
339,075,198
B- Deferred tax assets
2010
SYP
343,247,415
December 31,
Deferred tax assets during the year
Movement during the year
5,630,364
2,875,868
8,506,232
344,147,838
344,147,838 )
343,247,415
(
(
2009
SYP
84,421,672
78,191,968 )
599,340 )
5,630,364
In 2009, Management reviewed deferred tax assets due to indications of impairment and then concluded
that these assets have been impaired. Consequently, Management calculated the recoverable amount and
recognized the difference as an increase in income tax expense for the year.
C- Deferred tax liabilities
Deferred tax liabilities in 2010 consist of SYP 10,582,500 resulting from gain on revaluation of
available for sale financial assets which is booked under accumulated changes in fair value of equity.
The balance represents 25% (tax rate) of the cumulative change in fair value of available for sale
financial assets as of December 31, 2010.
Deferred tax liabilities balance comprises the following:
2010
SYP
December 31,
2009
SYP
Deferred tax liabilities during the year
10,582,500
-
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.
33
D- Reconciliation between accounting and taxable profits
2010
2009
SYP
SYP
Profit before tax
Additions:
Amortization of key money
Depreciation of buildings
Provision for exchange losses on structural position
Provision for doubtful debt
Suspended interest
Tax penalties
Deductions:
Gain on available–for–sale financial assets
Write-back of doubtful debt provisions
Gain of financial assets held for trading
Write-back of foreign exchange provision
Unrealized (gain) / loss on structural position
Revenue of associates
Taxable income
Income tax (25% of taxable income)
Prior years’ income tax
Impairment of deferred tax assets
Income tax revenue related to subsidiary
1,004,002,436
7,302,662
42,084,892
1,499,111
647,093,312
95,147,599
34,132,000
(
(
(
(
(
(
(
4,250,000 )
417,858,790 )
9,632,454 )
3,625,767 )
33,828,417 )
5,765,788 )
1,356,300,796
339,075,198
2,875,868 )
336,199,330
E- Paid income tax
1,125,454,663
(
(
(
(
(
(
7,220,995
32,486,022
229,132,526
8,094,678
31,074,826 )
3,442,500 )
9,677,040 )
119,025 )
19,746,686
4,832,516 )
1,372,989,663
343,247,415
48,441,167
78,191,968
5,630,364 )
464,250,186
2010
2009
SYP
SYP
Income tax paid on 2009 and 2008
Additional income tax paid related to prior years
34
343,247,415
-
344,147,838
42,211,462
343,247,415
386,359,300
22.
OTHER LIABILITIES
2010
SYP
Certified and payable checks
Inward transfers
Contributions payable to tax and social security
Accrued interest payable – customers’ deposits
Advances from customers
Accrued expenses
Unearned commission income
Top management and board of directors
accrued expenses
Accrued interest payables – margin accounts
Due to related parties
Dividends payable
Other credit balances
23.
December 31,
2009
SYP
985,683,597
175,506,927
149,569,342
129,310,527
126,003,460
99,329,093
58,789,746
780,050,420
263,582,511
127,122,489
128,631,354
73,291,481
76,011,068
43,744,703
43,847,697
23,852,711
18,716,886
1,676,690
30,353,928
31,104,020
28,704,617
18,297,292
2,827,340
51,860,418
1,842,640,604
1,625,227,713
CAPITAL
The Bank’s authorized, issued and fully paid capital as of December 31, 2010 was SYP 3,705,000,000
which comprises 7,410,000 shares with a par value of SYP 500 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 shares represent 22% of the Bank’s capital and are from category B.
Banque Saudi Fransi shares represent 27% of the Bank’s capital and are from category B.
On May 24, 2009 the shareholder’s general assembly approved the increase in capital as follows:
1. To allocate a portion of retained earnings amounting to SYP 750,000,000 by issuing 1,500,000
new shares with a par value of SYP 500 each. The required procedures were finalized on
October 4, 2009 by obtaining the approval of Syrian Commission on Financial Markets and
Securities to cover this increase by the allocation of retained earnings into capital on October 18,
2009.
2. The issuance of 1,000,000 new ordinary shares with a total value of SYP 500,000,000 (par value
of SYP 500 each). The approval on amending the Bank’s bylaws to include this increase was
obtained from Monetary and Credit Council on August 17, 2009. These new shares were not
issued to the public by the date of consolidated financial statements preparation.
35
On January 4, 2010, law number 3 was issued to amend some regulations included in law No. 28 for the
year 2001 and law 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.
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). Subsequent to the date of the consolidated statement of financial position,
circular No. 33 was issued on February 21, 2011 by Syrian Commission on Financial Markets &
Securities that approved this increase. These new shares were not issued to the public by the date
of consolidated financial statements preparation.
24.
LEGAL AND SPECIAL RESERVES
According to article 197 of corporate law No.3 dated March 4, 2008, 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 Money
and Credit Law, clause number 97. This reserve is not subject to distribution.
Annual net income was defined in accordance with article 200 of corporate law No.3 dated March 4, 2008,
to be equal to the difference between realized revenues and the total of expenses and depreciation before
income tax.
According to the laws mentioned above and 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:
2010
SYP
Profit before income tax
(Deduct) / Add:
Net unrealized exchange (gain) / loss
Non-controlling interests portion of subsidiary’s profit
before income tax
Legal / Special reserve 10%
25.
December 31,
1,004,002,436
(
33,828,417 )
(
1,460,666 )
2009
SYP
1,125,454,663
19,746,686
(
1,224,237 )
968,713,353
1,143,977,112
96,871,335
114,397,711
AVAILABLE FOR DISTRIBUTION RETAINED EARNINGS AND ACCUMULATED LOSSES
According to the regulations of the Central Bank of Syria and Monetary and Credit Council No. 362 for
year 2007 and No. 952/100/1 dated February 12, 2009, unrealized accumulated losses on structural
position are segregated from retained earnings.
Total retained earnings available for distribution as of December 31, 2010 amounted to SYP
405,610,235 (compared to SYP 468,438,764 as of December 31, 2009).
36
26.
ACCUMULATED CHANGE IN FAIR VALUE OF AVAILABLE- FOR- SALE FINANCIAL ASSETS
2010
SYP
Shares
Balance- beginning of the year
Unrealized gains during the year (Note 10)
Deferred tax liabilities (Note 21)
27.
(
2009
SYP
32,555,000
9,775,000
10,582,500 )
32,555,000
-
31,747,500
32,555,000
INTEREST INCOME
2010
2009
SYP
SYP
Direct facilities- corporate
Overdraft
Loans and advances
Discounted bills
Direct facilities - retail
Balances and deposits with banks
Held to maturity financial assets
28.
December 31,
692,730,461
709,178,658
523,581,593
1,037,227,292
248,415,040
10,992,580
3,604,591
832,572,240
451,531,400
506,782,856
944,365,087
524,859,702
29,665,173
-
3,225,730,215
3,289,776,458
INTEREST EXPENSE
2010
2009
SYP
SYP
Banks’ deposits
Current accounts
Saving accounts
Term deposits
Cash margins
37
1,656,817
2,673,928
231,891,513
94,738,743
789,811,137
32,432,754
202,834,282
89,012,626
977,306,907
4,056,895
1,150,530,964
1,275,884,638
29.
FEES AND COMMISSIONS INCOME
2010
2009
SYP
SYP
Commissions on direct facilities
Commissions on indirect facilities
Commissions on transfers and banking services
Miscellaneous commissions
30.
563,193,580
464,880,275
2010
2009
SYP
SYP
Commission paid to banks
Commission paid on transfers and banking services
Miscellaneous commissions
10,530,188
6,273,246
985,219
15,512,387
17,941,493
2,177,236
17,788,653
35,631,116
INCOME FROM FINANCIAL ASSETS HELD FOR TRADING
2010
2009
SYP
SYP
Unrealized revaluation gain- Bonds
Unrealized revaluation gain- Shares
32.
38,455,885
269,623,357
147,507,763
9,293,270
FEES AND COMMISSIONS EXPENSES
31.
38,704,515
292,751,212
209,510,998
22,226,855
9,632,454
2,070,613
9,677,040
-
11,703,067
9,677,040
INCOME FROM AVAILABLE FOR SALE FINANCIAL ASSETS
2010
2009
SYP
SYP
Dividend income from United Insurance Company (Note 39)
Gain on sale of available for sale financial assets
38
4,250,000
120,000
3,442,500
36,098,310
4,370,000
39,540,810
33.
OTHER OPERATING INCOME
2010
2009
SYP
SYP
Write back of accrued expenses
Write back of exchange rate provision
Damage compensation from the insurance
company to the risk insured
Write back of tax penalties provision
Other income
34.
44,968,045
119,025
1,748,544
24,375,808
31,074,826
16,664,451
12,895,293
117,202,155
SALARIES AND RELATED CHARGES
2010
2009
SYP
SYP
Salaries and related charges
Medical insurance
Top management compensation (Note 39)
Social Security
Training expenses
35.
9,020,093
2,126,656
651,137,289
14,233,997
60,310,469
93,802,519
19,128,616
528,742,391
12,527,293
85,235,997
68,153,458
18,780,653
838,612,890
713,439,792
PROVISION FOR IMPAIRMENT OF CREDIT FACILITIES
2010
2009
SYP
SYP
Direct credit facilities (Note 9)
Indirect credit facilities (Note 20)
(
39
265,877,877
36,643,355 )
224,942,826
4,189,700
229,234,522
229,132,526
36.
OTHER OPERATING EXPENSES
2010
2009
SYP
SYP
Rent
Advertising
Travel and transportation
Legal Fees
Utilities
Professional fees
Telephone and communication expenses
Maintenance
Stationery and office expenses
Credit cards expenses
Insurance
Administrative fees (Note 39)
Board of Directors'compensation (Note 39)
Cleaning and security expenses
Network and computer installation
Donations and subscriptions
Other expenses
37.
126,930,514
89,337,441
48,027,700
46,889,724
37,392,399
35,530,325
34,831,852
21,881,675
21,716,532
18,114,026
16,274,477
13,968,000
13,591,547
12,944,899
9,407,799
396,150
21,065,969
91,384,725
66,452,750
33,630,834
45,278,526
27,025,421
32,474,985
30,836,690
16,442,171
19,868,960
19,200,063
13,199,619
13,573,425
16,449,893
12,157,201
8,645,043
5,775,075
28,963,934
568,301,029
481,359,315
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:
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)
2010
2009
665,613,886
658,553,881
7,410,000
7,410,000
89,83
88,87
The weighted average number of shares as of December 31, 2010 was calculated as follows:
Period
December 31, 2009
November 29, 2010
Number of shares
Number of days
6,500,000
910,000
365
365
Weighted average
number of shares
6,500,000
910,000
7,410,000
The weighted average number of shares as of December 31, 2009 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 earnings per share is equal to diluted earnings per share in the absence of instruments issued by
the Bank that would impact earnings per share when converted.
40
38.
CASH AND CASH EQUIVALENT
2010
SYP
Cash and balances with Central Bank of
Syria (except for cash compulsory reserve)
Add: Balances with banks (with original maturity
Less: Banks'deposits (with original maturity
(
December 31,
25,754,113,988
25,683,089,143
9,452,615,093
12,963,577,934
1,153,856,125 )
34,052,872,956
39.
2009
SYP
(
928,153,562 )
37,718,513,515
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
214,035,159 that was granted to a related party and was classified as doubtful debt 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
41
2010
SYP
December 31,
2009
SYP
224,000,000
224,000,000
224,000,000
224,000,000
A- Consolidated statement of financial position items
Bank Saudi
Fransi
SYP
Financial position items
Debit balances
Current accounts
Term deposits
Credit facilities
Due from related
parties (Note 15)
Credit balances
Current accounts
Term deposits
Due to related parties (Note 22)
Dividends payable (Note 22)
Top management and BOD
accrued expenses (Note 22)
(
Off-Balance sheet items
Inward guarantees
Issued letters of guarantees
Inward letters of guarantees
Inward LCs
Issued LCs
Checks under collection
Import bills
Export bills
Top
management
SYP
Board of
directors
SYP
166,837,183
-
53,409,092
327,950,000
-
-
-
263,517,523
132,519
4,754,123
-
-
792,681
166,969,702
386,113,215
-
-
264,310,204
(
(
18,716,886)
-
44,758,239) ( 56,567,918)
80,730,000) ( 32,292,061)
-
(
3,439,847) (
-
24,509,657) (
19,338,040)
18,716,886) ( 125,488,239) ( 88,859,979) (
24,509,657) (
22,777,887) (
90,420,421
75,420,398
( 26,225,587) (
3,607,450)
805,980,335
12,641,771
( 51,917,376) (
( 38,868,946) ( 1,264,985,568)
4,061,099
19,866,228
-
(
(
Bank Bemo
SYP
December 31, 2010
United
Insurance
Company
SYP
97,073)
-
42
-
Related
parties
SYP
221,476,447
221,476,447
10,868,493)
(
10,868,493) (
( 335,000,000) ( 232,275,000)
22,767,712
( 428,350,000)
-
Shareholders
SYP
Total
SYP
-
220,246,275
327,950,000
484,993,970
-
5,679,323
-
1,038,869,568
1,676,690)
-
( 115,634,497)
( 113,022,061)
( 18,716,886)
(
1,676,690)
(
43,847,697)
1,676,690) ( 292,897,831)
-
( 567,275,000)
188,608,531
( 428,350,000)
( 29,833,037)
818,622,106
( 52,014,449)
(1,303,854,514)
23,927,327
Financial position items
Debit balances
Current accounts
Term deposits
Credit facilities
Due from related
parties (Note 15)
Credit balances
Current accounts
Term deposits
Due to related parties (Note 22)
Purchase of fixed assets
Cash margins
Dividend payable (Note 22)
Top management and BOD
accrued expenses (Note 22)
December 31, 2009
United
Insurance
Company
SYP
Top
management
SYP
Board of
directors
SYP
-
-
-
Bank Saudi
Fransi
SYP
Bank Bemo
SYP
159,455,476
244,200,000
-
181,130,175
319,550,000
-
155,191
4,398,809
23,880,962
-
2,694,627
403,810,667
505,078,984
23,880,962
-
2,694,627
(
192,158) ( 17,072,824) (129,542,865)
( 41,964,500) ( 56,803,995)
( 18,297,292)
-
-
-
-
Related
parties
SYP
699,993,241
699,993,241
( 53,042,487) ( 59,717,796)
( 6,247,640)
( 2,355,867)
(
( 25,956,870) (
5,147,150)
-
( 18,489,450) ( 59,037,324) (186,346,860) ( 25,956,870) ( 58,189,637) ( 68,321,303) (
Off-Balance sheet items
Inward guarantees
Issued letters of guarantees
Inward letters of guarantees
Inward LCs
Issued LCs
Checks under collection
Import bills
Export bills
Export commitments
101,207,361
94,030,655
( 21,514,490) ( 3,515,050)
345,949,350
192,174,068
( 11,050,509) ( 53,405,328)
( 26,780,226) (1,519,034,027)
1,118,379
23,028,686
-
-
-
43
-
( 497,000,000)
184,545,076
( 493,225,000)
( 1,219,101)
549,816
Shareholders
SYP
Total
SYP
-
340,585,651
563,750,000
699,993,241
-
31,129,589
-
1,635,458,481
( 259,568,130)
( 98,768,495)
( 18,297,292)
(
6,247,640)
(
2,355,867)
2,827,340) (
2,827,340)
-
(
31,104,020)
2,827,340) ( 419,168,784)
-
( 497,000,000)
379,783,092
( 493,225,000)
( 26,248,641)
538,123,418
( 64,455,837)
( 1,545,814,253)
24,147,065
549,816
B- Consolidated statement of comprehensive income items
Bank Saudi
Fransi
SYP
Interest income
Interest expense
Insurance expense
Salaries and bonuses
Dividends (Note 32)
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
-
Bank Saudi
Fransi
SYP
Interest income
Interest expense
Insurance expense
Salaries and bonuses
Dividends (Note 32)
Damage compensation to
the risk insured
Bank Bemo
SYP
Year ended December 31, 2010
United
Insurance
Company
SYP
Bank Bemo
SYP
Related
parties
SYP
29,132,117
-
-
-
Total
SYP
(
(
(
(
52,979,039
5,012,110)
18,931,636)
13,968,000)
73,902,016)
4,250,000
United
Insurance
Company
SYP
Top
management
SYP
Board of
directors
SYP
Related
parties
SYP
9,256,491
4,577,887
22,299
68,073,571
(
88,761) (
814,757) ( 9,679,620)
(
599,632) (
638,739)
(16,533,717)
( 13,573,425)
( 85,235,997) ( 16,449,893)
3,442,500
-
Shareholders
SYP
(24,375,808)
44
-
-
-
Shareholders
SYP
Total
SYP
-
81,930,248
( 11,821,509)
( 16,533,717)
( 13,573,425)
(101,685,890)
3,442,500
-
( 24,375,808)
C. Executive management's benefits
2010
2009
SYP
SYP
Management salaries and compensations
Board of Directors remunerations
60,310,469
13,591,547
85,235,997
16,449,893
73,902,016
101,685,890
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 7.75% to 12%.
Interest expense rate on current accounts and deposits for related parties is in the range of 0.8% to
5.25%.
45
40.
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
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
2,721,316,997 2,711,003,491 (
103,560,475,778 103,462,677,949 (
46
10,313,506)
97,797,829)
Carrying value
SYP
35,054,037,820
12,963,577,934
22,380,916,494
28,171,538,869
150,000,000
308,251,048
December 31, 2009
Fair value
SYP
35,053,817,141 (
12,963,577,934
22,410,761,075
28,248,351,042
154,474,432
308,251,048
928,153,562
928,153,562
3,062,115,699 3,067,325,136
91,534,491,044 91,579,129,774
Difference
220,679)
29,844,581
76,812,173
4,474,432
5,209,437
44,638,730
(b) Fair value measurements for financial assets recognized at fair value in the consolidated statement
of financial position (according to IFRS 7)
Financial assets- held-for-trading
Available for sale financial assets
Financial assets held-for-trading
Level 1
SYP
December 31, 2010
Level 2
Level 3
SYP
SYP
Total
SYP
92,144,030
347,591,995
-
-
347,591,995
92,144,030
92,144,030
347,591,995
-
439,736,025
Level 1
SYP
December 31, 2009
Level 2
Level 3
SYP
SYP
Total
SYP
75,055,000
319,527,579
-
-
319,527,579
75,055,000
75,055,000
319,527,579
-
394,582,579
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.
47
41.
RISK MANAGEMENT
Since risk is inherent in the Bank’s activities, risk management plays a crucial role in maintaining the
Bank’s strength and continuing profitability. The process of risk management consists of recognizing,
measuring, monitoring financial and non-financial 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
The Bank’s risk management policies are set according to the size and complexity of its activities and are
subject to continuous improvements. Risk management policies are in compliance with the regulations of
Syrian 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
an independent risk management division.
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:
- Finding a suitable environment for credit risk management;
- Having a clear and proper framework of approvals and permissions;
- Maintaining an appropriate credit administration, and provide appropriate mechanisms for
measurement and control; and
- Ensuring adequate controls over the procedures of credit risk management.
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.
Procedures taken for managing credit risk are as follows:
1- Credit risk concentration limits
The Bank manages credit risks through diversifying and spreading its lending activities to ensure that no
unjustified concentration exists with individuals, or group of individuals, in certain economic sectors or
geographic areas, in addition to obtaining sufficient guaranties. Concentration rates should be in
compliance with Monetary and Credit Council circular No 395.
2- Credit rating of customers
The Bank regularly reviews the portfolio of granted loans and classifies it in accordance with Monetary
and Credit Council circular No. 597 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.
48
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 (special mention) loans
2-2. Non-performing loans
- Substandard loans
- Doubtful loans
- Bad loans
3- Credit risk mitigation policies
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 reduce credit risks. The Bank’s annual plan includes
a targeted distribution of credit and investment activities among different sectors and markets with a
special focus on promising sectors.
Credit analysis, control and follow-up
The Bank regularly improves methods used in credit analysis and ensures objectivity and integrity in
decision-making, 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.
49
Quantitative disclosures of credit risk
1. Exposure to credit risk (after provision for impairment and before guarantees and other risk mitigation
factors)
2010
SYP
Statement of financial position items:
Balances with banks
Deposits with Banks
Retail
Real estate
Corporate
Government and public sector
Financial assets and other assets
Financial assets- held for trading
Other assets
Blocked deposit with Central bank of Syria
Off-balance sheet items
Letter of credit- import
Issued letters of guarantee
Acceptances
Unutilized direct credit facilities limits
Total
50
December 31,
2009
SYP
32,712,669,333
9,452,615,093
27,023,108,164
31,868,968,208
12,963,577,934
22,380,916,494
8,630,643,984
1,602,388,317
14,769,862,998
7,636,545,626
4,215,000,000
9,107,700,945
715,060,726
12,063,592,461
6,285,184,737
-
347,591,995
1,491,403,713
698,208,401
358,075,493
319,527,579
150,000,000
718,462,020
308,251,048
2,184,316,603
14,426,829,816
1,200,107,930
11,306,798,575
1,837,382,282
12,690,749,145
965,483,304
8,836,328,494
138,056,166,041
121,211,185,377
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, 2010 as follows:
Retail
SYP
December 31, 2010
Normal (low risk)
Normal (acceptable risk)
Watch (special mention)
Overdue:
Less than 30 days
31 days to 60 days
61 days to 90 days
Non-performing:
Substandard
Doubtful
Bad
Total non-performing
Total
Less:
Suspended interest
Provision for credit losses
(
(
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
1,456,992,347
68,793,072
18,224,879
6,352,793,448
7,671,430,753
14,041,154
2,658,118,247
4,577,328,933
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
19,831,982) (
203,552,896) (
8,630,643,984
1,527,493) (
10,168,136) (
1,602,388,317
139,181,387)
428,620,979)
14,769,862,998
51
(
(
37,326,088)
162,756,646)
7,636,545,626
4,215,000,000
-
4,279,381,973
18,425,593,706
12,545,635,527
4,215,000,000
4,215,000,000
37,857,406,532
(
(
197,866,950)
805,098,657)
36,854,440,925
The table below illustrates the exposure to direct credit risk by degree of risk as of December 31, 2009 as follows:
Retail
SYP
December 31, 2009
Normal (low risk)
Overdue:
Less than 30 days
31 days to 60 days
61 days to 90 days
2,000,000
9,008,574,654
9,761,000
Non-performing:
Substandard
Doubtful
Bad
Total
Less:
Suspended interest
Provision for credit losses
(
(
Real estate
SYP
702,064,539
-
Large
companies
SYP
Corporate
Small and medium
enterprises
SYP
Total
SYP
3,399,482,241
8,000,591,000
360,885,001
1,012,467,356
4,634,367,000
362,885,001
14,122,588,790
12,644,719,000
257,000
5,282,000
4,222,000
-
3,000
19,447,086
151,059,000
70,389,914
28,378,000
260,000
95,119,000
183,659,000
67,195,924
36,598,163
87,682,289
191,476,376
-
997,637
12,565,106
13,562,743
332,598,021
176,546,391
567,976,100
1,077,120,512
214,298,959
48,276,321
138,551,298
401,126,578
614,092,904
262,418,512
806,774,793
1,683,286,209
9,211,812,030
715,627,282
12,477,193,753
6,408,845,935
28,813,479,000
4,168,649) (
99,942,436) (
9,107,700,945
49,177) (
517,379) (
715,060,726
89,515,640)
324,085,652)
12,063,592,461
52
(
(
8,985,885) (
114,675,313) (
6,285,184,737
102,719,351)
539,220,780)
28,171,538,869
The table below illustrates the exposure to indirect credit risk by degree of risk as of December 31, 2010 as follows:
December 31, 2010
Indirect credit facilities
Retail
SYP
Large
companies
SYP
Real estate
SYP
Normal (low risk)
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
Total
Less:
484,885,270
-
6,802,578,986
Net indirect credit facilities
484,885,270
-
-
-
Corporate
Small and medium
enterprises
SYP
130,602,721
2,118,422,879
4,488,901,238
-
-
-
(
24,549,043)
6,778,029,943
53
Total
SYP
145,476,570
773,144,408
1,158,605,407
646,868,459
2,938,186,533
5,647,506,645
-
-
1,751,206
7,395,927
6,016,996
133,507,935
139,524,931
2,084,622,312
9,372,086,568
-
5,644,721
2,084,622,312
(
24,549,043)
9,347,537,525
The table below illustrates the exposure to indirect credit risk by degree of risk as of December 31, 2009 as follows:
December 31, 2010
Indirect credit facilities
Retail
SYP
Normal (low risk)
Overdue:
Up to 30 days
31 days to 60 days
61 days to 90 days
Non- performing
Substandard
Doubtful
Bad
377,771,352
-
Total
Less:
377,771,352
Net indirect credit facilities
377,771,352
Large
companies
SYP
Real estate
SYP
Corporate
Small and medium
enterprises
SYP
Total
SYP
-
358,096,000
1,995,667,646
3,399,930,000
595,508,000
529,147,178
1,237,563,000
953,604,000
2,902,586,176
4,637,493,000
-
-
3,399,930,000
1,237,563,000
4,637,493,000
-
-
23,368,510
79,116,893
102,485,403
25,714,458
783,734
5,818,676
32,316,868
49,082,968
783,734
84,935,569
134,802,271
-
5,856,179,049
2,394,535,046
8,628,485,447
-
-
(
58,463,809)
5,797,715,240
(
5,829,763)
2,388,705,283
(
64,293,572)
8,564,191,875
The whole balance is considered due as soon as one of the installments or interest payments are due, while the overdraft balance is considered due
whenever the limits is exceeded.
54
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 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 to quarters.
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 to go below 25% of the above-mentioned
provision and should be equally allocated to each year’s quarters. The calculated provision as of December
31, 2010 amounted to SYP 179,877,675 and the portion allocated to the year 2010 amounted to SYP
55,556,816.
The Bank also established a provision on non-performing and watch-list credit facilities amounting to SYP
749,541,841 as of December 31, 2010.
The calculated general reserve for credit risk amounted to SYP 180,807,245 as of December 31, 2010
(compared to SYP 134,810,000 as of December 31, 2009). The portion allocated to this year amounted to
SYP 79,699,745.
55
3. Fair value of guarantees against credit facilities
The table below illustrates the fair value of guarantees against credit facilities as of December 31, 2010 as follows:
December 31, 2010
Retail
SYP
Real estate
SYP
Large
companies
SYP
Corporate
Small and medium
enterprises
SYP
Normal (low risk)
Non-performing
Substandard
Doubtful
Bad
776,280,712
14,707,797,063
1,059,940,688
1,816,291,160
213,489,768
62,559,473
4,327,654,950
7,365,670,808
61,305,748
3,316,234,760
5,868,598,571
243,801,696
127,776,017
484,647,480
62,080,760
13,365,000
47,024,000
177,073,990
287,140,950
777,940,848
403,940,417
158,781,200
400,564,895
Total
17,400,243,656
2,152,250,688
12,998,041,019
1,858,375,908
23,425,000
6,513,701,382
8,926,213,823
78,527,543
2,152,250,688
-
17,400,243,656
2,152,250,688
Cash margins
Acceptable banks’ guarantees
Real estate’s guarantees
Shares
Vehicles
Governmental guarantees
Other guarantees
Total
Government and
public sector
SYP
Total
SYP
4,215,000,000
-
5,115,145,933
24,167,977,933
14,507,699,835
-
886,896,863
587,063,167
1,710,177,223
10,209,425,591
4,215,000,000
46,974,960,954
574,078,086
112,428,200
6,429,382,016
15,200,000
5,566,952,711
300,000,006
513,863,913
21,000,000
6,633,294,012
425,071,000
2,616,196,666
-
4,215,000,000
-
2,946,317,907
156,853,200
21,728,628,098
440,271,000
17,109,363,200
4,215,000,000
378,527,549
12,998,041,019
10,209,425,591
4,215,000,000
46,974,960,954
56
The table below illustrates the fair value of guarantees against credit facilities as of December 31, 2009 as follows:
December 31, 2009
Retail
SYP
Real estate
SYP
Large
companies
SYP
Corporate
Small and medium
enterprises
SYP
Total
SYP
Normal (low risk)
Non-performing
Substandard
Doubtful
Bad
2,000,000
10,674,518,728
11,734,303
854,514,131
-
358,096,000
4,062,609,783
9,808,388,378
956,393,000
1,278,935,468
6,707,781,899
1,316,489,000
16,870,578,110
16,527,904,580
10,180,932
15,221,000
32,025,760
1,286,000
16,000,000
325,290,789
30,701,705
398,066,221
111,027,622
39,880,250
85,503,500
446,499,343
87,088,955
531,595,481
Total
10,745,680,723
871,800,131
14,983,152,876
9,179,521,739
35,780,155,469
2,000,000
3,840,513,609
6,796,620,938
106,546,176
871,800,131
-
14,896,000
343,200,000
6,343,077,905
6,342,034,121
1,939,944,850
941,393,000
15,000,000
5,409,374,747
384,171,000
2,280,620,491
148,962,501
958,289,000
358,200,000
16,464,766,392
384,171,000
15,419,275,550
2,195,453,527
10,745,680,723
871,800,131
14,983,152,876
9,179,521,739
35,780,155,469
Cash margins
Acceptable banks’ guarantees
Real estate’s guarantees
Shares
Vehicles
Other guarantees
Total
57
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 797,484,183 as of December 31,
2010 (compared to SYP 1,640,995,364 as of December 31, 2009).
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 151,840,715 as of December 31, 2010 (compared to SYP 105,795,237 as
of December 31, 2009).
4. The 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
Blocked deposit with
32,712,669,333
8,224,765,452
23,198,022,000
347,591,995
1,491,403,713
358,075,493
66,332,527,986
Good
SYP
Balances with banks
Deposits with banks
31,868,968,208
11,849,835,674
19,979,676,758
319,527,579
150,000,000
308,251,048
64,476,259,267
58
December 31, 2010
Normal
Impaired
SYP
SYP
Total
SYP
1,227,849,641
3,825,086,164
-
-
32,712,669,333
9,452,615,093
27,023,108,164
347,591,995
1,491,403,713
-
-
358,075,493
5,052,935,805
-
71,385,463,791
December 31, 2009
Normal
Impaired
SYP
SYP
Total
SYP
1,113,742,260
2,401,239,736
-
-
31,868,968,208
12,963,577,934
22,380,916,494
319,527,579
150,000,000
-
-
308,251,048
3,514,981,996
-
67,991,241,263
5. Credit risk exposure based on internal risk rating:
Good
Class 1
Class 2
Class 3
Normal
Class 4
Class 5
December 31,
S&P Rating
2010
SYP
AAA- To AAA+
AA- To AA+
A- To A+
34,130,475,097
11,112,887,920
21,089,164,972
34,123,794,930
14,169,350,000
16,183,114,337
66,332,527,989
64,476,259,267
4,678,135,802
374,800,000
3,149,781,996
365,200,000
5,052,935,802
3,514,981,996
71,385,463,791
67,991,241,263
BBB- To BBB+
BB- To BB+
Financial assets
Financial assets- held for trading
Non-resident treasury bills (held to maturity)
Certificates of deposit (due on August 6, 2012)
Certificates of deposit (due on December 24, 2012)
Total for the year ended December 31, 2010
Credit rating
Rating agency
A+
AAAAA+
S&P
S&P
S&P
S&P
2009
SYP
Value
SYP
347,591,995
454,960,350
468,500,000
468,500,000
1,739,552,345
59
6.
Concentration of assets and liabilities by geographical region
The table below illustrates credit exposure concentration by geographical region as follows:
Syria
SYP
32,712,669,333
1,174,440,549
2,877,336,164
Middle East
SYP
Europe
SYP
Total
SYP
14,769,862,998
7,636,545,626
4,215,000,000
99,443,363
571,921,900
358,075,493
Total 2010
74,648,327,727
6,610,880,872 25,302,838,154 2,344,376,921
31,689,443 108,938,113,117
Total 2009
62,685,612,185
6,439,878,014 25,053,168,873 2,630,059,051
72,524,029 96,881,242,152
-
-
454,960,350
87,174,476
-
* Except for Middle East countries
60
937,000,000
347,591,995
38,402,221
-
985,017,117
1,358,650,000
America
SYP
Balances with banks
Deposits with banks
Net direct credit facilities:
Retail
Real estate
Corporate:
Large companies
Government and public sector
Other assets
8,630,643,984
1,602,388,317
1,658,539,046 5,602,928,938
4,410,207,000 18,376,915,000
Asia *
SYP
32,712,669,333
31,689,443 9,452,615,093
27,023,108,164
-
-
8,630,643,984
1,602,388,317
709,804
-
-
14,769,862,998
7,636,545,626
4,215,000,000
1,491,403,713
347,591,995
698,208,401
358,075,493
7. Concentration by Industry Sector
The table below illustrates credit exposure by industry sector as follows:
Balances with
Balances with banks
Deposits with banks
Net direct credit
facilities
Financial assets – held
to maturity
Financial assetsheld for trading
Other assets
Financial
SYP
Industrial
SYP
Commercial
SYP
Real estate
SYP
32,712,669,333
9,452,615,093
27,023,108,164
-
-
-
937,000,000
347,591,995
212,612,286
358,075,493
3,276,797,977 5,162,845,351
-
-
12,850,155 36,775,769
-
-
-
1,778,532
-
Government
Government
and public sector and public sector
Agricultural
(resident)
(non-resident)
SYP
SYP
SYP
453,544,936
-
6,975
-
1,778,603
-
Balance as of
December 31, 2010
71,043,672,364 3,289,648,132 5,199,621,120
1,785,507
455,323,539
Balance as of
December 31, 2009
68,333,887,144 4,288,897,001 1,220,061,973
606,076,039
4,502,458
61
4,215,000,000
99,443,363
-
32,712,669,333
9,452,615,093
27,023,108,164
-
23,744,474,129
36,854,440,925
-
1,491,403,713
454,960,350
-
-
-
-
Total
SYP
-
-
4,314,443,363
Retail
SYP
434,184,613
-
454,960,350 24,178,658,742
-
22,427,817,537
347,591,995
698,208,401
358,075,493
108,938,113,117
96,881,242,152
B- Market Risk
Market risk is caused mainly by fluctuations in interest and foreign exchange rates. The board of
directors has set limits on the acceptable level of exposure to market risk. Changes in rates are
monitored and checked against these limits on a daily basis.
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.
Interest rate risk (sensitivity analysis) 2% change in interest rate
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.
2% increase in interest rate
December 31, 2010
Currency
USD
EUR
GBP
JPY
SYP
Others
2% decrease in interest rate
Gap
SYP
( 4,446,310,886)
( 3,274,513,382)
( 61,767,561)
( 24,218,462)
(13,928,978,232)
( 6,338,680,799)
December 31, 2010
Currency
USD
EUR
GBP
JPY
SYP
Others
Gap
SYP
( 4,446,310,886)
( 3,274,513,382)
( 61,767,561)
( 24,218,462)
(13,928,978,232)
( 6,338,680,799)
62
(
(
(
(
(
(
Interest income
sensitivity
(profit and loss)
SYP
88,926,218)
65,490,268)
1,235,351)
484,369)
278,579,565)
126,773,616)
Interest income
sensitivity
(profit and loss)
SYP
88,926,218
65,490,268
1,235,351
484,369
278,579,565
126,773,616
Equity
sensitivity
SYP
( 66,694,664)
( 49,117,701)
(
926,513)
(
363,277)
( 208,934,674)
( 95,080,212)
Equity
sensitivity
SYP
66,694,664
49,117,701
926,513
363,277
208,934,674
95,080,212
2% increase in interest rate
December 31, 2009
Currency
USD
EUR
GBP
JPY
SYP
Others
2% decrease in interest rate
Gap
SYP
( 849,585,714)
( 559,853,972)
( 18,665,150)
( 20,422,716)
(14,349,038,457)
( 110,580,119)
December 31, 2009
Currency
USD
EUR
GBP
JPY
SYP
Others
Gap
SYP
( 849,585,714)
( 559,853,972)
( 18,665,150)
( 20,422,716)
(14,349,038,457)
( 110,580,119)
Interest income
sensitivity
(profit and loss)
SYP
Equity
sensitivity
SYP
Interest income
sensitivity
(profit and loss)
SYP
Equity
sensitivity
SYP
( 16,991,714) ( 12,743,786)
( 11,197,079) ( 8,397,809)
(
373,303) (
279,977)
(
408,454) (
306,341)
( 286,980,769) (215,235,577)
(
2,211,602) ( 1,658,702)
16,991,714
11,197,079
373,303
408,454
286,980,769
2,211,602
12,743,786
8,397,809
279,977
306,341
215,235,577
1,658,702
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, 2010
Change in
exchange
rate (2%)
SYP
Effect on
profit and loss
SYP
December 31, 2009
Change in
exchange
rate (2%)
SYP
Effect on
profit and loss
SYP
1,366,427,156
8,275,590
59,044
571,607
1,585,097
3,342,041
1,390,982,199
9,525,690
(
1,679,000)
80,440
516,232
9,842,771
63
27,328,543
165,512
1,181
11,432
31,702
66,841
(
Effect on
equity
SYP
27,099,996
124,134
886
8,574
23,776
50,131
Effect on
equity
SYP
27,819,644
27,299,180
190,514
142,885
33,580) (
25,185)
1,609
1,207
10,325
7,744
196,855
147,642
Interest rate re-pricing gap
Classification is determined according to interest rate re-pricing frequency or maturity whichever is earlier:
Assets
Balances with banks
Deposits with banks
Financial assets-held for trading
Financial assets-held to maturity
Intangible assets
Deferred tax assets
Other assets
Total assets
Within
1 month
SYP
Between 1
and
3 months
SYP
Between 3
and
6 months
SYP
December 31, 2010
Between 6
and
9 months
SYP
25,754,113,987
5,064,983,093 4,387,632,000
8,366,255,164 13,954,553,000
9,021,784,600 2,055,803,108
321,501,234
937,000,000
185,828,471
103,917,927
3,236,620,000
5,439,500,523
53,110,281
93,700,000
3,672,719,696
13,785,458
48,714,466,549 21,438,906,035
8,729,230,804
Liabilities and equity
Banks’ deposits
Cash margins
Provision for income tax
Other liabilities
Total liabilities
992,433,428
161,422,697
94,570,902,311 3,271,664,054
179,600,816
160,924,358
95,742,936,555 3,594,011,109
Interest rate re-pricing gap
(47,028,470,006) 17,844,894,926
-
Within
1 month
SYP
-
Between 1
and
3 months
SYP
Between 9
months and
1 year
SYP
Between 1
and 2 years
SYP
Non interest
sensitive
SYP
Total
SYP
3,780,205,154
10,434,509,779
1,371,980,000
1,103,199,259 14,989,156,456
572,277,283
26,090,761
99,443,363
454,960,350
92,144,030
2,113,860,574
132,890,198
8,506,232
8,900,114
250,968,923
81,697,227
358,075,493
2,583,522,736 15,695,085,729 13,820,051,577
36,188,623,766
9,452,615,093
27,023,108,164
36,854,440,925
347,591,995
1,491,403,713
92,144,030
2,113,860,574
132,890,198
8,506,232
698,208,401
358,075,493
114,761,468,584
2,475,088,905
2,104,518,713
4,579,607,618
1,246,798,237
111,751,630
1,358,549,867
1,200,151,310
71,355,363
1,271,506,673
153,159
59,725,855
339,075,198
10,582,500
1,842,640,604
2,252,177,316
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
109,687,673,057
4,149,623,186
2,421,655,287
1,312,016,063 14,806,201,810 11,567,874,261
5,073,795,527
-
Between 3
and
6 months
SYP
-
795,717,802
93,166,117
888,883,919
December 31, 2009
Between 6
and
9 months
SYP
Between 9
months and
1 year
SYP
Between 1
and 2 years
SYP
Non interest
sensitive
SYP
Total
SYP
Total assets
Total liabilities
39,603,549,090 13,272,105,914 10,791,886,860
45,269,595,800 13,858,089,393 11,772,502,740
2,276,213,766 6,226,092,165 14,313,732,612 15,483,919,987
10,033,210,096 6,990,336,920 5,807,434,797 3,829,530,727
101,967,500,394
97,560,700,473
Interest rate re-pricing Gap
(5,666,046,710) ( 585,983,479) (
(7,756,996,330) ( 764,244,755) 8,506,297,815 11,654,389,260
4,406,799,921
980,615,880)
64
Concentration in foreign currency risk
USD
SYP
December 31, 2010
GBP
JPY
SYP
SYP
EUR
SYP
Others
SYP
SYP
SYP
Total
SYP
Assets
Cash and balances with
Balances with banks
Deposits with banks
Intangible assets
Deferred tax assets
Other assets
3,974,885,838
5,707,050,507
17,849,850,000
1,480,166,874
143,304,780
1,391,960,350
37,287,636
168,833,543
1,161,477,037
2,115,092,187
3,936,365,000
249,279,643
178,196,454
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
-
30,695,254,179
720,666,379
3,122,336,164
34,971,002,024
26,090,761
99,443,363
92,144,030
2,113,860,574
132,890,198
8,506,232
575,641,958
189,241,950
Total assets
30,753,339,528
7,646,804,673
384,216,253
78,857,996
3,151,172,322
72,747,077,812 114,761,468,584
Liabilities
Banks’ deposits
Cash margins
Other liabilities
277,184,766
28,166,487,558
887,418,373
55,821,675
54,374,944
7,119,547,529
408,269,593
56,337,017
4,367,631
378,947,567
772,013
69,998
74,737,000
3,526,469
22,920
95,136,620
2,923,333,897
108,571,813
19,202,854
648,055,164
64,968,632,758
59,725,855
1,316,285,205
339,075,198
10,582,500
1,711,186,140
1,153,856,125
103,560,475,778
59,725,855
2,721,316,997
339,075,198
10,582,500
1,842,640,604
Total liabilities
29,386,912,372
7,638,529,083
384,157,209
78,286,389
3,146,245,184
69,053,542,820
109,687,673,057
1,366,427,156
8,275,590
59,044
571,607
4,927,138
3,693,534,992
5,073,795,527
Net statement of financial position
concentration
65
36,188,623,766
9,452,615,093
27,023,108,164
36,854,440,925
347,591,995
1,491,403,713
92,144,030
2,113,860,574
132,890,198
8,506,232
698,208,401
358,075,493
USD
SYP
December 31, 2009
GBP
JPY
SYP
SYP
EUR
SYP
Others
SYP
SYP
SYP
Total
SYP
Assets
Cash and balances with
Balances with banks
Deposits with banks
Intangible assets
Deferred tax assets
Other assets
4,704,890,765
9,205,632,961
15,922,716,758
748,315,805
130,581,825
126,034,126
164,509,098
1,226,220,474
1,659,345,569
4,116,250,000
154,434,403
188,945,754
9,985,374
-
19,252,791
436,664,829
537,672
112,442
-
13,330
4,570,140
38,062,651
-
185,615,830
930,592,117
1,538,460,000
6,562,921
77,725,388
-
28,918,044,630
726,772,318
803,489,736
27,223,625,417
150,000,000
75,055,000
1,684,003,279
136,499,987
5,630,364
504,604,690
143,741,950
Total assets
31,002,681,338
7,355,181,574
456,567,734
42,646,121
2,738,956,256
60,371,467,371 101,967,500,394
Liabilities
Banks’ deposits
Cash margins
Other liabilities
284,885,033
27,933,810,853
1,341,612,943
51,390,300
198,948,479
6,790,549,342
295,983,227
60,174,836
6,636,641
441,259,237
10,041,283
309,574
41,964,500
596,515
4,666
24,447,128
2,558,803,286
126,865,500
18,481,339
371,271,781
53,809,471,811
1,287,612,746
67,465,040
343,247,415
1,494,866,998
928,153,562
91,534,491,044
3,062,115,699
67,465,040
343,247,415
1,625,227,713
Total liabilities
29,611,699,129
7,345,655,884
458,246,735
42,565,681
2,728,597,253
57,373,935,791
97,560,700,473
1,390,982,209
9,525,690
80,440
10,359,003
2,997,531,580
4,406,799,921
Net statement of financial position
concentration
66
(
1,679,001)
35,054,037,820
12,963,577,934
22,380,916,494
28,171,538,869
319,527,579
150,000,000
75,055,000
1,684,003,279
136,499,987
5,630,364
718,462,020
308,251,048
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 the Central Bank of Syria
in the form of deposits (equal to 10% 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 October 22, 2009 while limits are set by management on the ratio of net
current assets to clients’ liabilities and weighted off- balance sheet commitments (current assets consist
of cash and short-term balances with banks and financial institutions).
2010
%
December 31
Average during the year
Highest %
Lowest %
59
62
64
59
67
2009
%
63
53
63
47
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
December 31, 2010
Assets
Balances with Banks
Deposits with Banks
Held for trading financial assets
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
30,268,259
149,332,557
76,156,286,227 18,414,769,247
24,302,475
417,261,623
161,422,697
160,924,357
3,271,664,054
59,725,855
1,035,026,972
2,104,518,713
2,475,088,905
339,075,198
10,582,500
229,895,991
111,751,630
1,246,798,237
2,536,330
71,355,363
1,200,151,310
101,453,101
93,166,118
795,717,798
32,164,112
-
1,153,856,125
2,721,316,997
103,560,475,778
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
68
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
On demand
Less than
8 days
SYP
December 31, 2009
8 days to
1 month
SYP
Assets
Cash and balances with Central Bank of Syria 25,683,089,143
Balances with at Banks
4,177,417,934 6,089,935,000
Deposits with Banks
1,043,075,000 3,660,981,494
319,527,579
1,814,592,552
Property and equipments
Intangible assets
Deferred tax assets
Other assets
144,130,910
13,124,086
-
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
2,696,225,000
8,119,150,000
2,456,730,914
91,166,175
-
7,564,310,000
3,177,576,860
50,000,000
245,755,561
-
1,095,600,000
1,180,613,766
36,250,491
-
9,370,948,677
897,800,000
5,228,292,165 14,313,732,612
75,055,000
100,000,000
1,684,003,279
136,499,987
5,630,364
37,235,936
147,249,861
3,549,000
308,251,048
Total
SYP
35,054,037,820
12,963,577,934
22,380,916,494
319,527,579
28,171,538,869
75,055,000
150,000,000
1,684,003,279
136,499,987
5,630,364
718,462,020
308,251,048
Total assets
31,367,240,566 11,578,633,132 13,363,272,089
11,037,642,421 2,312,464,257
6,263,328,101 14,466,612,837 11,578,306,991 101,967,500,394
Liabilities
Banks'deposits
Cash margins
Other liabilities
880,267,759
41,964,500
5,921,303
38,759,456
170,325,381
860,644,341
17,069,572,957 27,158,385,275 13,135,010,994
64,293,572
39,761,715
933,699,020
290,760,673
437,482,472
385,831,854
11,550,251,134 9,916,416,826
343,247,415
270,896,595
17,552,252
451,635,971
6,897,419,061
57,671,177
717,436,224
5,807,434,797
3,171,468
14,886,281
-
928,153,562
3,062,115,699
91,534,491,044
67,465,040
343,247,415
1,625,227,713
Total liabilities
18,279,360,845 27,410,436,871 14,999,569,230
12,601,877,616 10,319,800,932 7,406,726,209
6,542,928,770
-
97,560,700,473
Net
13,087,879,721 (15,831,803,739) ( 1,636,297,141)
(1,564,235,195) (8,007,336,675) (1,143,398,108) 7,923,684,067 11,578,306,991
69
4,406,799,921
Off-balance sheet items
Letters of credit and acceptances
Unutilized direct credit facilities
Guarantees
Letters of credit and acceptances
Unutilized direct credit facilities
Guarantees
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
3,384,424,533
11,306,798,575
20,533,244 14,426,829,816
27,113,190,487 1,984,329,193
20,533,244 29,118,052,924
December 31, 2009
From 1
More than
to 5 years
5 years
SYP
SYP
Up to one year
SYP
Total
SYP
2,802,865,586
8,836,328,494
10,386,940,934 2,283,274,967
2,802,865,586
8,836,328,494
20,533,244 12,690,749,145
22,026,135,014 2,283,274,967
20,533,244 24,329,943,225
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.
70
42.
SEGMENT REPORTING
A. Information on the Bank’s business segments
The Bank is organized for administrative purposes through its major lines of business:
− Retail accounts
− Corporate accounts
− Treasury
Corporate
SYP
Retail
SYP
Total interest, fees and commissions income
Total interest, fees and commissions expense
Transfers between sectors
Income from available for sale financial assets
Income from financial assets-held for trading
Net unrealized exchange gain/
(loss) on structural position
Total Income
Net income
(
1,249,488,765
1,055,365,747)
840,142,572
-
2,194,268,626
100,766,865)
4,015,181
-
(
1,034,265,590
(
101,616,394)
932,649,196
(
Treasury
SYP
(
(
Others
SYP
345,166,404
12,187,005)
844,157,753)
4,370,000
196,972,988
11,703,067
-
2,097,516,942
(
33,828,417
264,303,882)
-
127,618,128)
1,969,898,814
(
264,303,882)
-
264,303,882)
-
12,895,295
( 1,647,136,987)
( 1,634,241,692)
( 336,199,330)
264,303,882)
( 1,970,441,022)
Income not allocated to segments
Operating expenses not allocated to segments
Profit before tax
Income tax
932,649,196
-
1,969,898,814
-
Net profit for the year
932,649,196
1,969,898,814
- 71 -
(
(
Year ended
December 31,
2009
SYP
Total
SYP
(
(
(
(
3,788,923,795
1,168,319,617)
4,370,000
196,972,988
11,703,067
(
3,754,656,733
1,311,515,754)
39,540,810
132,748,552
9,677,040
33,828,417
2,867,478,650
(
19,746,686)
2,605,360,695
229,234,522)
2,638,244,128
(
229,132,526)
2,376,228,169
12,895,293
1,647,136,985)
1,004,002,436
336,199,330)
667,803,106
(
(
117,202,155
1,367,975,661)
1,125,454,663
464,250,186)
661,204,477
December 31, 2010
Retail
SYP
Corporate
SYP
Treasury
SYP
Others
SYP
Total
SYP
December 31,
2009
SYP
Segments’ assets
Assets not allocated to segments
10,285,978,370
-
26,711,841,526
-
75,026,115,781
-
2,737,532,907
112,023,935,677
2,737,532,907
99,706,622,156
2,260,878,238
Total assets
10,285,978,370
26,711,841,526
75,026,115,781
2,737,532,907
114,761,468,584
101,967,500,394
Segments’ liabilities
Liabilities not allocated to segments
81,158,404,614
-
26,262,234,997
-
1,291,159,497
-
975,873,949
108,711,799,108
975,873,949
96,645,127,902
915,572,571
Total liabilities
81,158,404,614
26,262,234,997
1,291,159,497
975,873,949
109,687,673,057
97,560,700,473
Capital expenditure
-
-
-
632,338,572
632,338,572
596,568,813
-
-
-
192,202,120
192,202,120
159,468,926
-
-
-
13,888,946
13,888,946
13,707,628
Other information
- 72 -
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 expenditure by
geographical segment:
Domestic
(Syria)
SYP
December 31, 2010
Outside
Syria
SYP
Total
SYP
2,331,355,315
196,972,988
Income from financial assets- held-for-trading
2,070,613
Net unrealized exchange gain on structural position
33,828,417
4,370,000
12,678,929
289,248,863
9,632,454
216,364
Total income
299,097,681
2,880,373,943
( 229,234,522 )
2,581,276,262
( 229,234,522 )
Net income
2,352,041,740
Total assets
80,650,098,251
Capital expenditure
Income from financial assets- held for trading
Net unrealized exchange gain on
structural position
Total income
632,338,572
299,097,681
December 31, 2009
Outside
Syria
SYP
1,922,943,156
132,748,552
-
520,197,823
9,677,040
19,746,686 )
3,442,500
117,202,155
2,156,589,677
( 229,132,526 )
Net income
1,927,457,151
Total assets
67,771,870,427
Capital expenditure
596,568,813
73
2,651,139,421
34,111,370,333 114,761,468,584
Domestic
(Syria)
SYP
(
2,620,604,178
196,972,988
11,703,067
33,828,417
4,370,000
12,895,293
(
36,098,310
-
632,338,572
Total
SYP
2,443,140,979
132,748,552
9,677,040
19,746,686 )
39,540,810
117,202,155
565,973,173
2,722,562,850
( 229,132,526 )
565,973,173
2,493,430,324
34,195,629,967 101,967,500,394
-
596,568,813
43.
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 2).
December 31,
2010
2009
SYP ‘000
SYP ‘000
Paid in capital
Legal reserve
Special reserve
Retained earnings
Intangible assets (net)
The greater of facilities granted to or used by
major shareholders and Board of Directors
Net basic private money
Net unrealized profit of available for sale financial
assets after deducting 50% discount
General reserve for credit risk
Net private money
Credit risk and other assets risk
Risk weighted off-balance sheet
assets and liabilities
Market risk
Operational risk
Total risk-weighted assets
(
(
3,781,000
385,311
385,311
410,726
132,890)
254,953)
4,574,505
(
(
3,326,000
288,440
288,440
471,366
140,049)
546,696)
3,687,501
15,874
79,700
4,670,079
29,165,737
16,278
3,703,779
24,847,178
6,080,012
322,710
2,483,582
38,052,041
4,990,432
352,135
2,116,663
32,306,408
Capital adequacy ratio (%)
12,27%
11,46%
Basic capital ratio (%)
12,02%
11,41%
The Board of Directors regularly reviews capital structure. As a part of this review, they take into
consideration the cost of capital and risks as a major part of capital management through a policy of cash
distribution and capitalization of reserves.
74
44.
MATURITY OF ASSETS AND LIABILITIES
Up to one year
SYP
More than
1 year
SYP
Balances with banks
Deposits with banks
Financial assets-held to maturity
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
454,960,350
92,144,030
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
1,491,403,713
92,144,030
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
2,628,150,880
102,764,757,976
59,725,855
339,075,198
10,582,500
1,810,476,492
93,166,117
795,717,802
32,164,112
1,153,856,125
2,721,316,997
103,560,475,778
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
December 31, 2010
Assets
Liabilities
Net
75
Total
SYP
Assets
Balances with banks
Deposits with banks
Intangible assets
Deferred tax assets
Other assets
Total assets
Up to one year
SYP
More than
1 year
SYP
25,683,089,143
12,963,577,934
22,380,916,494
319,527,579
13,857,806,257
150,000,000
567,663,159
75,922,580,566
9,370,948,677
14,313,732,612
75,055,000
1,684,003,279
136,499,987
5,630,364
150,798,861
308,251,048
26,044,919,828
35,054,037,820
12,963,577,934
22,380,916,494
319,527,579
28,171,538,869
150,000,000
75,055,000
1,684,003,279
136,499,987
5,630,364
718,462,020
308,251,048
101,967,500,394
Liabilities
Banks’ deposits
Cash margins
Customers'deposits
Other liabilities
Total liabilities
928,153,562
2,344,679,475
85,727,056,247
64,293,572
343,247,415
1,610,341,432
91,017,771,703
717,436,224
5,807,434,797
3,171,468
14,886,281
6,542,928,770
928,153,562
3,062,115,699
91,534,491,044
67,465,040
343,247,415
1,625,227,713
97,560,700,473
( 15,095,191,137) 19,501,991,058
4,406,799,921
December 31, 2009
Net
Total
SYP
45. OFF-BALANCE SHEET COMMITMENTS
A. Off-balance sheet commitments (Face value)
2010
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
76
December 31,
2009
SYP
2,184,316,603
1,200,107,930
1,837,382,282
965,483,304
1,005,842,393
1,553,106,008
3,428,713,632
1,235,349,882
1,598,986,000
2,991,223,979
1,919,437,745
1,471,531,955
5,048,198,083
1,196,419,803
922,964,831
4,745,804,650
5,935,624,790
1,934,710,905
3,436,462,880
3,894,770,245
2,084,328,905
2,857,229,344
29,118,052,924
24,329,943,225
B. Commitments and contractual obligations
2010
SYP
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
December 31,
2009
SYP
22,641,297
186,132,750
136,726,990
19,005,000
128,979,595
87,861,126
345,501,037
235,845,721
These operational lease contracts represent rent on the Bank’s branches.
46.
SUBSEQUENT EVENTS
Subsequent to the date of consolidated financial statements, the Syrian Commission on Financial
Markets & Securities issued decision No 33 dated February 21, 2001 that approves the capital increase
of SYP 795,000,000 distributed on SYP 1,590,000 shares (par value of SYP 500 each). New shares were
not issued to the public by the date of issuance of the consolidated financial statements.
77

banque bemo saudi fransi sa consolidated financial statements and

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