BSTDB Financial Statements For 2020

BLACK SEA TRADE AND DEVELOPMENT BANK
Financial Statements for the Year Ended

31 December 2020
Together with Auditor’s Report

Table of Contents
Page
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Independent Auditor’s Report 2– 5

Income Statement 6
Statement of Comprehensive Income 7
Statement of Financial Position 8
Statement of Changes in Members’ Equity 9
Statement of Cash Flows 10
Notes to the Financial Statements 11 – 71
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Deloitte Certified Public
Accountants S.A.
3a Fragkokklisias & Granikou str.
Marousi Athens GR 151-25
Greece
Tel: +30 210 6781 100

www.deloitte.gr
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors and the Board of Governors of Black Sea Trade and Development Bank
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Black Sea Trade and Development Bank (the Bank), which
comprise the statement of financial position as at 31 December 2020 and the statements of income and
comprehensive income, changes in equity and cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial
position of Black Sea Trade and Development Bank as at 31 December 2020, and its financial performance
and its cash flows for the year then ended in accordance with International Financial Reporting Standards
(IFRSs).
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs) as these have been
incorporated into Greek legislation. Our responsibilities under those standards are further described in the
“Auditor’s Responsibilities for the Audit of the Financial Statements” section of our report. We have been
independent of the Bank during the whole period of our appointment in accordance with the International
Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) as
incorporated into Greek legislation and the ethical requirements in Greece relevant to the audit of the
financial statements and we have fulfilled our ethical requirements in accordance with the applicable
legislation and the above mentioned Code of Ethics. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the financial statements of the current year. These matters and the assessed risks of material
misstatements were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
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Key audit matter How the matter was addressed in our audit
Expected Credit Loss on Loans at amortized cost
Loans at amortized cost of the Bank amounted Based on our risk assessment and following a
to EUR 2,030 million as at 31 December 2020 risk based approach, we have evaluated the
(EUR 1,808 million as at 31 December 2019) impairment methodologies applied and
and loss impairment to EUR 56 million (EUR 43 assumptions made by Management in relation
million as at 31 December 2019) as presented to this key audit matter, which included, inter
on the Statement of Financial Position. alia, the following audit procedures:
Τhe Bank measures Expected Credit Losses - we obtained an understanding of the

(ECL) for loans at amortized cost both on an procedures and evaluated the design and
individual and a collective basis. implementation of relevant internal controls
within the business process.
The estimation of ECL on loans at amortized - we assessed the appropriateness of the
cost is considered a key audit matter as it is a Bank’s IFRS 9 impairment methodologies.
complex calculation that involves the use of a - with the support of our internal financial risk
number of assumptions and parameters such as modeling specialists we assessed the
probability of default (PD), Loss Given Default reasonableness of Management’s
(LGD) and Exposure at Default (EAD) as well as assumptions and input data used in the
assumptions around the inputs used and model, including the analysis of the
probability weight of the multiple economic forecasted macroeconomic variables. We
scenarios. tested the mechanical elements of the
calculations such as the EAD, the PD and
Significant Management judgements also stage allocation and reperformed the
relates to the criteria used for the staging calculation of the ECL on a sample basis.
assessment of loans at amortized cost. - we tested the accuracy and completeness of
critical data used in the ECL calculation by
Management provided further information about agreeing a sample of ECL calculation data
principles and accounting policies for points to source systems or documentation.
determining the allowance for impairment on - on a sample basis we assessed the
loans at amortized cost and the management of reasonableness of the estimated expected
credit risk in notes 3.6, 5, 12 and 15 to the credit loss for the individually assessed
financial statements. credit impaired exposures.
- we assessed the appropriateness of any
post model adjustment.
We assessed the adequacy and completeness

of the Bank’s disclosures in respect of credit
risk, structure and quality of loan portfolio and
impairment allowance in accordance with IFRS
9.
Other Information
Management is responsible for the other information. The other information comprises the information
included in the Annual report, but does not include the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we will not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If,
based on the work we have performed, we conclude that there is a material misstatement in this other
information, we are required to report that fact. We have nothing to report in this regard.
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Responsibilities of Management and Those Charged with Governance for the Financial Statements
Management is responsible for the preparation and fair presentation of the financial statements in
accordance with IFRSs, and for such internal control as Management determines is necessary to enable
the preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, Management is responsible for assessing the Bank’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless Management either intends to liquidate the Bank or to cease
operations, or has no realistic alternative but to do so.
The Audit Committee of the Bank is responsible for overseeing the Bank’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs, as these have been incorporated into Greek legislation, will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, as these have been incorporated into Greek legislation, we
exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Bank's internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by Management.
• Conclude on the appropriateness of Management’s use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Bank’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date
of our auditor’s report. However, future events or conditions may cause the Bank to cease to
continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
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We communicate with those charged with governance regarding, among other matters, the planned
scope and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters.
Athens, 20 May 2021
The Certified Public Accountant
Alexandra Kostara
Reg. No. SOEL: 19981
Deloitte Certified Public Accountants SA
3a Fragkokklisias & Granikou str.,
GR 151-25 Marousi, Athens, Greece
Reg. No SOEL:E120
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INCOME STATEMENT
For the year ended 31 December 2020
Presented in thousands of EUR Note 2020 2019
Interest and similar income 7 97,856 93,969

Interest and similar expense 8 (61,048) (53,274)
Net interest income (expense) on derivatives 9 7,427 (4,113)
Net interest income 44,235 36,582
Net fees and commissions 10 2,040 967

Dividend income 16 164 -
Net gains from equity investments through profit or loss 16 284 268
Net (losses) gains on derecognition of debt investment securities at
fair value through other comprehensive income (1,752) 119
Net (losses) on derecognition of financial liabilities at amortized cost 20 (2,049) -
Unrealized net fair value gains on derivative instruments 14 7,410 -
Fair value (losses) gains on loans measured at fair value through
profit or loss 15 (229) 477
Fair value (losses) on equity investments measured at fair value
through profit or loss 16 (7) (217)
Foreign exchange income (losses) 78 (1,067)
Other (losses) income (4) 4
Operating income 50,170 37,133
Personnel expenses 11,26 (16,097) (15,758)

Administrative expenses 11 (4,161) (5,187)
Depreciation and amortization 18,19 (525) (572)
Income before impairment 29,387 15,616
Impairment (losses) on loans 12 (12,894) (1,841)

Impairment (losses) on debt investment securities measured at
fair value through other comprehensive income (2,278) (111)
Income for the year 14,215 13,664
The accompanying notes, on pages 11 to 71 are an integral part of these financial statements
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STATEMENT OF COMPREHENSIVE INCOME
Other comprehensive income (expense):

Items that will not be reclassified subsequently to profit or loss:
Actuarial (losses) gains on defined benefit scheme 24 (2,036) (3,020)
Gains (losses) on equity investments financial assets 24 (3,577) 4,219
Items that are or may be reclassified subsequently to profit or loss:
Gains (losses) on investment securities financial assets 24 4,697 12,518
Other comprehensive (expense) income (916) 13,717
Total comprehensive income 13,299 27,381
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STATEMENT OF FINANCIAL POSITION
At 31 December 2020

(as Restated)
Assets
Cash and due from banks 25 34,328 81,271
Deposits in margin accounts 26,240 5,900
Debt investment securities at fair value through
other comprehensive income 13 687,961 419,826
Derivative financial instruments – assets 14 26,701 3,128
Loans at amortized cost 5,15 2,030,396 1,808,187

Less: deferred income 15 (13,813) (8,170)
Less: impairment losses 5,12 (55,937) (43,314)
Loans at fair value through profit or loss 15 12,525 12,754
Loans 1,973,171 1,769,457
Equity investments at fair value through profit or loss 5,16 791 798
Equity investments at fair value through other
comprehensive income 5,16 25,519 29,588
Equity investments at fair value 26,310 30,386
Accrued interest receivable 23,512 24,334

Other assets 17 9,490 11,519
Property and equipment 18 429 489
Intangible assets 19 298 422
Right of use assets 22 579 1,255
Total Assets 2,809,019 2,347,987
Liabilities
Short-term 20 111,120 83,675
Amounts due to financial institutions 20 315,992 240,206
Debt evidenced by certificates 20 1,465,218 1,161,274
Accrued interest payable 9,384 11,652
Borrowings 1,901,714 1,496,807
Margin accounts 22,920 4,550
Derivative financial instruments – liabilities 28,935 6,552
Other liabilities 11,359 8,610
Lease liability 383 1,059
Total liabilities 1,965,311 1,517,578
Members' Equity
Authorized share capital 23 3,450,000 3,450,000
Less: unallocated share capital 23 (1,161,500) (1,161,500)
Subscribed share capital 23 2,288,500 2,288,500
Less: callable share capital 23 (1,601,950) (1,601,950)
Paid-in share capital 686,550 686,550
Reserves 24 58,298 54,009

Retained earnings 98,860 89,850
Total members' equity 843,708 830,409
Total Liabilities and Members' Equity 2,809,019 2,347,987
Off-balance-sheet items
Commitments 5 274,031 353,496
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STATEMENT OF CHANGES IN MEMBERS’ EQUITY
Share capital
Presented in thousands EUR Retained
Subscribed Callable Payable Reserves Earnings Total
At 31 December 2018 2,288,500 (1,601,950) (1,428) 32,957 83,521 801,600
Income for the year - - - - 13,664 13,664

Other comprehensive income:
Net gains (losses) on
financial assets at fair
value reserve through OCI - - - 16,737 - 16,737
Actuarial (losses) gains on
defined benefit scheme - - - (3,020) - (3,020)
Total comprehensive income
for the year - - - 13,717 13,664 27,381
Members’ contributions - - 1,428 - - 1,428

Transfer to general reserve - - - 7,335 (7,335) -
Total contributions - - 1,428 7,335 (7,335) 1,428
At 31 December 2019 2,288,500 (1,601,950) - 54,009 89,850 830,409
Income for the year - - - - 14,215 14,215

Other comprehensive income:
Net gains (losses) on
financial assets at fair
value reserve through OCI - - - 1,120 - 1,120
Actuarial (losses) gains on
defined benefit scheme - - - (2,036) - (2,036)
Total comprehensive income
for the year - - - (916) 14,215 13,299
Members’ contributions - - - - - -
Transfer to general reserve - - - 5,205 (5,205) -
Total contributions - - - 5,205 (5,205) -
At 31 December 2020 2,288,500 (1,601,950) - 58,298 98,860 843,708
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STATEMENT OF CASH FLOWS
Cash flows from operating activities

Adjustment for items in income statement:

Depreciation and amortization 525 572
Impairment losses on loans 12,623 1,841
Impairment losses on investment securities 2,278 111
Fair value losses on loans at FVTPL 229 (477)
Fair value (gains) losses on equity investments at FVTPL 7 217
Net interest income (36,808) (40,695)
Realized losses from debt issued 2,049 -
Realized gains on disposal investment securities at FVTOCI 1,752 (119)
Cash generated from (used for) operations:
Proceeds from repayment of loans 561,715 372,476
Proceeds from repayment of equity investments 1,231 2,096
Funds advanced for loans (783,932) (871,130)
Funds advanced for equity investments (732) (825)
Net movement in derivative financial instruments (1,190) (15,965)
Working capital adjustments:
Interest income received 98,678 89,804
Interest income paid (63,316) (52,117)
Decrease (increase) in deposit margin accounts (20,340) 16,910
Decrease (increase) in other assets 2,029 (2,147)
Increase (decrease) in margin accounts 18,370 4,550
Increase (decrease) in other liabilities 713 4,191
Increase (decrease) in deferred income 5,643 5,118
Net cash from / (used in) operating activities (184,261) (471,925)
Cash flows from investing activities

Proceeds investment securities at FVTOCI 1,227,280 812,753
Purchase of investment securities at FVTOCI (1,459,327) (761,067)
Purchase of property, software and equipment (341) (379)
Net cash from / (used in) investing activities (232,388) 51,307
Cash flows from financing activities

Proceeds received from share capital - 1,428
Proceeds from borrowings 944,201 1,267,253
Repayment of borrowings (539,074) (736,128)
Net cash from financing activities 405,127 532,553
Net increase (decrease) in cash and cash equivalents (11,522) 111,935
Cash and cash equivalents at beginning of year 284,188 172,253
Cash and cash equivalents at end of year 25 272,666 284,188
The accompanying notes, on pages 11 to 71 are an integral part of these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
1. ESTABLISHMENT OF THE BANK
1.1 Agreement Establishing the Bank
Black Sea Trade and Development Bank (the “Bank”), whose headquarters are located at 1 Komninon
Street, Thessaloniki, in the Hellenic Republic, was established as an international financial organization
under the Agreement Establishing the Bank dated 30 June 1994 (‘Establishing Agreement’). In accordance
with Article 61 of the Establishing Agreement, following the establishment of the Bank the Establishing
Agreement came into force on 24 January 1997. The Bank commenced operations on 1 June 1999.
The purpose of the Bank is to accelerate development and promote cooperation among its shareholder
countries. As a regional development institution, the Bank is well placed to mobilize financial resources
and to improve access to financing for businesses in the whole region as well as for those active only in its
individual Member Countries. The Bank offers project and trade financing facilities, equity participations
and guarantees. Bank financing of projects and programs is available directly or in cooperation with other
national and international development institutions. The Bank may also, where appropriate, provide
technical assistance to potential customers.
As at financial position date the Bank's shareholders comprised of the following 11 countries: Albania,
Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, the Russian Federation, Turkey and
Ukraine.
1.2 Headquarters Agreement
The status, privileges and immunities of the Bank and persons connected therewith in the Hellenic Republic
are defined in the Headquarters Agreement between the Government of the Hellenic Republic and the
Bank (‘Headquarters Agreement’) signed on 22 October 1998.
1.3 Governing Bodies
Each of the Member States of the Bank is represented on the Board of Governors (BoG), with all powers
of the Bank vested in the BoG. With the exception of certain reserved powers, the BoG has delegated the
exercise of its powers to the Board of Directors (BoD), while retaining overall authority.
BoG and BoD members can be changed at any time upon the discretion of the respective Member State.
1.3.1 Board of Governors
Country Governor
Albania Ms. Adela Xhemali
Armenia Mr. Arthur Javadyan
Azerbaijan Mr. Samir Sharifov
Bulgaria Ms. Marinela Petrova
Georgia Mr. Koba Gvenetadze
Greece Mr. Adonis-Spyridon Georgiadis
Moldova Mr. Serghei Puscuta
Romania Mr. Sebastian loan Burduja
Russia Mr. Timur Maksimov
Turkey Mr. Bulent Aksu
Ukraine Mr. Ihor Petrashko
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Notes to the Financial Statements
1.3.2 Board of Directors
Country Director
Albania Mr. Oltjon Muzaka
Armenia Mr. Andranik Grigoryan
Azerbaijan Mr. Famil Ismayilov
Bulgaria Ms. Petya Kuzeva
Georgia Mr. Nikoloz Gagua
Greece Mr. Ioannis Tsakiris
Moldova Ms. Elena Matveeva
Romania Ms. Diana Blindu
Russia Mr. Evgeny Stanislavov
Turkey Dr. Serhat Koksal
Ukraine Mr. Taras Kachka
2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS
2.1 Basis of Preparation
The financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRSs) as issued by the International Accounting Standards Board (IASB).
These financial statements for the year ended 2020 were submitted by the Management Committee to the
Board of Directors (BoD) for approval on 20 May 2021 and were approved for issuance on that date.
Pursuant to Article 23 of the Establishing Agreement, these financial statements shall be subject to
approval by the Board of Governors (BoG) in their Annual Meeting to be held on 25 June 2021.
Basis of measurement
The financial statements have been prepared on a historical cost basis except for the below assets
and liabilities which have been measured at fair value:
• Debt investment securities at fair value through other comprehensive income;
• Loans at fair value through profit or loss;
• Equity investments at fair value through profit or loss;
• Equity investments at fair value through other comprehensive income;
• Derivative financial instruments; and
• Plan assets.
The carrying values of recognized assets and liabilities that are hedged items in fair value hedges,
and otherwise carried at amortized cost, are adjusted to record changes in fair value attributable
to the risks that are being hedged.
Functional and presentation currency
The Bank’s functional currency is the Euro (EUR) as defined by the European Central Bank (ECB).
The Euro is most representative of the Bank’s operations and environment as a significant
percentage of the Bank’s lending operations are in Euro, and the administrative expenses and
capital expenditures are primarily denominated and settled in this currency. The Bank’s
presentation currency is the EUR and values are rounded to the nearest thousand unless
otherwise stated.
Use of Estimates and Judgments
The preparation of the financial statements in conformity with IFRS requires management to make
judgments and use of estimates and assumptions that affect the application of the accounting
policies and the reported amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements and the reported amounts of revenues and
12
expenses during the reporting period. Actual results may differ from those reported. Estimates and
underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognized
prospectively.
The areas where the Bank has applied judgement and used estimates and assumptions are:
estimation of expected credit losses of loans-and-receivables, valuation of financial instruments
not quoted in active markets, including OTC derivatives and certain debt securities, impairment of
investment securities, estimation of retirement benefits obligation, and contingencies from
litigation.
The areas involving a higher degree of judgment or areas where assumptions and estimates are
significant to the financial statements are disclosed in the Note “Use of estimates”.
2.2 Going Concern
The financial statements have been prepared on a going concern basis. This year began with the outbreak
of a new strain of Coronavirus (Covid-19) pandemic that was announced by the World Health Organization
(WHO) in March 2020 and has already negatively impacted the economies of the countries that the Bank
works with. Following the WHO announcements as well as the measures taken by the respective
governments as a response, the Bank has proceeded with the following:
• The Bank has activated the internal Pandemic Response Plan, and staff can move to 'remote
working', which may be extended according to how the situation unfolds in the host country. In
terms of its everyday operations, the Bank has taken all requisite steps to ensure business
continuity, the safety of its staff, and to comply with the emergency measures imposed by the host
country.
• The Bank monitors country by country measures taken by each government and their impact on
its loan portfolio. It maintains contacts with clients and we will continue with the preparation of
projects, but the main focus is the outstanding loan portfolio which is carefully analyzed and
regularly reviewed in light of the very rapid developments.
• The Bank closely monitors its liquidity position and is prepared to take short term measures as and
if required in order to safeguard its interests and maintain key ratios at comfortable levels. Such
measures can include access to short-term borrowings at higher costs than normally accepted,
delaying draw-downs to operations with customer consent and curtailing administrative expenses
as necessary. Additionally, the Bank has reduced undertaking new commitments temporarily, thus
commitment levels are expected to remain steady, or even temporarily decline as a result.
• Moreover, the Bank will monitor developments in the financial markets for assessing the impact
on its investment portfolio as well as for suitable funding opportunities.
Overall, the Bank is assessing the virus pandemic in the Region the Bank operates in and has a robust
mechanism and process in place to follow up developments and adjust its operations accordingly in order
to ensure effective and efficient management of this difficult situation. As the Bank maintains its operational
capacity and retains its strong capital and liquidity positions, the Board of Directors is of the view that the
Bank will continue to operate as a going concern for the next 12 months from the date of approval of the
financial statements.
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3. SIGNIFICANT ACCOUNTING POLICIES
A summary of the Bank’s accounting policies applied in the preparation of these financial statements are
presented in this section. These policies have been are the same as those applied for the comparative
period presented taking into account the amendments to standards which were issued by the International
Accounting Standards Board (IASB), which are further analyzed below:
3.1 Adoption of New and Amended Standards (IFRS)
New standards and amendments to standards which were issued by the International Accounting
Standards Board (IASB), applied on 1 January 2020:
• IFRS 17: Insurance Contracts
IFRS 17 requires insurance liabilities to be measured at a current fulfillment value and provides a
more uniform measurement and presentation approach for all insurance contracts. These
requirements are designed to achieve the goal of a consistent, principle-based accounting for
insurance contracts. IFRS 17 supersedes IFRS 4 Insurance Contracts as of 1 January 2023. The
adoption is not expected to have any material impact on the Bank’s financial statements.
• Amendments to References to the Conceptual Framework in IFRS Standards
Together with the revised Conceptual Framework published in March 2018, the IASB also issued
Amendments to References to the Conceptual Framework in IFRS Standards. The document
contains amendments to IFRS 2, IFRS 3, IFRS 6, IFRS 14, IAS 1, IAS 8, IAS 34, IAS 37, IAS 38,
IFRIC 12, IFRIC 19, IFRIC 20, IFRIC 22, and SIC-32. Not all amendments, however update those
pronouncements with regard to references to and quotes from the framework so that they refer
to the revised Conceptual Framework. Some pronouncements are only updated to indicate which
version of the framework they are referencing to (the IASC framework adopted by the IASB in
2001, the IASB framework of 2010, or the new revised framework of 2018) or to indicate that
definitions in the standard have not been updated with the new definitions developed in the
revised Conceptual Framework. Annual reporting periods beginning on or after 1 January 2020.
The adoption did not have any material impact on the Bank’s financial statements.
• Definition of a Business (Amendments to IFRS 3)
The amendments in Definition of a Business (Amendments to IFRS 3) are changes to Appendix

A Defined terms, the application guidance, and the illustrative examples of IFRS 3 only. They:
clarify that to be considered a business, an acquired set of activities and assets must include, at
a minimum, an input and a substantive process that together significantly contribute to the ability
to create outputs; narrow the definitions of a business and of outputs by focusing on goods and
services provided to customers and by removing the reference to an ability to reduce costs; add
guidance and illustrative examples to help entities assess whether a substantive process has been
acquired; remove the assessment of whether market participants are capable of replacing any
missing inputs or processes and continuing to produce outputs; and add an optional concentration
test that permits a simplified assessment of whether an acquired set of activities and assets is not
a business. Annual reporting periods beginning on or after 1 January 2020. The adoption did not
have any material impact on the Bank’s financial statements.
• Definition of Material (Amendments to IAS 1 and IAS 8)
The amendments in Definition of Material (Amendments to IAS 1 and IAS 8) clarify the definition
of material’ and align the definition used in the Conceptual Framework and the standards. Annual
reporting periods beginning on or after 1 January 2020. The adoption did not have any material
impact on the Bank’s financial statements.
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• Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7)
The amendments in Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS
7) clarify that entities would continue to apply certain hedge accounting requirements assuming
that the interest rate benchmark on which the hedged cash flows and cash flows from the hedging
instrument are based will not be altered as a result of interest rate benchmark reform. Annual
reporting periods beginning on or after 1 January 2020. The adoption did not have any material
• Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)
The amendments aim to promote consistency in applying the requirements by helping companies
determine whether, in the statement of financial position, debt and other liabilities with an uncertain
settlement date should be classified as current (due or potentially due to be settled within one year)
or non-current. Annual reporting periods beginning on or after 1 January 2023. The adoption is not
expected to have any material impact on the Bank’s financial statements.
• Property, Plant and Equipment — Proceeds before Intended Use (Amendments to IAS 16)
The amendments prohibit deducting from the cost of an item of property, plant and equipment any
proceeds from selling items produced while bringing that asset to the location and condition
necessary for it to be capable of operating in the manner intended by management. Instead, an
entity recognizes the proceeds from selling such items, and the cost of producing those items, in
profit or loss. Annual reporting periods beginning on or after 1 January 2022. The adoption is not
expected to have any material impact on the Bank’s financial statements.
• Onerous Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37)
The amendments specify that the ‘cost of fulfilling’ a contract comprises the ‘costs that relate
directly to the contract’. Costs that relate directly to a contract can either be incremental costs of
fulfilling that contract (examples would be direct labor, materials) or an al location of other costs
that relate directly to fulfilling contracts (an example would be the al location of the depreciation
charge for an item of property, plant and equipment used in fulfilling the contract). Annual reporting
periods beginning on or after 1 January 2022. The adoption is not expected to have any material
• Annual Improvements to IFRS Standards 2018–2020
Makes amendments to the following standards:

IFRS 1 – The amendment permits a subsidiary that applies paragraph D16(a) of IFRS 1 to measure
cumulative translation differences using the amounts reported by its parent, based on the parent’s
date of transition to IFRSs.
IFRS 9 – The amendment clarifies which fees an entity includes when it applies the ‘10 per cent’
test in paragraph B3.3.6 of IFRS 9 in assessing whether to derecognize a financial liability. An
entity includes only fees paid or received between the entity (the borrower) and the lender,
including fees paid or received by either the entity or the lender on the other’s behalf.
IFRS 16 – The amendment to Illustrative Example 13 accompanying IFRS 16 removes from the
example the illustration of the reimbursement of leasehold improvements by the lessor in order to
resolve any potential confusion regarding the treatment of lease incentives that might arise
because of how lease incentives are illustrated in that example.
IAS 41 – The amendment removes the requirement in paragraph 22 of IAS 41 for entities to
exclude taxation cash flows when measuring the fair value of a biological asset using a present
value technique.
Annual reporting periods beginning on or after 1 January 2022. The adoption is not expected to
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• Covid-19-Related Rent Concessions (Amendment to IFRS 16)
The amendment provides lessees with an exemption from assessing whether a COVID-19-related
rent concession is a lease modification. Annual reporting periods beginning on or after 1 June
2020. The adoption did not have any material impact on the Bank’s financial statements.
• Amendments to IFRS 17
Amends IFRS 17 to address concerns and implementation challenges that were identified after
IFRS 17 Insurance Contracts was published in 2017. The main changes are:
- Deferral of the date of initial application of IFRS 17 by two years to annual periods
beginning on or after 1 January 2023.
- Additional scope exclusion for credit card contracts and similar contracts that provide
insurance coverage as well as optional scope exclusion for loan contracts that transfer
significant insurance risk.
- Recognition of insurance acquisition cash flows relating to expected contract renewals,
including transition provisions and guidance for insurance acquisition cash flows
recognized in a business acquired in a business combination.
- Clarification of the application of IFRS 17 in interim financial statements allowing an
accounting policy choice at a reporting entity level.
- Clarification of the application of contractual service margin (CSM) attributable to
investment return service and investment related service and changes to the
corresponding disclosure requirements.
- Extension of the risk mitigation option to include reinsurance contracts held and non-
financial derivatives.
- Amendments to require an entity that at initial recognition recognizes losses on onerous
insurance contracts issued to also recognize a gain on reinsurance contracts held.
- Simplified presentation of insurance contracts in the statement of financial position so that
entities would present insurance contract assets and liabilities in the statement of financial
position determined using portfolios of insurance contracts rather than groups of insurance
contracts.
- Additional transition relief for business combinations and additional transition relief for the
date of application of the risk mitigation option and the use of the fair value transition
approach.
Annual reporting periods beginning on or after 1 January 2023. The adoption is not expected to
• Classification of Liabilities as Current or Non-current — Deferral of Effective Date

(Amendment to IAS 1)
The amendment defers the effective date of the January 2020 amendments by one year, so that
entities would be required to apply the amendment for annual periods beginning on or after 1
January 2023. The adoption is not expected to have any material impact on the Bank’s financial
statements.
• Interest Rate Benchmark Reform — Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS
4 and IFRS 16)
The amendments in Interest Rate Benchmark Reform — Phase 2 (Amendments to IFRS 9, IAS
39, IFRS 7, IFRS 4 and IFRS 16) introduce a practical expedient for modifications required by the
reform, clarify that hedge accounting is not discontinued solely because of the IBOR reform, and
introduce disclosures that allow users to understand the nature and extent of risks arising from the
IBOR reform to which the entity is exposed to and how the entity manages those risks as well as
the entity’s progress in transitioning from IBORs to alternative benchmark rates, and how the entity
is managing this transition. Annual reporting periods beginning on or after 1 January 2021. The
Bank is currently reviewing the impact of this standard.
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• Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
The amendments require that an entity discloses its material accounting policies, instead of its
significant accounting policies. Further amendments explain how an entity can identify a material
accounting policy. Examples of when an accounting policy is likely to be material are added. To
support the amendment, the Board has also developed guidance and examples to explain and
demonstrate the application of the ‘four-step materiality process’ described in IFRS Practice
Statement 2. Annual reporting periods beginning on or after 1 January 2023. The adoption is not
expected to have any material impact on the Bank’s financial statements
• Definition of Accounting Estimates (Amendments to IAS 8)
The amendments replace the definition of a change in accounting estimates with a definition of
accounting estimates. Under the new definition, accounting estimates are “monetary amounts in
financial statements that are subject to measurement uncertainty”. Entities develop accounting
estimates if accounting policies require items in financial statements to be measured in a way that
involves measurement uncertainty. The amendments clarify that a change in accounting estimate
that results from new information or new developments is not the correction of an error. Annual
periods beginning on or after 1 January 2023. The adoption is not expected to have any material
impact on the Bank’s financial statements
• Editorial Corrections (various)
The IASB periodically issues Editorial Corrections and changes to IFRSs and other
pronouncements. Since the beginning of calendar 2018, such corrections have been made in
December 2018, February 2019, May 2019, December 2019, July 2020, September 2020, October
2020, and November 2020. As minor editorial corrections, these changes are effectively
immediately applicable under IFRS. The adoption did not have any material impact on the Bank’s
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3.2 Foreign Currencies Translation
Foreign currency transactions are initially recorded in EUR by applying to the foreign currency amount the
exchange rate between the EUR and the foreign currency at the rate prevailing at the date of transaction.
When preparing the financial statements exchange gains and losses arising from the translation of
monetary assets and liabilities denominated in foreign currencies at year end are recognized in the income
statement.
Monetary assets and liabilities denominated in foreign currencies are translated into Euro at the exchange
rate at the reporting date. The foreign exchange gain or loss on monetary items is the difference between
the amortized cost in Euro at the beginning of the year, adjusted for the effective interest, impairment and
prepayments during the year, and the amortized cost in the foreign currency translated at the exchange
rate at the end of the year.
Non-monetary items that are measured at historical cost in a foreign currency are translated using the
exchange rate at the date of the transaction. Foreign currency differences are generally recognized in
income statement except for foreign exchange differences on non-monetary items which are at FVTOCI
as equity investments which are recognized in other comprehensive income.
The Bank uses the official exchange rates published for the EUR by the European Central Bank (ECB).
The exchange rates used by the Bank at the financial position date were as follows.
31 December 31 December
2020 2019
= United States dollar 1.22710 1.12340
= Pound sterling 0.89903 0.85080
= Russian ruble 91.46710 69.95630
1 EUR = Azerbaijan manat 2.08900 1.90350
= Georgian lari 4.02330 3.20950
= Armenian dram 641.11000 537.26000
= Romanian leu 4.86830 4.78300
3.3 Cash and Cash Equivalents
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash on hand,
placements with other financial institutions and debt securities with maturities of three months or less from
the financial position date. These are highly liquid assets that are readily convertible to a known amount of
cash and are subject to insignificant risk of change in value due to the movements in market rates.
3.4 Recognition and Initial Measurement, and Derecognition of Financial Instruments
The Bank recognizes a financial asset or financial liability in its statement of financial position when it
becomes a party to the contractual rights or obligations.
3.4.1 Date of recognition
Financial assets and liabilities, with the exception of loans and advances to customers and
balances due to customers, are initially recognized on the trade date, i.e., the date on which the
Bank becomes a party to the contractual provisions of the instrument. This includes regular way
trades, i.e., purchase or sale of financial assets that require delivery of assets within the time frame
generally established by regulation or convention in the market place. Loans and advances to
customers are recognized when funds are transferred to the customer’s account.
Financial assets and financial liabilities are measured initially at fair value plus, for an item not at
Fair Value Through Profit and Loss (“FVTPL”), transaction costs that are directly attributable to its
acquisition or issue. The fair value of a financial instrument at initial recognition is generally its
transaction price.
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3.4.2 Date of derecognition
The Bank derecognizes a financial asset or a portion of a financial asset when (i) the contractual
rights to the cash flow from the financial asset expire, (ii) loses control of the contractual rights that
comprise the financial asset or a portion of the financial asset or (i) the Bank retains the right to
receive cash flows from the asset, but has assumed the obligation to pay it in full without material
delay to a third party under a ‘pass through’ arrangement. The Bank derecognizes a financial
liability when a liability is extinguished, that is when the obligation specified in the contract is
discharged, cancelled or expires. The evaluation of the transfer of risks and rewards of ownership
precedes the evaluation of the transfer of control for derecognition transactions.
On derecognition of a financial asset, the difference between the carrying amount of the asset (or
the carrying amount allocated to the portion of the asset derecognized) and the sum of (i) the
consideration received (including any new asset obtained less any new liability assumed) and (ii)
any cumulative gain or loss that had been recognized in OCI is recognized in income statement.
Any cumulative gain or loss recognized in OCI in respect of equity investment securities designated
as at Fair Value through Other Comprehensive Income (“FVTOCI”) is not recognized in income
statement on derecognition of such securities.
3.5 Financial Assets
The classification of financial assets defines how existing information is reflected in the financial
statements. In particular, the valuation method and the impairment calculation are defined by this
classification, which are based on criteria established by the Bank.
3.5.1 Classification and subsequent measurement
The Bank classifies a financial asset in its financial statements in one of the below three
measurement categories:
1. Financial assets measured at amortized cost (AC): this category includes each asset or
group of assets for which the Bank's business model constitutes its holding for the purpose
of collecting contractual cash flows. Financial assets are classified at AC only if both of the
following criteria are met:
- The objective of the Bank’s business model is to hold financial assets in order to
collect the contractual cash flows; and
- The contractual terms of the financial asset give rise on specified dates to cash
flows that are solely payments of principal and interest on the principal
outstanding:
The Bank includes in this category financial assets which are non-derivative with fixed or
determinable payments and with fixed maturities meeting the above criteria. They are
initially recognized at fair value plus any transaction costs and including any premium or
discount that may arise on the date of acquisition. Third party expenses, such as legal
fees, incurred in securing a loan are treated as part of the cost of the transaction. They are
subsequently measured at AC using the effective interest method, less any allowance for
expected credit losses. All such financial assets are recognized on settlement date.
These financial assets include cash and due from banks, loans and receivables accrued
that meet the above criteria.
2. Financial assets measured at fair value through other comprehensive income (FVTOCI),
with gains or losses reclassified on profit or loss on derecognition. The Bank classifies
debt instruments (including euro commercial paper (ECP)) at FVTOCI when both of the
following conditions are met:
- The instrument is held within a business model, the objective of which is achieved
by both collecting the contractual cash flows and selling financial assets; and
- The contractual terms give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal outstanding.
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FVTOCI debt instruments are subsequently measured at fair value with gains and losses
that arise from fluctuations in fair value recognized in OCI. Their fair value is determined
by reference to quoted market bid prices. On derecognition cumulative gain or loss
previously recognized in OCI are reclassified from OCI to income statement. Foreign
exchange gains or losses and interest income calculated using the effective interest rate
method are recognized in income statement.
All such financial assets are recognized on trade date.
The Expected Credit Losses (“ECL”) for debt instruments measured at FVOCI do not
reduce the carrying amount of these financial assets in the statement of financial position,
which remains at fair value. Instead, an amount equal to the allowance that would arise if
the assets were measured at amortized cost is recognized in OCI as an accumulated
impairment amount, with a corresponding charge to the profit or loss. The accumulated
loss recognized in OCI is recycled to the profit and loss upon derecognition of the assets.
3. Financial assets (equity instruments) measured at FVTOCI, with no reclassification of

gains or losses to profit or loss on derecognition. On initial recognition the Bank can make
the irrevocable election, on an instrument-by-instrument basis, to designate investments
in an equity instrument which are not held for trading nor contingent consideration
recognized by an acquirer in a business combination, as a financial asset measured at
FVTOCI. Those not elected, which are primarily listed, are measured at Fair Value
Through Profit or Loss (“FVTPL”). Dividends received are recorded in the income
statement.
After initial recognition at cost, these financial assets are subsequently measured at fair
value with all gains and losses arising from changes in fair value (realized and unrealized),
including foreign exchange gains and losses, recognized in other comprehensive income,
and are not reclassified to income statement. For those financial instruments there is no
impairment assessment. The fair value for those not purchased from an active market is
determined using accepted valuation techniques which use unobservable inputs. These
valuation techniques used are net asset value, when this is deemed to approximate fair
value, and earnings-based valuations using comparable information and discounting cash
flows. The Bank’s equity investments are included in this category. All such financial
assets are recognized on settlement date.
4. Financial assets measured at FVTPL: this category includes financial assets that do not
meet the criteria to be classified in any of the above categories as well as financial assets
that the Bank holds for trading. Their classification depends primarily on the following two
important factors (i) the Bank’s business model for these assets and (ii) the characteristics
of the contractual cash flows of the asset.
These financial assets are initially measured at their fair value and subsequently carried
at fair value on the statement of financial position with all changes in fair value gains and
losses and foreign exchange gains and losses, recognized in the income statement in the
period in which they occur. Transaction costs on these financial assets are expensed in
the income statement. This category includes derivative financial instruments, equity
securities as well as any loans for which either of the criteria for recognition at AC is not
met. It can also include a debt instrument or an equity instrument that is not within the
category nor measured at FVTOCI. All such financial assets are recognized on trade date.
In addition, a debt instrument that could meet AC criteria can be designated at initial
recognition as at FVTPL. This classification option, which is irrevocable, is used when the
designation eliminates a measurement or recognition inconsistency, referred to as an
‘accounting mismatch’, which would arise from measuring financial assets and liabilities
on a different basis in relation to another financial asset or liability.
As at the reporting date the Bank has not designated, at initial recognition, any financial
asset as at FVTPL.
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3.5.2 Measurement
The Bank measures financial assets at fair value on initial recognition, as detailed above. In the
event the Bank considers that the fair value on initial recognition differs from the transaction price,
that difference is recognized as a gain or loss on initial recognition but only if the fair value is based
on a requested active market price for identical assets or is based on a valuation technique using
data solely from identified markets. In all other cases, the difference between the transaction price
and the fair value is deferred and is only recognized in the income statement when the inputs
become observable, or when the instrument is derecognized.
Financial assets that are subsequently measured at either AC or debt instruments at FVTOCI, are
subject to provisions for impairment.
Based on the Bank's credit policy, the Bank does not originate credit-impaired financial assets, nor
does the Bank purchase credit-impaired assets, exception being those loans would be acquired at
a deep discount.
Financial assets are not reclassified subsequent to their initial recognition, except in the period
after the Bank changes its business model for managing financial assets.
3.5.3 Business model assessment
The factor of the business model refers, amongst others, to the manner in which the Bank manages
its financial assets by classifying them in portfolios that are part of its business model. The
assessment process applied by the Bank through its business model, based on strategic
objectives, classifies its assets in the following three categories in accordance with IFRS 9:
i) Hold to collect
Each asset or group of assets for which the Bank's business model recommends that it be held for
the purpose of collecting contractual cash flows is classified as ‘Hold to collect’.
ii) Hold to collect and sell
Each asset or group of assets for which the Bank's business model recommends that it be held for
the purpose of collecting contractual cash flows and selling them when the strategic planning of
their acquisition has been achieved is classified as ‘Hold to collect and sell’.
iii) Trading portfolio
The financial assets held for trading are classified as ‘Trading portfolio’.
The adopted business model determines the source of revenue, as it arises from individual
portfolios either through the collection of contractual cash flows or from the sale of financial assets
or the combination of the above.
The assessment of the business model reflects the Bank's strategy under normal business
conditions. The assessment is not affected by actions required in ‘emergency situations’ (e.g.
liquidity needs, non-inherent capital requirements for credit risk, etc.). Also, Management decisions
taken to comply with new regulatory guidelines are not included in the assessment.
In general, the Bank has included the majority of its loan portfolios in the hold-to-collect business
model. The assessment of a business model is made within the definition of operational objectives
as defined by the Bank's Management, as well as in the operational management of its assets.
The assessment is effected at portfolio level rather than at individual asset levels.
The Business Model applied to loan portfolio, treasury portfolio and equity investment portfolio is
reassessed at each reporting period. The reassessment of the Business Model has been
established in order to determine if evidence initially used has changed.
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3.5.4 Loans
Loans originated by the Bank, is where money is provided directly to the borrower. Loans are
initially recorded at fair value, which is usually the net amount disbursed at inception including
directly attributable origination costs and certain types of fees or commission (e.g. syndication
commission, front-end, commitment fees and handling charges) that are regarded as an
adjustment to the effective interest rate of the loan, and are subsequently measured at amortized
cost using the effective interest rate method.
The Bank classifies in loan category bonds which are purchased with a view of a development
impact and such purchases are performed based on the Bank’s loan financing criteria and follow
the thorough appraisal and approval process of the Bank. Such bonds at 31 December 2020 were
a gross amount of EUR 277,588 thousand (2019: EUR 175,367 thousand). Management has
concluded that presentation within loans present fairly the Bank’s financial position.
Loans that are designated as at FVTPL are recognized at a value arrived at by using a combination
of discounted cash flow models. These models incorporate market data pertaining to interest rates,
a borrower’s credit rating, and underlying assets. Where unobservable inputs have been used, a
sensitivity analysis has been included under ‘fair value hierarchy’ described within the ‘Risk
Management’ section of this report.
3.6 Impairment
3.6.1 Financial assets
The Bank records an allowance for expected credit loss for all loans and loans receivables, and
other debt instruments held at amortized cost, together with off balance sheet items (loan
commitments and financial guarantee contracts). In this section, all referred to as ‘financial
instruments’. Equity instruments are not subject to impairment under IFRS 9.
i) Calculation of expected credit loss
ECLs are a probability-weighted average estimate of credit losses that reflects the time value of
money. Upon initial recognition of the financial instruments in scope of the impairment policy, the
Bank records a loss allowance equal to 12-month ECL, being the ECL that result from default
events that are possible within the next twelve months. Subsequently, for those financial
instruments that have experienced a significant increase in credit risk (SICR) since initial
recognition, a loss allowance equal to lifetime ECL is recognized, arising from default events that
are possible over the expected life of the instrument. The expected credit losses are weighted on
the basis of three macroeconomic scenarios (adverse, basic and favorable).
For the purposes of calculating expected credit losses, the financial instruments are classified in
three stages as follows:
• Stage 1: Stage 1 includes performing exposures that do not have significant increase in
credit risk since initial recognition. Stage 1 also includes exposures for which credit risk
has been improved and the exposure has been reclassified from Stages 2 or 3. In this
stage expected credit losses are recognized based on the probability of default within the
next 12 months.
• Stage 2: Stage 2 includes performing exposures for which there has been a significant
increase in credit risk since initial recognition. Stage 2 also includes exposures for which
the credit risk has improved, and the exposure has been reclassified from stage 3. In this
stage, lifetime expected credit losses are recognized.
• Stage 3: Stage 3 includes non-performing / credit-impaired exposures. In this stage lifetime

expected credit losses are recognized.
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The Bank calculates impairment losses on a portfolio basis, except for financial assets that are
credit-impaired in which case they are calculated on an individual basis. The Bank applies three
main components to measure expected credit losses which are a LGD, PD and EAD, and assigns
general market scenarios for potential credit risk deterioration. There can be transfers of exposures
from one stage to another, depending on whether there is a change in the credit risk of that
exposure. Probability of default is an estimate of the likelihood of default over a given time horizon.
The Bank uses information obtained from the Global Emerging Markets (GEMs) database in order
to assign LGD to its loan asset classes. GEMs is an International Financial Institution (IFI) wide
initiative designed to pool default and recovery rates experienced by IFIs in emerging markets.
Treasury asset classes derive their PDs from the assigning rating agency. LGD is an estimate of
the loss arising on default. The Bank uses information obtained from the GEMs database to assign
LGDs to its lending asset classes, and treasury asset classes derive their LGDs from the assigning
rating agency.
ii) Basic parameters used for the calculation of expected credit loss
The calculation of expected credit losses is based on the following parameters:
• Probability of Default (PD) represents the probability that a debtor will default on his debt
obligations either over the next twelve months or over the remaining maturity of his debt.
In accordance with IFRS 9, the Bank uses non-discriminatory point-in-time PDs that adjust
to macroeconomic assumptions using the Expected Credit Loss.
• Exposure at Default (EAD) is defined as the estimate of the exposure at a future default
date, taking into account expected changes in the exposure after the reporting date,
including repayments of principal and interest, and undrawn commitments based on the
Bank’s own experience.
• Loss Given Default (LGD) represents the extent of the loss that the Bank expects for
exposures that are in default and is defined as the difference between the contractual cash
flows and those that the Bank expects to collect, including collateral amounts. LGD, which
is usually expressed as a percentage of the EAD, varies according to the category of the
counterparty, the category and priority of the claim, the existence of collateral and other
credit enhancements.
The Bank assigns credit rating to each loan at inception based on the internal scorecard
methodologies for Financial Institutions, Corporates or Project Finance and all loans are subject to
annual credit review if rated to a category up to BB+, while all loans below that rating are subject
to semi-annual credit review. The credit rating is primary input to the PD which is calculated based
on statistical model and incorporates macroeconomic projections.
The LGD estimates are according to values and determined estimates mainly by geography and
by type of counterparty, with three main exposure classes: sovereign, public and private sectors.
In case of sovereign default of member countries, the Bank believes that its payment would remain
uninterrupted, benefitting from its preferred creditor status resulting in no credit risk of impairment
loss from sovereign exposures or loans guaranteed by sovereign.
The Bank calculates expected credit losses based on the weighted probability of three scenarios.
More specifically the Bank uses a statistical model to produce forecasts of the possible evolution
of macroeconomic variables (GDP and unemployment rate) that affect the level of expected credit
losses of loans under a baselines and under alternative macroeconomic scenarios (adverse and
favorable) and also assigns the cumulative probabilities associated with these scenarios. The
baseline scenario is the most likely scenario and is in line with the Bank's information for strategic
planning and budgeting purposes.
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iii) Significant increase in credit risk
At each reporting date, the Bank assesses whether the credit risk on a financial instrument has
increased significantly since initial recognition. When making the assessment, the Bank compares
the risk of a default occurring on the financial instrument as at the reporting date with the risk of a
default occurring on the financial instrument as at the date of initial recognition and considers
reasonable and supportable information, that is available without undue cost or effort, that is
indicative of significant increases in credit risk since initial recognition.
In order to determine whether there has been a significant increase in the credit risk since
origination, and hence transition to Stage 2, a combination of quantitative and qualitative risk
metrics are used. All loans with at least a 3-notch downgrade in PD on the Bank’s internal ratings
scale since origination, all loans for which the contractual payments are overdue by between 31
and 90 days inclusive, as well as all loans placed on the ‘watch list’ are transitioned to Stage 2.
For financial guarantee contracts, the date the Bank becomes a party to the irrevocable
commitment is considered to be the date of initial recognition for the purpose of assessing the
financial instrument for impairment. In assessing whether there has been a significant increase in
credit risk since initial recognition of a financial guarantee contract, the Bank considers the risk that
the specified debtor will default on the contract in line with the above determination for loans.
Generally, there will be a significant increase in credit risk before a financial asset becomes credit-
impaired or an actual default occurs. The assessment of significant increase in credit risk is key in
transferring an exposure from Stage 1 to Stage 2 and the respective change in the ECL
measurement from 12-month to lifetime ECL.
iv) Credit-impaired
A financial asset is credit-impaired when one or more events that have a detrimental impact on the
estimated future cash flows of that financial asset have occurred. Evidence that a financial asset
is credit- impaired includes observable data about the following events:
- Significant financial difficulty of the issuer or the borrower;
- A breach of contract, such as a default or past due event;
- The lender(s) of the borrower, for economic or contractual reasons relating to the
borrower's financial difficulty, having granted to the borrower a concession(s) that the
lender(s) would not otherwise consider;
- It is becoming probable that the borrower will enter bankruptcy or other financial
reorganization;
- The disappearance of an active market for that financial asset because of financial
difficulties; or
- The purchase or origination of a financial asset at a deep discount that reflects the incurred
credit losses.
It may not be possible to identify a single discrete event – instead, the combined effect of several
events may have caused financial assets to become credit-impaired.
v) Definition of default
The definition of default used for determining the risk of a default occurring shall be applied
consistently to all financial instruments unless information becomes available that demonstrates
that another default definition is more appropriate for a particular financial instrument. The Bank's
definition of default is based on the regulatory definition under Article 178 of the ‘Regulation (EU)
No 575/2013 of the European Parliament and of the Council of the European Union of 26 June
2013 on prudential requirements for credit banks and investment firms and amending Regulation
(EU) 648/2012’ (CRR). A default is considered to have occurred when either of the following
conditions had taken place.
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a. Qualitative
Unlikeliness to Pay (UTP) criterion: the Bank considers that the obligor is unlikely to pay
its credit obligations to the Bank without recourse by the Bank to actions such as realizing
security. Below there are some elements that are taken as indications of unlikeliness to
pay (in line with CRR (Article 178)).
- The Bank puts the credit obligation on non-accrued status.

- The Bank recognizes a specific credit adjustment resulting from a significant
perceived decline in credit quality subsequent to the institution taking on the
exposure.
- The Bank has filed for the obligor's bankruptcy or a similar order in respect of an
obligor's credit obligation to the Bank, the parent undertaking or any of its
subsidiaries.
- The obligor has sought or has been placed in bankruptcy or similar protection
where this would avoid or delay repayment of a credit obligation to the Bank, the
parent undertaking or any of its subsidiaries.
b. Quantitative
Past due criterion: the exposure is past due more than 90 days on any credit obligation to
the Bank.
Impairment losses for guarantees are recognized while a guarantee is in effect and the
amounts are determined based on the level of utilization of the guarantee. The
methodology is consistent to that of loan commitments, and such losses are included in
‘Other liabilities’.
Interest income is calculated on the gross carrying amount for financial assets in Stage 1 and 2.
As the primary definition for credit-impaired financial assets moving to Stage 3, the Bank applies
the definition of default, and interest income is calculated on the net carrying amount for these
financial assets only.
If the amount of impairment subsequently decreases due to an event occurring after a write-down,
the release (i.e. reverse) of the impairment is credited to the provision for impairment asset losses.
Unwinding of the discount is treated as income and remaining provision is then reassessed.
3.6.2 Non-financial assets
At each financial position date, the Bank reviews the carrying value of the non-financial assets and
assesses whether there is any indication of impairment. If such indications exist, an analysis is
performed to assess whether the book value of the specific assets can be recovered. The
recoverable amount is the higher amount between the fair value less costs of disposal and of
the value in use (as calculated from the net cash flows). If the carrying value of an intangible asset
exceeds its recoverable value, then an impairment loss is recorded in the income statement.
3.6.3 Renegotiated financial assets
When necessary, the Bank seeks to restructure a financial asset that may involve extending the
payment arrangements and the agreement of new loan terms and conditions. These are generally
renegotiated in response to an adverse change in the financial condition of the borrower.
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Modifications occur when the contractual cash flows of a financial asset are renegotiated or
otherwise modified. Some modifications result in derecognition of the existing asset and
recognition of a new asset with the difference recognized as a derecognition gain or loss, to the
extent that an impairment loss has not already been recorded, while other modifications do not
result in derecognition. Modifications that result in derecognition are considered to be substantial
modifications. A significant or substantial change is defined when the customer enters into a new
loan contract (i.e. completely new product and new pricing) that has a different interest rate type,
loan amount, term period (temporary term extension is excluded), and/or customer (e.g. from
single customer to joint or change in one of the joint customer names).
A distressed restructuring is an indication of unlikeliness to pay where this is likely to result in a

diminished financial obligation caused by the material (change in the net present value of the asset
by more than 10%) forgiveness, or postponement of either principal, interest or, where relevant
fees. Distressed restructuring occurs when forbearance measures have been extended towards a
debtor. Therefore, those forborne exposures where the forbearance measures are likely to result
in a diminished financial obligation are classified as defaulted.
Restructured operations will be considered cured and normalized after two successful repayments
(average of 6 months per repayment) and could therefore be subject to a Stage movement.
For loans that are modified the Bank recalculates the gross book value based on the revised cash
flows on the financial asset and recognizes the profit or loss from the modification in income
statement. The new gross book value is recalculated by discounting the modified cash flows at the
original effective interest rate.
3.6.4 Write-offs
According to the IFRS 9 (B5.4.9), the gross carrying amount of a financial asset may be directly
reduced when there is no reasonable expectation of recovering the financial asset in its entirety or
a portion of it. As such, the Bank may record a write-off of Stage 3 loans. The Bank may also, on
an ad-hoc basis, examine the need for any further write-offs of Stage 2 loans if there is relevant
evidence.
3.6.5 Write-backs
Recoveries (write-backs) of an asset, or part thereof, are credited to the income statement if
previously written off.
3.7 Financial Liabilities
The Bank recognizes a financial liability in its financial statements at the time of the arising from the item
(that is, the day the transaction took place). Financial liabilities primarily include (a) borrowings and (b)
other liabilities.
3.7.1 Borrowings
Borrowing transactions which are amounts due to financial institutions and debts evidence by
certificates, are recognized in the statement of financial position at the time the funds are
transferred to the Bank. They are measured initially at the fair value of the funds transferred, less
any transaction costs. They are subsequently measured at amortized cost unless they qualify for
hedge accounting in which case the amortized cost is adjusted for the fair value movements
attributable to the to the risks being hedged. Interest expense is accrued in the income statement
within “Interest expense” using the effective interest rate method.
3.7.2 Other liabilities
Other liabilities that are not derivatives or designated at FVTPL, are recorded at amortized cost.
The amounts include accrued finance charges on borrowings and other accounts payable.
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3.8 Offsetting of Financial Assets and Liabilities
Offsetting of financial assets and liabilities in the financial statements is permitted if, and only if, there is a
currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a
net basis, or to realize the asset and settle the liability simultaneously.
3.9 Derivatives
In the ordinary course of business, the Bank enters into various types of transactions that involve derivative
financial instruments. A derivative financial instrument is a financial contract between two parties where
payments are dependent upon movements in price in one or more underlying financial instruments,
reference rates or indices.
The Bank primarily makes use of derivatives for the below strategic purposes:
- Many of the Bank’s issued securities, excluding commercial paper, are individually paired
with a swap to convert the issuance proceeds into the currency and interest rate structure
sought by the Bank.
- To manage the net interest rate risks and foreign exchange risks arising from all financial
assets and liabilities.
- Through currency swaps, to manage funding requirements for the Bank’s loan portfolio.
Derivatives can include interest rate and cross currency swaps, forward foreign exchange contracts,
interest rate future contracts, and options on interest rates and foreign currencies. Such financial
instruments are initially recognized in the statement of financial position at cost and are carried as assets
when fair value is positive and as liabilities when fair value is negative. Changes in fair value of derivatives
are included in the income statement. Fair values are obtained from quoted market prices, to the extent
publicly available, discounted cash flows and options pricing models as appropriate.
3.9.1 Economic Hedge
Included in this classification are any derivatives entered into by the Bank in order to economically
hedge its exposures for risk management purposes that are not designated in hedge relationships
as they do not meet the IAS 39 hedge accounting criteria.
The Bank enters into such derivatives, to protect the Bank from financial risks such as currency
risk, market price risk and interest rate risk. Such hedges are entered into to lessen or eliminate
economic exposure.
The Bank’s policies on risk management are to not take significant interest rate or foreign
exchange risks, and to aim where possible to match assets and liabilities and derivatives that can
only be used for economic hedge. The majority of the Bank’s lending activities is at floating rates
linked to USD Libor or Euribor. When lending at a fixed rate the Bank will often use interest rate
swaps to produce floating rate interest payments. The Bank’s borrowings, particularly by bond
issuance, tend to be fixed rate and sometimes not in EUR or USD and the Bank will use either
interest rate swaps or cross currency interest rate swaps to produce floating rate liabilities in USD
or EUR. All the Bank’s interest rate or cross currency swaps are explicitly tied to a balance sheet
asset or liability. Typically, the fixed rate on the swap and the matching asset or liability have the
same characteristics (term, payment dates etc.).
Foreign exchange forwards (paired purchases and sales of currencies on different dates) of
maturities typically less than three months are not tied to specific assets or liabilities. These are
undertaken to manage surpluses and shortfalls in EUR and USD and are not undertaken for
speculative purposes.
All derivatives are documented under International Swaps and Derivatives Association (ISDA)
master netting agreement with Credit Swap Annexes (CSAs) and marked to market and
collateralized daily.
The Department of Treasury, under the guidance of ALCO, is responsible for the primary usage
and managing interest rate and currency risks in the Bank’s statement of financial position.
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3.10 Financial Guarantees
Issued financial guarantees are initially recognized at their fair value, being the premium (fee) received and
subsequently measured at the higher of the unamortized balance of the related fees received and deferred,
and the expenditure required to settle the commitment at the financial position date. The latter is recognized
when it is both probable that the guarantee will require to be settled and that the settlement amount can
be reliably estimated. Financial guarantees are recognized within other financial assets and other financial
liabilities.
3.11 Property and Equipment
Property and equipment include leasehold improvements and transportation and other equipment.
Property and equipment are initially recorded at cost, which includes all costs that are required to bring an
asset into operating condition. Subsequently to initial recognition, property and equipment are measured
at cost less accumulated depreciation and accumulated impairment losses.
Costs incurred subsequently to the acquisition of an asset, which is classified as property and equipment
are capitalized, only when it is probable that they will result in future economic benefits to the Bank beyond
those originally anticipated for the asset, otherwise they are expensed as incurred.
At each reporting date the Bank assesses whether there is any indication that an item of property and
equipment may be impaired. If any such indication exists, the Bank estimates the recoverable amount of
the asset. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is
written down immediately to its recoverable amount. Gains and losses on disposal of property and
equipment are determined by reference to their carrying amount and are taken into account in determining
net income or loss.
Depreciation is provided to write off the cost of each asset to their residual values on a straight-line basis
over their estimated useful lives. The annual depreciation rates applied were as follows:
- Expenditure on leasehold buildings and improvements are

depreciated over the remaining term of the lease -
- Transportation vehicles 20.0%
- Furniture and office accessories 20.0%
- Personal computers 33.3%
- Office and telecommunication equipment 20.0%
3.12 Intangible Assets
Intangible assets comprise software expenditures and other intangible assets. These assets are amortized
on a straight-line basis over the best estimate of their useful lives, which is software for desktops of three
years and software for servers of five years. At each reporting date, management reviews intangible assets
and assesses whether there is any indication of impairment. If such indications exist an analysis is
performed to assess whether the carrying amount of intangible assets is fully recoverable. A write-down is
made if the carrying amount exceeds the recoverable amount.
3.13 Right of Use Assets
Right-of-use assets comprise those assets that the Bank, as the lessee, has control of the underlying
assets during the term of the lease. Control is considered to exist if the Bank has:
- The right to obtain substantially all of the economic benefits from the use of an identified
asset; and
- The right to direct the use of that asset.
The Bank provides for the recognition of a right-of-use asset and a lease liability upon lease
commencement in case that there is a contract, or part of a contract, that conveys to the Bank the right to
use an asset for a period of time in exchange for a consideration. More details are provided within the lease
accounting policy Note 3.21.
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3.14 Taxation
In accordance with Article 52 of the Establishing Agreement, the Bank, its assets, property, income and its
operations and transactions are exempt from all taxation and all customs duties in all Member Countries.
The Bank is also exempt from any obligation for payment, withholding or collection of any tax or duty. Also,
no tax shall be levied on salaries or emoluments paid by the Bank to employees. These tax exemptions
are also included and elaborated upon in Article 12 of the Headquarters Agreement with the Hellenic
Government, ratified by Greek Law 2380/No.38/7.3.1996.
3.15 Provisions
The Bank records provisions for present obligations and risks when the following circumstances exist (a)
there is an existing legal or constructive obligation as a result of past events (b) for the obligation to be
settled an outflow of resources embodying economic benefits is present and (c) a reliable estimate of the
amount of the obligation can be made.
3.16 Share Capital and Dividends
In accordance with Article 36 of the Establishing Agreement, the Board of Governors shall determine
annually what part of net income or surplus of the Bank from operations shall be allocated to reserves,
provided that no part of the net income or surplus of the Bank shall be distributed to members by way of
profit until the general reserves of the Bank shall have attained the level of 10% of the subscribed capital
including all paid, unpaid but payable, and unpaid but callable share capital.
3.17 Reserves and Retained Earnings
In accordance with the Establishing Agreement of the Bank the general reserve is created from the profits
of the Bank for meeting any unforeseeable risks or contingencies.
The revaluation reserve represents the accumulated change in fair value of those financial assets that are
measured at fair value through other comprehensive income of the Bank.
The retained earnings of the Bank is the accumulated undistributed and unallocated net income over the
years.
3.18 Income and Expense
Interest income and expense are recognized in the income statement using the effective interest method.
The effective interest rate (EIR) is the rate that exactly discounts estimated future cash payments or
receipts through the expected life of the financial instrument (or, where appropriate, a shorter period) to:
- The gross carrying amount of the financial asset; or

- The amortized cost of the financial liability.
When calculating the EIR for financial instruments other than purchased or originated credit-impaired
assets the Bank estimates future cash flows considering all contractual terms of the financial instrument,
but not the ECL. For purchased or originated credit-impaired financial assets, a credit-adjusted EIR is
calculated using estimated future cash flows including the ECL.
The calculation of the EIR includes transaction costs and fees paid or received that are an integral part of
the effective interest rate. Transaction costs include incremental costs that are directly attributable to the
acquisition or issue of a financial asset or financial liability.
i) Amortized cost (AC) and gross carrying amount
The AC of a financial asset or financial liability is the amount at which the financial asset or financial
liability is measured on initial recognition minus the principal repayments, plus or minus the
cumulative amortization using the effective interest method of any difference between that initial
amount and the maturity amount and, for financial assets, adjusted for any ECL allowance.
29
The gross carrying amount of a financial asset’ is the AC of a financial asset before adjusting for
any ECL allowance.
ii) Calculation of interest income and expense
Interest income and expense are recognized in the income statement for all interest bearing
instruments using the effective interest rate method. Interest income includes interest on loans and
advances to customers, coupons earned on fixed income investment securities and accrued
discount and premium on treasury bills and other instruments.
Fees and direct costs relating to a loan origination or acquiring an investment security, financing
or restructuring and to loan commitments are deferred and amortized to interest income over the
life of the instrument using the effective interest rate method.
Once a financial asset or a group of similar financial assets has been written down as a result of
an impairment loss, interest income is recognized using the rate of interest used to discount the
future cash flows for the purpose of measuring the impairment loss.
The EIR of a financial asset or financial liability is calculated on initial recognition of a financial
asset or a financial liability. In calculating interest income and expense, the EIR is applied to the
gross carrying amount of the asset (when the asset is not credit-impaired) or to the AC of the
liability. The EIR is revised as a result of periodic re-estimation of cash flows of floating rate
instruments to reflect movements in market rates of interest.
However, for financial assets that have become credit-impaired subsequent to initial recognition,
interest income is calculated by applying the effective interest rate to the net balance of the financial
asset. If the asset is no longer credit-impaired, then the calculation of interest income reverts to
the gross basis.
For financial assets that were credit-impaired on initial recognition, interest income is calculated
by applying the credit-adjusted EIR to the AC of the financial asset. The calculation of interest
income does not revert to a gross basis, even if the credit risk of the financial asset improves.
Other interest income/expense includes interest on derivatives in economic hedge using the
contractual interest rate.
iii) Fees and commissions
Fee and commission income and expense that are integral to the EIR on a financial asset or
financial liability are included in the EIR. Other fee and commission income – including account
servicing fees, investment management fees, sales commission, placement fees and syndication
fees – is recognized as the related services are performed. If a loan commitment is not expected
to result in the draw-down of a loan, then the related loan commitment fee is recognized on a
straight-line basis over the commitment period.
A contract with a customer that results in a recognized financial instrument in the Bank’s financial
statements may be partially in the scope of IFRS 9 and partially in the scope of IFRS 15. If this is
the case, then the Bank first applies IFRS 9 to separate and measure the part of the contract that
is in the scope of IFRS 9 and then applies IFRS 15 to the residual.
Fee and commission income from contracts with customers under the scope of IFRS 15 is
measured based on the consideration specified in a contract with a customer. The Bank recognizes
revenue when it transfers control over a service to a customer. The adoption of IFRS 15 had no
impact on the Bank’s financial statements as the execution and completion of the transaction
requested by a customer is done at point in time, and this is consistent with the Bank’s existing
accounting policy.
Other fee and commission expenses relate mainly to transaction and service fees, which are
expensed as the services are received.
30
iv) Interest rate benchmark reform
At present the Bank is continuing the usage of Libor as the interest rate benchmark of which the
Bank is exposed to, as there is uncertainty to the timing and precise form of the new benchmark
that has yet to be finalized. The adoption will not have any material impact on the Bank’s financial
statements.
3.19 Staff Retirement and Termination Benefits
The Bank has established a pension plan, where the fund’s assets are held separately from the Bank’s
own assets, for all its eligible employees, consisting of three pillars:
a. The first pillar is a defined post-employment benefit scheme financed entirely by the Bank.
The scheme’s funding level and the Bank’s contributions are determined on the basis of
actuarial valuations performed by qualified, independent actuaries on an annual basis at
the end of each annual reporting period. The actuarial valuation uses the projected unit
credit method and a number of financial and demographic assumptions. The most
significant assumptions include age, years of service or compensation, life expectancy,
the discount rate, expected salary increases and pension rates. The actuarial liability is
the present value of the defined benefit obligation as at the reporting date minus the fair
value of the plan assets. The Bank is under the obligation to maintain the scheme fully
funded, and to this effect, has always liquidated any past service deficit over the course of
the year following the relevant actuarial valuation.
Actuarial and asset gains or losses are recognized in ‘Other comprehensive income’, and
net gains or losses are included in remeasurements where any change in the effect of the
asset ceiling, excluding those amounts that have been already included in personnel
expenses, are also included.
b. The second pillar is a defined post-employment contribution scheme to which both the
employee and the Bank contribute equally at a rate of 0-12% of basic salary. The Bank
has no obligation to pay further contribution if the employee discontinues their contribution.
Each employee determines his/her contribution rate and the mode of investment of the
contributions.
c. The third pillar is a defined contribution scheme funded entirely by each employee, up to
40% of basic salary and is recorded in the Bank’s financial statements.
As an alternative, staff are entitled to retirement benefits from the Greek State Social Insurance Fund
(EFKA), which is a defined contribution scheme.
Current service costs in respect of both the pension plan (a) and (b) and EFKA are recognized as an
expense in the period which they relate and are included in ‘Personnel expenses’.
The Bank may offer termination benefits to employees that are separated based on the Bank’s separation
policy. These benefits, including indemnities and any related retirement benefits, are recognized in income
as an expense in the same period they are incurred.
3.20 Related Parties
Related parties include entities, which the Bank has the ability to exercise significant influence in making
financial and operational decisions. Related parities include key management personnel, and close family
members of key management personnel.
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3.21 Leases – the Bank as a Lessee
On 1 January 2019 the Bank adopted IFRS 16, ‘Leases’. This Standard has established the principles for
the recognition, measurement and presentation of leases, and provides a single lessee accounting model
that is required at the commencement date of the lease. The objective is to report information that (a)
faithfully represents lease transactions and (b) provides a basis for the amount, timing and uncertainty of
cash flows arising from leases. The Bank as a lessee is required to recognize right-of-use assets
(representing the Bank’s right to use the underlying leased assets) and a lease liability (representing the
Bank’s obligation to make lease payments), in the statement of financial position.
The Bank applied the practical expedient in IFRS 16 to contracts that were identified as leases in order to
determine whether an arrangement contains a lease, on transition to contracts that were previously
identified as leases under IAS 17 and IFRIC 4. Consequently, the Bank’s leases are only for office space;
and does not lease land, corporate vehicles, or technical or IT equipment, nor does the Bank have any
sale-and-leaseback transactions. The Bank elected to apply the modified retrospective transition approach,
without restatement of comparative figures. Under this approach, the Bank was able to choose on a lease
by lease basis to measure the right-of-use asset at the same amount as the lease liability.
The Bank’s leases for right-of-use assets are initially recognized and measured at cost similarly to other
non-financial assets, and the lease liability is initially recognized and measured at the present value of
future lease payments that are not paid at that date similarly to other financial liabilities. The lease payments
can be discounted using the interest rate implicit in the lease, if such is available, or alternatively the Bank’s
incremental borrowing rate. The Bank will apply this measurement – except for those with lease term of 12
months or less, making use of the shot-term leases and leases of low value, exemptions under this
Standard.
Regarding subsequent measurement, the Bank acting as a lessee, has applied the cost model for the
measurement of the right-of-use asset; where this asset is measured at cost, less any accumulated
depreciation and any accumulated impairment losses, and adjusted for the remeasurement of the lease
liability. The lease liability is measured by increasing the carrying amount to reflect any interest on it and
that is separately recognized as an expense; the lease liability’s carrying amount is reduced to reflect the
lease payments made. In case of any reassessments (e.g. a change in future lease payments resulting
from a change in an index or rate used to determine those payments) or lease modifications (e.g. a change
in the lease term, lease conditions or any penalty) specified, the carrying amount of the lease liability will
be remeasured to reflect revised lease payments.
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4. SIGNIFICANT ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION

UNCERTAINTY
The preparation of the Bank’s financial statements requires Management to make judgements, estimates
and assumptions that affect the reported amounts of assets and liabilities, income and expense and
accompanying notes. Uncertainty about these assumptions and estimates could result in outcomes that
require a material adjustment to the carrying amount of assets and liabilities affected in future periods. The
Bank believes that the significant judgments, estimates and assumptions used in the preparation of its
financial statements are appropriate given the factual circumstances as of the date of preparation. The
most significant areas, for which critical judgments, estimates and assumptions are required in applying
the Bank’s accounting policies, are the following:
a. Fair value estimates for financials instruments carried at fair value
b. The Bank’s method for determining the level of impairment of loan operations is described
within the Accounting and further explained in Note 5 Risk Management – credit risk
section. In accordance with IFRS 9, ECL represents the average credit losses weighted
by the probabilities of default (PD), whereby credit losses are defined as the present value
of all cash shortfalls. The ECL is calculated for both Stage 1 and Stage 2 loans by applying
the provision rate to the projected exposure at default (EAD), and discounting the resulting
provision using the loan’s effective interest rate (EIR). The provision rate is generated by
multiplying the PD rate and the loss given default (LGD) rate applicable to the loan.
A number of critical accounting estimates are therefore made in the calculation of

impairment of loan operations as follows:
• Criteria used for staging assessment of loans and advances to customers.

• Bank’s internal credit loss rating scale, which assigns PDs to individual grades.
• Assumptions for future cashflows of individually assessed credit-impaired
exposures.
• The input and assumptions used to estimate the impact of multiple economic
scenarios.
For loans that are individually assessed which have a lifetime ECL and that are credit-
impaired in Stage 3, the impairment allowance results from the impairment test that is
conducted on the basis of objective evidence obtained through a risk asset review process.
An impairment test includes projected cash in-flows and out-flows, available for debt
service until maturity, which are discounted at the original effective interest rate (EIR) to
reach a net present value for a particular operation, less any collateral that can be realized
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4.1 Covid-19
The continuation of the Covid-19 pandemic means that the Bank could face additional credit, market and
operational risks. The duration of the pandemic is difficult to predict at this time, as are the extent and
effectiveness of economic interventions by the governments and central banks in the Region of the Bank’s
operations. The Bank continues to monitor the developments and to manage the risks associated with the
Bank’s various portfolios within existing financial policies and constraints. The two main areas that affect
the Bank’s judgement and estimates are:
1. The Bank’s equity investments which will likely see a reduced fair value due to the
downward pressure, although the Bank has a small portfolio of this and therefore its
profitability will not be materially impacted from these investments.
2. The Bank’s loan portfolio due to business disruption in economic activity in the Region will
put pressure for borrowers, affecting those operating primarily in the service and consumer
goods industries. This could likely force debt restructuring and an increase in defaults
among less robust operations. The Bank’s profitability has been impacted by a severe
increase in ECL on performing loans, driven by worsening of the macro-economic outlook
scenarios.
With regard of the Bank’s operational risk the information technology (IT) systems have proven they are
stable, powerful and flexible, as the majority of the Bank’s staff were working successfully remotely. The
Bank is also investing in new IT infrastructure to expand digital and cloud transformation, as well as
strengthening the Bank’s cybersecurity and internal control systems.
34
5. RISK MANAGEMENT
The Bank’s activities are subject to a variety of risks, some of which are not within the Bank’s control:
including risks relating to changes in interest rates, foreign exchange rates, declines in liquidity and
deterioration in the credit quality of its loan portfolio. The Bank monitors and manages the maturities of its
loans, its interest rate and exchange rate exposure, its liquidity position and the credit quality of each
individual loan and equity investment in order to minimize the effects of changes in them relative to the
Bank’s profitability and liquidity position. The BoD has approved risk management policies and guidelines
that are delegated to the Management of the Bank for the identification and measurement of risk, as well
as being subject to risk limits and controls.
To manage risks the Bank has established an Asset and Liability Committee (ALCO), a Credit Committee
that implement the Bank’s credit and lending policies, the Office of the General Counsel, the Department
of Risk Management and the Department of Financial Analysis, which together are responsible for devising,
implementing and monitoring the Bank’s risk management policies, including financial, credit and market
risks.
The ALCO is responsible for monitoring and managing the Bank’s overall asset and liability position in
accordance with the Bank’s treasury policies. It monitors and manages the Bank’s liquidity position,
maturity gaps, interest income and expense and the condition of the international financial markets and is
responsible for assigning market risk limits. The ALCO consists of members of the Bank’s Management
and a member of the Department of Treasury and has regular monthly meetings.
The Credit Committee is responsible with respect to credit matters. Its key responsibilities include: approval
of lending operations for submission to the BoD for final approval, establishing specific parameters (e.g.
policies, limits, targets, guidelines) for operational decision-making, approval of changes to the manuals
that prescribe how operations are to be analyzed, approved, administered and monitored and approval of
any amendments, restructuring and other operation-related matters. The Credit Committee consists of
members of the Bank’s Management, and has regular meetings as required to monitor and manage overall
risk concentration by reference to borrower and industry exposure and critically reviews each individual
loan and equity investment proposal made by the lending business areas. A major function of the Credit
Committee is to minimize the credit risk presented by each individual loan and equity investment proposal,
and the overall portfolio risk of the Bank.
Once an operation is approved and disbursed, it is then monitored to ensure thorough and regular
evaluations of its credit quality. Operations are monitored according to a schedule coordinated by the
Department of Project Implementation and Monitoring, with inputs from the originating Operation Teams
regarding the availability of financial data. Monitoring reports are completed by the Bank’s Department of
Project Implementation and Monitoring based on financial analysis prepared by the Department of
Financial Analysis. Risk asset reviews, based on the previously mentioned monitoring reports, are
performed by the Department of Risk Management, and may result in a downgrade or upgrade of an
operation’s status and, if a significant deterioration is noted, trigger an impairment test.
Should an operation display signs of weakness during the regular monitoring and/or through risk asset
reviews, an impairment test is immediately carried out by the Department of Risk Management and
appropriate remedial actions are taken, as required. These measures include, but are not limited to, a
detailed assessment of the financial and operational performance of the operation, additional due diligence,
stopping disbursement of any undisbursed amounts, preparation of remedial strategies and carrying out
further impairment tests. Besides, in addition to regular site visits carried out by the Operations Teams,
such a visit can be conducted by the Department of Project Implementation and Monitoring and, when
appropriate, accompanied by the Department of Financial Analysis.
35
For the Bank a conservative approach to risk taking together with effective risk management, are critical
to the Bank’s continuing operations. The application of sound banking principles in the Bank’s credit
process seeks to ensure that the significant credit risks are properly identified and managed while other
risks resulting from its activities are mitigated to the extent possible.
Importantly, the Bank is recognized as an international financial institution, and as such can expect to
benefit from the preferred creditor status customarily and historically afforded to such institutions. This
preferred creditor status serves to provide an additional layer of comfort against the risks of non-payment
on sovereign debt or by private sector borrowers as a result of local laws creating a delay or freeze on
foreign-currency exchanges. The Bank is exposed to the following risks discussed below.
Financial Risk
The Bank’s exposure to financial risk is through its financial assets and financial liabilities including any
receivables from these financial assets. The key aspects of the Bank’s financial risk are (i) credit risk (ii)
liquidity risk and (iii) market risk.
a) Credit risk
The Bank is subject to credit risk, which is the risk that customers or counterparties will be unable to meet
their obligations as they fall due. Credit risk arises principally from the Bank’s lending activities as well as
other activities where the Bank is exposed to counterparty default risk. Regular reviews by the departments
of Risk Management, Financial Analysis and Project Implementation and Monitoring are conducted of all
exposures within the lending portfolios, typically on a semi-annual basis, though exposures that are
perceived to be more vulnerable to possible default are reviewed more frequently.
At each review there is (i) an assessment of whether there has been any change in the risk profile of the
exposure (ii) recommendations of actions to mitigate risk and (iii) reconfirming or adjusting the risk ratings,
and for equity investments, reviewing of fair value. Where relevant, the level of the expected credit loss is
evaluated and reconfirmed or adjusted. Responsibility for operations considered to be in jeopardy may be
transferred from the original lending department to a corporate recovery team in order to most effectively
manage the restructuring and recovery process.
For credit risks incurred by the Bank’s Treasury in its investment and hedging activities, the BoD has
approved policies and guidelines for the determination of counterparty and investment exposure limits in
bonds, that includes member state bonds, and euro commercial paper. The Bank’s Risk Management
Department assigns and monitors these counterparty and issuer credit risk limits. Treasury credit risks are
also reviewed on a regular basis by the Bank’s ALCO.
The table below summarizes the maximum exposure to credit risk without taking into consideration
collateral, other credit enhancements or provisions of impairment.
At At
Presented in EUR (000) 2020 2019
Cash and due from banks 34,328 81,271
Deposits in margin accounts 26,240 5,900
Debt investment securities 687,961 419,826
Derivative financial instruments 26,701 3,128
Loans 2,042,921 1,820,941
Equity investments 26,310 30,386
Accrued interest receivable 23,512 24,334
Other assets 9,490 11,519
On-balance-sheet 2,877,463 2,397,305
Undrawn commitments 274,031 353,496
Total 3,151,494 2,750,801
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a1. Analysis by rating agency
The tables below provide an analysis of financial assets, excluding loans which are separately provided
below in credit risk analysis, in accordance with their Moody’s (or if not by Moody’s than the equivalent of
Standard and Poor’s or Fitch) rating, as follows.
2020
Aaa – A1 – Baa1 –
Presented in EUR (000) Aa3 A3 Ba3 Unrated Total
Analysis by Moody’s rating
Cash and bank balances 34,328 - - - 34,328

Deposits in margin accounts 26,240 - - - 26,240
Debt investment securities 93,950 353,346 240,665 - 687,961
Derivatives financial instruments - - 26,701 26,701
Equity investments - - - 26,310 26,310
Accrued interest receivable - - - 23,512 23,512
Other assets - - - 9,490 9,490
At 31 December 154,518 353,346 240,665 86,013 834,542
Of which issued by
Corporates/Governments 93,950 353,346 240,665 26,310 714,271

Cash deposits at banks 60,568 - - - 60,568
Other - - - 59,703 59,703
At 31 December 154,518 353,346 240,665 86,013 834,542
Of which classified as
Fair value through profit or loss - - - 27,492 27,492

Fair value through other comprehensive income 93,950 353,346 240,665 25,519 713,480
Amortized cost 60,568 - - 33,002 93,570
At 31 December 154,518 353,346 240,665 86,013 834,542
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2019
Aaa – A1 – Baa1 –
Presented in EUR (000) Aa3 A3 Ba3 Unrated Total
Analysis by Moody’s rating
Cash and bank balances 81,271 - - - 81,271

Debt investment securities 177,917 50,213 191,696 - 419,826
Derivatives financial instruments - - - 3,128 3,128
Equity investments - - - 30,386 30,386
Accrued interest receivable - - - 24,334 24,334
Other assets - - - 11,519 11,519
At 31 December 265,088 50,213 191,696 69,367 576,364
Of which issued by
Corporates/Governments 177,917 50,213 191,696 30,386 450,212

Cash deposits at banks 87,171 - - - 87,171
Other - - - 38,981 38,981
At 31 December 265,088 50,213 191,696 69,367 576,364
Of which classified as
Fair value through profit or loss - - - 3,926 3,926

Fair value through other comprehensive income 177,917 50,213 191,696 29,588 449,414
Amortized cost 87,171 - - 35,853 123,024
At 31 December 265,088 50,213 191,696 69,367 576,364
38
a2. Credit risk analysis
The tables below provide an analysis of the Bank’s internal expected credit loss rating scale from 1 (lowest
risk) to 15 (highest risk) and how it corresponds to the external ratings of Moody’s credit rating service.
Risk Internal risk External Grade of

rating rating category rating equivalent investment
1 Excellent Aaa Investment
1 Very strong Aa1 – Aa3 Investment
2 Strong A1 – A3 Investment
3,4,5 Good Baa1 – Baa3 Investment
6,7,8 Fair Ba1 – Ba3 Investment
9,10,11 Weak B1 – B3 Investment
12,13,14 Special attention Caa1 –Caa3 Classified
15 Expected loss Ca – C Classified
a3. Credit risk in loans portfolio
The table provides overview of the exposure amount and allowance for credit losses by financial asset
class broken down into stages as per IFRS 9 requirements, including movements of credit-impaired.
Internally, loans that are within the 12-month ECL are categorized as standard.
Credit risk for 2020 is analyzed as follows:
Presented in EUR (000)
ECL allowance
Lifetime Lifetime Lifetime Lifetime
ECL not ECL ECL not ECL
Internal risk 12-month credit credit 12-month credit credit
rating category ECL impaired impaired Total ECL impaired impaired Total
At 1 January 2020 1,484,999 272,290 50,898 1,808,187 2,891 5,986 34,437 43,314
Excellent - - - - - - - -
Very strong - - - - - - - -
Strong - - - - - - - -
Good 4,906 - - 4,906 1 - - 1
Fair 608,957 - - 608,957 1,251 - - 1,251
Weak 1,106,609 140,832 - 1,247,441 14,247 1,215 - 15,462
Special attention - 90,700 50,726 141,426 - 1,840 14,585 16,425
Expected loss - - 27,666 27,666 - - 22,798 22,798
At 31 December 2020 1,720,472 231,532 78,392 2,030,396 15,499 3,055 37,383 55,937
Credit risk for 2019 is analyzed as follows:
Presented in EUR (000)
ECL allowance
Lifetime Lifetime Lifetime Lifetime
ECL not ECL ECL not ECL
Internal risk 12-month credit credit 12-month credit credit
rating category ECL impaired impaired Total ECL impaired impaired Total
At 1 January 2019 1,050,830 225,851 41,737 1,318,418 3,520 4,274 26,981 34,775
Excellent - - - - - - - -
Very strong - - - - - - - -
Strong - - - - - - - -
Good 6,751 - - 6,751 1 - - 1
Fair 645,612 - - 645,612 680 - - 680
Weak 807,563 214,986 - 1,022,549 2,118 4,618 - 6,736
Special attention 25,073 57,304 50,898 133,275 92 1,368 34,437 35,897
At 31 December 2019 1,484,999 272,290 50,898 1,808,187 2,891 5,986 34,437 43,314
39
a4. Non-performing loans (NPL)
For the Bank an asset is classified as non-performing/impaired when the borrower is past due on payment
for more than 90 days, or when Risk Management Department considers that the counterparty is unlikely
to pay its credit obligations in full to the Bank. Normally, an NPL has uncertain indication of a recovery or
a restructuring plan and is fully provided with an impairment charge less any realizable collateral, which is
in the final stage to enforcing legal action. There were no write-offs during the year (2019: nil).
40
a5. Credit risk by country and sector
The Bank uses international best practices for lending activities in order to diversify risk by country and by
sector, while also preserving the needs of the Bank’s Member States in accordance with the Bank’s
mandate to promote economic development in the Black Sea Region.
The concentration of credit risk in lending portfolios is presented below, also including the undrawn
amounts. The Bank is generally well diversified by country and by sector.
At At
2020 2019
Outstanding Undrawn Outstanding Undrawn
Presented in EUR (000) balance commitments balance commitments
Concentration by instrument
Loans 2,042,921 245,143 1,820,941 335,959

Equity investments 26,310 6,962 30,386 7,905
Guarantees - 21,926 - 9,632
At end of year 2,069,231 274,031 1,851,327 353,496
Concentration by country
Albania 34,624 27 40,136 67

Armenia 91,269 98 92,731 387
Azerbaijan 105,366 12 121,519 387
Bulgaria 156,921 124,254 116,447 32,386
Georgia 100,979 11,803 116,119 28,712
Greece 380,255 8,788 386,898 12,503
Moldova 36,662 4,464 38,022 18,555
Romania 121,246 729 136,841 684
Russia 322,708 52,107 217,662 56,367
Turkey 478,820 49,748 420,399 134,229
Ukraine 240,381 22,001 164,553 69,219
At end of year 2,069,231 274,031 1,851,327 353,496
Concentration by sector
Consumer discretionary 77,272 10,000 59,671 41,214

Consumer staples 115,264 28,039 89,200 28,856
Energy 194,763 - 228,050 -
Financial institutions 566,994 9,678 612,049 38,743
Health care 97,734 19,014 91,060 26,138
Industrials 363,011 144,397 269,758 102,000
Information technology 4,056 - 4,129 -
Materials 240,177 12,224 123,231 55,919
Real estate 44,670 25,954 3,480 32,000
Telecom services - - - -
Utilities 365,290 24,725 370,699 28,626
At end of year 2,069,231 274,031 1,851,327 353,496
Incurred by
Sovereign 354,973 20,464 354,242 26,688

Non-sovereign 1,714,258 253,567 1,497,085 326,808
At end of year 2,069,231 274,031 1,851,327 353,496
41
The Bank is restricted to operating in its 11 Member States and individual country limits are set as a
maximum at 30% of planned commitments. This limit is calculated on the basis of the BoD approved
operations, minus repayments and cancellations. Individual operations are further constrained by the
Single Obligor Limit and by monitoring of Sectoral Exposure.
a6. Collateral and credit enhancements
The Bank mitigates credit risk by holding collateral and other credit enhancements against exposure to
customers and counterparties where it believes such security is necessary. The Bank defines security as
mechanisms, procedures and assets negotiated in transactions that are meant to protect it against loss in
case of non-performance. Security includes, but is not limited to, material assets, financial instruments,
guarantees, covenants and comfort letters.
• Loans and advances. The BoD approved guidelines for taking security under lending operations,
set the levels and types of collateral and other credit enhancements recommended for a given risk
profile.
The main types of collateral that may be obtained by the Bank are: mortgages on properties and
equipment, pledges of equity shares and investment instruments, assignment of rights on certain
contracts, cash or blocked deposits and other third party guarantees. If necessary, the Bank
reassesses the value of collateral in order to determine if additional collateral is needed to be
provided by the borrower. At 31 December 2020 the secured portfolio was 53.9% (2019: 57.2%)
of the outstanding loans balance.
• Other financial instruments. Collateral held as security for financial assets other than loans and
advances is determined by the nature of the instrument. Bonds and euro commercial paper held
by the Bank as investment securities are generally unsecured. The Bank may hold cash or
government securities as collateral against its derivative contract counterparties. At 31 December
2020 the Bank had pledged as collateral for derivative transactions a net amount of EUR 3,320
thousand (2019: EUR 1,350 thousand).
• For loans that are credit-impaired at the reporting date the Bank has collateral held as security, an
amount of EUR 38,864 thousand to mitigate credit risk. The types of collateral with approximate
values are real estate EUR 21,782 thousand, machinery and equipment EUR 6,175 thousand, and
pledged shares EUR 10,907 thousand.
b) Liquidity risk
Liquidity risk arises in the general funding of the Bank’s financing and investment activities and in the
management of positions. It concerns the ability of the Bank to fulfill its financial obligations as they become
due and is a measure of the extent to which the Bank may require funds to meet those obligations. It
involves both the risk of unexpected increases in the cost of funding the portfolio of assets at appropriate
maturities and rates and the risk of being unable to liquidate a position in a timely manner on reasonable
terms.
The Bank’s liquidity policy aims to balance the term and currency structure of the Bank’s assets and
liabilities. Liquidity management is concentrated on the timing of cash in-flows and out-flows, as well as
the adequacy of available cash and liquid securities. The Bank maintains liquid assets at prudential levels
to ensure that cash can quickly be made available to honor all its obligations, even under adverse
conditions and that the Bank has access to the funds necessary to satisfy customer needs, maturing
liabilities and its own working capital requirements. For this, the Bank estimates all expected cash flows
from assets and liabilities.
The Bank takes into consideration, to the extent feasible, the guidance documents issued by the Basel
Committee on Banking Supervision. The Bank sets limits to control its liquidity risk exposure and
vulnerabilities and regularly reviews such limits. The limit framework includes also measures ensuring that
in a period of market stress, available liquidity exceeds liquidity needs so that the Bank can continue to
operate.
42
The Bank’s commitment to maintaining a strong liquidity position is established in policies approved by the
BoD. The liquidity policy requires that the Bank maintain its liquidity position at a minimum of 50% of the
following 12 months’ net cash requirement, including committed undisbursed project and trade finance
loans.
The Bank’s liquidity position is monitored regularly, and the ALCO is primarily responsible for the
management of liquidity risk and the liquidity profile of the Bank. The Bank’s liquid assets are maintained
in short-term and negotiable securities that primarily are: (i) cash and bank balances (ii) short term deposits
with investment grade rated counterparties (iii) Euro-denominated commercial paper issued by investment
grade parties and (iv) investment grade bonds.
The table below presents the maturity profile of the undiscounted cash flows for financial liabilities placed
based on the remaining period from the financial position date to the contractual maturity date. It indicates
the earliest maturity dates that the Bank’s counterparties have the ability to demand repayment.
The figures represent undiscounted cash flows, and include estimated interest amounts, and therefore do
not match to the statement of financial position.
Contractual maturities for financial liabilities at 31 December 2020 and 31 December 2019 were:
From 1 From 3 From 1

Up to 1 month to 3 months to year to Over 5
Presented in EUR (000) month months 1 year 5 years years Total
Borrowings 18,223 60,944 555,212 1,167,718 229,256 2,031,353

Other and lease liabilities - 1,513 10,229 - - 11,742
Financial Liabilities at 31 December 2020 18,223 62,457 565,441 1,167,718 229,256 2,043,095
Borrowings 6,603 51,095 136,427 1,421,627 19,769 1,635,521

Other and lease liabilities - 2,133 7,536 - - 9,669
Financial Liabilities at 31 December 2019 6,603 53,228 143,963 1,421,627 19,769 1,645,190
For the Bank’s financial assets, the majority mature from one year and over taking into consideration the
latest possible repayment date.
c) Market Risk
Market risk is the risk that changes in foreign exchange rates, interest rates or market prices of financial
instruments may result in losses to the Bank. Market risk arises on such instruments that are valued at
current market prices (mark to market basis) or those valued at cost plus any accrued interest (accruals
basis).
The Bank funds its operations by using the Bank’s own share capital and by borrowing on the international
capital markets. The Bank aims to match, wherever possible, the currencies, tenors and interest rate
characteristics of its borrowings with those of its lending portfolios. When necessary, the Bank uses
derivative instruments to reduce its exposure to exchange rate and interest rate risks.
The Board has approved risk management policies and limits within which exposure to market risk is
monitored, measured and controlled. The ALCO monitors and manages these risks while the asset and
liability function within the Department of Treasury has primary responsibility for ensuring compliance with
these policies and limits.
c1. Foreign exchange risk
The Bank’s risk management policies seek to minimize currency exposures or any unanticipated changes,
favorable or unfavorable, in foreign exchange rates that could affect the income statement, by requiring
net liabilities in any one currency to be matched closely with net assets in the same currency. The Bank
will not take discretionary currency positions. This is achieved primarily by holding or lending the proceeds
of the Bank’s borrowings in the currencies in which they were borrowed.
43
The Bank regularly monitors its assets and liabilities in order to ensure the Bank takes no significant foreign
exchange risks and, after swap activities, adjusts the net asset currency composition to the Bank’s
functional currency to maintain a matched foreign exchange position. As a matter of policy, the Bank aims
to keep foreign exchange exposure as close to zero as possible, with exceptions to this practice requiring
approval from the ALCO. For local currency transactions the Bank matches the operation’s currency with
borrowings in the same currency, as such there is no material exposure. The tables below provide a
currency breakdown of the Bank’s assets and liabilities, showing that the effect of any currency fluctuations
on the net exposure is minimal.
At 31 December 2020 United

States Swiss
Presented in EUR (000) Euro dollar franc Other Total
Assets
Cash and due from banks 6,507 26,785 - 1,036 34,328
Debt investment securities 485,640 202,321 - - 687,961
Derivatives financial instruments 26,701 - - - 26,701
Loans 1,275,916 562,747 - 204,258 2,042,921
Deferred income (9,336) (3,988) - (489) (13,813)
Impairment losses on loans (48,495) (3,083) - (4,359) (55,937)
Equity investments 10,851 15,374 - 85 26,310
Accrued interest receivable 7,596 9,580 16 6,320 23,512
Other assets 6,372 2,308 535 275 9,490
Total 1,787,992 812,044 551 207,126 2,807,713
Liabilities
Borrowings 342,087 1,042,201 185,697 331,729 1,901,714
Margin accounts 22,920 - - - 22,920
Derivative financial instruments 28,935 - - - 28,935
Other and lease liabilities 11,742 - - - 11,742
Total 405,684 1,042,201 185,697 331,729 1,965,311
Currency balance at 31 December 2020 1,382,308 (230,157) (185,146) (124,603) 842,402
At 31 December 2019 United

States Swiss
Presented in EUR (000) Euro dollar franc Other Total
Assets
Cash and due from banks 72,598 7,776 - 897 81,271
Deposits in margin accounts 5,900 - - 5,900
Debt investment securities 148,512 271,314 - - 419,826
Derivatives financial instruments 3,128 - - - 3,128
Loans 1,069,985 590,485 - 160,471 1,820,941
Deferred income (2,541) (4,854) - (775) (8,170)
Impairment losses on loans (36,476) (2,417) - (4,421) (43,314)
Equity investments 12,463 17,691 - 232 30,386
Accrued interest receivable 11,994 10,008 - 2,332 24,334
Other assets 7,515 2,957 156 891 11,519
Total 1,293,078 892,960 156 159,627 2,345,821
Liabilities
Borrowings 97,420 1,036,935 184,410 178,042 1,496,807
Margin accounts 4,550 - - - 4,550
Derivative financial instruments 6,552 - - - 6,552
Other and lease liabilities 9,669 - - - 9,669
Total 118,191 1,036,935 184,410 178,042 1,517,578
Currency balance at 31 December 2019 1,174,887 (143,975) (184,254) (18,415) 828,243
44
c2. Interest rate risk
Interest rate risk is the risk that the value of a financial instrument will fluctuate, favorably or unfavorably,
due to changes in market interest rates. The length of time for which the rate of interest is determined on
a financial instrument indicates to what extent it is exposed to that interest rate risk.
The Bank’s interest rate risk management activities aim to enhance profitability, by limiting the effect on
asset values of adverse interest rate movements in order to increase net interest income by managing
interest rate exposure. The majority of the Bank’s loan portfolio is variable interest rate and the Bank has
a policy aimed at minimizing interest rate mismatches between its assets and liabilities that seeks to ensure
that the interest rate payment periods for its liabilities are matched as closely as possible to interest rate
payment periods for the Bank’s assets. As a matter of policy, the Bank does not take discretionary interest
rate positions.
The tables below provide information of the Bank’s interest rate risk exposure on non-trading financial
assets and liabilities. The Bank’s assets and liabilities are included at carrying amount and categorized
either on the contractual maturity date of the financial instruments or, in the case of instruments that re-
price to a market rate of interest before maturity, the next re-pricing date as at the financial position date.
Interest bearing
At 31 December 2020 From 1 From 3 From 1 Non-
Up to 1 month to 3 months to year to interest
Presented in EUR (000) month months 1 year 5 years bearing Total
Assets
Cash and due from banks 34,326 - - - 2 34,328
Deposits in margin accounts - - - - 26,240 26,240
Debt investment securities 98,267 151,519 220,532 217,643 - 687,961
Loans 421,284 338,931 675,357 607,349 - 2,042,921
Equity investments - - - - 26,310 26,310
Accrued interest receivable - - - - 23,512 23,512
Other assets - - - - 9,490 9,490
Total 553,877 490,450 895,889 824,992 85,554 2,850,762
Liabilities
Borrowings 32,842 126,128 641,012 1,092,348 9,384 1,901,714
Margin accounts - - - - 22,920 22,920
Other and lease liabilities - - - - 11,742 11,742
Total 32,842 126,128 641,012 1,092,348 44,046 1,936,376
Net financial assets (liabilities) 521,035 364,322 254,877 (267,356) 41,508 914,386
Derivative financial instruments 60,176 (163,956) (455,558) 559,338 (2,234) (2,234)

Interest rate risk at 31 December 2020 581,211 200,366 (200,681) 291,982 39,274 912,152
45
Interest bearing
At 31 December 2019 From 1 From 3 From 1 Non-
Up to 1 month to 3 months to year to interest
Presented in EUR (000) month months 1 year 5 years bearing Total
Assets
Cash and due from banks 81,267 - - - 4 81,271
Deposits in margin accounts - - - - 5,900 5,900
Debt investment securities 153,278 55,000 29,085 182,463 - 419,826
Loans 274,438 412,265 648,712 485,526 - 1,820,941
Equity investments - - - - 30,386 30,386
Accrued interest receivable - - - - 24,334 24,334
Other assets - - - - 11,519 11,519
Total 508,983 467,265 677,797 667,989 72,143 2,394,177
Liabilities
Borrowings 189,828 294,970 153,646 846,711 11,652 1,496,807
Margin accounts - - - - 4,550 4,550
Other and lease liabilities - - - - 9,669 9,669
Total 189,828 294,970 153,646 846,711 25,871 1,511,026
Net financial assets (liabilities) 319,155 172,295 524,151 (178,722) 46,272 883,151
Derivatives financial instruments (3,854) (129,074) (652,087) 785,015 (3,424) (3,424)

Interest rate risk at 31 December 2019 315,301 43,221 (127,936) 606,293 42,848 879,727
c3. Sensitivity analysis
Currency risk sensitivity
The Bank is marginally sensitive to exchange rate fluctuations of the US dollar and the Euro. The
Bank’s paid-in capital is held in Euro and the Bank’s loan portfolio is typically denominated as 60%
Euro, 30% US dollar and 10% other local currencies. In addition, the Bank’s administrative
expenses are denominated in Euro, and the Bank’s income is typically denominated as 60% Euro,
30% US dollar and 10% other local currency. The Bank has addressed this sensitivity to currency
risk by increasing its percentage of loans denominated in Euro, and therefore increasing its Euro
denominated income.
Interest rate sensitivity
The Bank’s interest rate sensitivity analysis comprises two elements. Firstly, there is the differential
between the interest rate the Bank earns on its assets and the cost of borrowing to fund these
assets. For this element the Bank does, as closely as possible, match interest rate periods, thus
minimizing or even eliminating sensitivity. Secondly, there is the absolute rate earned on assets
that are funded by the Bank’s member’s equity resources. The majority of the Bank’s member’s
equity resources are currently invested in the Bank’s loan portfolio at floating rates; therefore,
subjecting earnings on member’s equity resources to a minor degree of fluctuation.
The table below details the re-pricing gap by currency. A parallel upward or downward shift in the EUR and
USD curves of 50 basis points would have generated the maximum loss or gain respectively.
At At
Euro 1,386,000 1,124,000
United States dollar (43,000) 128,000
Total re-pricing gap 1,343,000 1,252,000
Shift of 50 basis points in the EUR curve 6,716 6,259
46
c4. Equity price risk
The Bank has a small equity investments portfolio and as such does not have significant market risk
exposure concerning foreign exchange or equity price risk on this portfolio. At 31 December 2020 the
Bank’s equity investments are classified at FVTOCI, except for one, and are primarily unlisted.
The Bank takes a long-term approach of its equity investments and has no intention of exiting from any,
therefore accepts the short-term volatilities in value from exchange rate and price risk. The Bank expects
the effect on net income to be of little to no impact.
Additional sensitivity information for the Bank’s equity investments has been included under ‘Fair value
hierarchy’ later in this section and in the Note “Equity investments”.
Operational Risk
Like all financial institutions, the Bank is exposed to operational risks arising from its systems and
processes. Operational risks include the risks of losses resulting from inadequate or failed internal
processes, people, systems, legal, and from external events which could have a negative financial or
adverse reputational impact. The Bank has a low tolerance for losses arising from the operational risks the
Bank is exposed to.
The Office of Compliance and Operational Risk Management (CORMO) has oversight on operational risk
activities across the Bank. The Bank’s operational risk framework is a network of processes, procedures,
reports and responsibilities that are used to identify, manage and monitor the operational risks of the Bank.
These include committees, working groups, day-to-day practices such as the collection and analysis of key
risks, risk of loss incidents and both strategic and work cultural practices. This provides a structured
approach to managing operational risk and seeks to apply consistent standards and techniques for
evaluating risks across the Bank. The Bank has a comprehensive set of policies and procedures that
indicate how operational risks should be managed throughout the Bank.
The sources of operational risk emerge in various ways, including business interruptions, inappropriate
behavior of employees (including fraud), failure to comply with applicable laws and regulations or failure of
vendors to perform in accordance with their contractual arrangements. These events could result in
financial losses, as well as reputational damages to the Bank. The Bank’s operational risk management
focuses on proactive measures to mitigate the operational risk.
Where any incident may occur the Bank systematically collects, analyses and reports data on that incident
to ensure the Bank understands the reasons it occurred and how controls can be improved to reduce or
better avoid the risk of any future incident.
The Bank’s risk and control assessments of the key operational risks in each business area are
comprehensive and primarily bottom-up. They are based on Bank-wide operational risk definitions, that
classify risks under a standardize approach, cover the inherent risks of each business area and control
function, provide an evaluation of the effectiveness of the controls in place to mitigate these risks,
determine the residual risk ratings and require a decision to either accept or remediate any remaining risk.
Concerning cyber crime, which is risk of loss or damage to the Bank’s business areas and customers as a
result of actions committed or facilitated through the use of networked information systems, the Bank’s
Department of Information Technologies (DIT) and information security policies and procedures ensure
that all servers and computers have up to date antivirus software. Backups are made regularly and regular
access control checks, system penetration and vulnerability tests along with disaster recovery tests are
performed.
The Bank’s anti-cyber attack controls are checked and aligned with industry best practice by the DIT.
The Bank regularly produces management information reports covering the key inputs and outputs of
operational risk. These reports are used to monitor outcomes against agreed targets and tolerance levels.
The Bank utilizes the Bank’s IT systems and other information tools to ensure operational risks are
identified and managed properly.
47
Overall, the Bank is committed to follow the best practices and market standards in the area of
accountability, transparency and business ethics. Due diligence on customers and counterparties take into
consideration the Anti-Fraud Corruption and Monetary Laundering Policy and Know-Your Customer
Procedures. The Bank also has a contingency and business continuity plans, and a disaster recovery off-
site which aims to ensure the continuity of its operations and protect the interests of all the key stakeholders
of the Bank, namely, the member countries, bondholders and other creditors as well as employees and
their families, in the event of any disturbance in office locations.
Fair Value Hierarchy
For the above financial instruments measured at fair value, the Bank uses the following hierarchy for
determining and disclosing the fair value of financial instruments by valuation technique:
• Level 1: Quoted market prices in active markets for identical assets or liabilities;
• Level 2: Other techniques for which all inputs that have a significant effect on the recorded fair
value are observable, either directly or indirectly; and
• Level 3: Techniques which use inputs that have a significant effect on the recorded fair value
that are not based on observable market data.
The tables below identify the Bank’s financial instruments measured at fair value.
Carrying
Presented in EUR (000) Level 1 Level 2 Level 3 amount
Derivative financial instruments – assets - 26,701 - 26,701
Fair value through profit or loss:
Loans - - 12,525 12,525
Equity investments - - 791 791
Fair value through other comprehensive income:
Debt investment securities 687,961 - - 687,961
Equity investments - 25,519 25,519
Derivative financial instruments – liabilities - (28,935) - (28,935)
At 31 December 2020 687,961 (2,234) 38,835 724,562
There have been no transfers between Level 1 and Level 2 during the year. For Level 1 market prices are
used whereas for Level 2 the valuation techniques used are broker quotes and observable market data.
For Level 3 the valuation techniques used are the net asset value (NAV), and equity calculations based on
EBITDA and market data.
Carrying
Presented in EUR (000) Level 1 Level 2 Level 3 amount
Derivative financial instruments – assets - 3,128 - 3,128
Fair value through profit or loss:
Loans - - 12,754 12,754
Equity investments - - 798 798
Fair value through other comprehensive income:
Debt investment securities 419,826 - - 419,826
Equity investments - 29,588 29,588
Derivative financial instruments – liabilities - (6,552) - (6,552)
At 31 December 2019 419,826 (3,424) 43,140 459,542
48
Fair Value Measurement in Level 3
The table provides a reconciliation of the fair values of the Bank’s Level 3 for loan financial assets of the
fair value hierarchy.
At At
At 1 January 12,754 12,277
Total gains/(losses) recognized in the income statement (229) 477
At end of year 12,525 12,754
The table provides a reconciliation of the fair values of the Bank’s Level 3 equity investments financial
assets of the fair value hierarchy.
At At
At 1 January 30,386 27,655
Total gains/(losses) recognized in the income statement (7) (217)
Total gains/(losses) recognized in other comprehensive income (3,577) 4,219
Disbursements 732 825
Repayments (1,231) (2,096)
Foreign exchange adjustments 7 -
At end of year 26,310 30,386
Sensitivity Analysis for Level 3
The table below illustrates the valuation techniques used in the determination of fair values for financial
instruments within Level 3 of the measurement hierarchy, and on an estimated 5% increase or decrease
in net asset value. The Bank considers that market participants would use the same inputs in pricing the
financial assets. Management considers that changing the unobservable inputs described below to reflect
other reasonably possible alternative assumptions would not result in a significant change in the estimated
fair value.
Carrying Favorable Unfavorable

Presented in EUR (000) Valuation techniques amount change change
Loans Discounted cash flows models 12,525 626 (626)
Equity investments Net asset value and EBITDA multiplies 26,310 1,316 (1,316)
At 31 December 2020 38,835 1,942 (1,942)
Carrying Favorable Unfavorable

Presented in EUR (000) Valuation techniques amount change change
Loans Discounted cash flows models 12,754 638 (638)
Equity investments Net asset value and EBITDA multiplies 30,386 1,519 (1,519)
At 31 December 2019 43,140 2,157 (2,157)
Loans at fair value through profit or loss mainly comprise convertible loans or loans with an element of
performance-based return. The inputs into the models could include comparable pricing, interest rates,
discounts rates, average cost of capital, probability of default and loss given default.
Equity investments comprises the Bank’s equity funds and equity participations. The main valuation models
used to determine the fair value of these financial assets are NAV and EBITDA models.
Although the Bank believes that its estimates of fair value are appropriate, the use of different
methodologies or assumptions could lead to different fair value results.
49
Financial Instruments not Measured at Fair Value
The table below classifies the Bank’s financial instruments that were not carried at fair value into three
levels reflecting the relative reliability of the measurement bases, with level 1 as the most reliable.
At
31 December
2020
Carrying Fair
Presented in EUR (000) Level 1 Level 2 Level 3 Amount value
Assets
Cash and due from banks 34,328 - - 34,328 34,328
Deposits in margin accounts 26,240 - - 26,240 26,240
Loans at amortized cost 267,588 - 1,762,808 2,030,396 2,040,565
Accrued interest receivable - - 23,512 23,512 23,512
Other assets - - 9,490 9,490 9,490
Total financial assets 328,156 - 1,795,810 2,123,966 2,134,135
Liabilities
Borrowings 315,992 1,585,722 - 1,901,714 1,925,648
Margin accounts 22,920 - - 22,920 22,920
Other and lease liabilities - 11,742 - 11,742 11,742
Total financial liabilities 338,912 1,597,464 - 1,936,376 1,960,310
At
31 December
2019
Carrying Fair
Presented in EUR (000) Level 1 Level 2 Level 3 amount Value
Assets
Cash and due from banks 81,271 - - 81,271 81,271
Deposits in margin accounts 5,900 - 5,900 5,900
Loans at amortized cost 175,367 - 1,632,820 1,808,187 1,821,760
Accrued interest receivable - - 24,334 24,334 24,334
Other assets - - 11,519 11,519 11,519
Total financial assets 262,538 - 1,668,673 1,931,211 1,944,784
Liabilities
Borrowings 246,437 1,250,370 - 1,496,807 1,518,814
Margin accounts 4,550 - - 4,550 4,550
Other and lease liabilities - 9,669 - 9,669 9,669
Total financial liabilities 250,987 1,260,039 - 1,511,026 1,533,033
Level 1 classifies financial instruments whose values are based on quoted prices for the same instrument
in active markets. Level 2 classifies financial instruments that can trade in markets, which are not
considered to be active, but are valued based or alternatively supported by observable inputs. Level 3
classifies financial instruments that have significant unobservable inputs, and as observable prices are not
available the Bank will use valuation techniques to derive the fair value.
Capital Management
At the inception of the Bank, initial authorized share capital was SDR 1 billion, which was fully subscribed
by the Member States. In December 2007 the BoG approved an increase of the Bank’s authorized share
capital to SDR 3 billion and authorized the offering of SDR 1 billion to the existing Member States for
subscription, with the objective of increasing subscribed capital to a total of SDR 2 billion. The increase
allows the Bank to implement its operational strategy to a substantial degree. The Bank does not have any
other classes of capital.
In October 2008 the above new shares in the amount of SDR 1 billion that were offered for subscription to
the Bank’s Member States were fully subscribed and allocated. Accordingly, the Bank’s paid-in share
capital was doubled from SDR 300 million to SDR 600 million. The remaining SDR 1 billion of authorized
share capital has not yet been allocated.
50
Pursuant to Resolution 131 of the BoG a unanimously adopted the first amendment to the Establishing
Agreement, which became effective on 21 June 2013. As of this effective date, and as per Resolution 131
of the BoG, the unit of account of the Bank became the EUR and all of the Bank’s authorized share capital
was redenominated from SDR to EUR. The conversion rate applied was SDR to EUR fixed at 1:1.15.
The share capital usage of the Bank is guided by statutory and financial policy parameters. Article 15 of
the Establishing Agreement limits the total amount of outstanding loans, equity investments and
guarantees made for ordinary operations to 150% of the Bank’s unimpaired subscribed capital, reserves
and surpluses, establishing a 1.5:1 institutional gearing ratio. Additionally, disbursed equity investments
shall not at any time exceed an amount corresponding to the Bank’s total unimpaired paid-in capital,
surpluses and general reserve.
The Bank determines required share capital as the potential losses the Bank may incur based on
probabilities consistent with the Bank’s credit rating. The main risk categories assessed under the share
capital adequacy framework are credit risk, market risk and operational risk, and such total risks are
managed within the available share capital base that excludes callable share capital, while maintaining a
prudent cushion. A main objective of this framework is to manage the Bank’s share capital by providing a
consistent measurement of capital headroom over time. The Bank has no expectation for callable share
capital to be called, and will prevent this need and use only available risk share capital as reserves, surplus
and paid-in.
At the 36th meeting of the BoD in 2008, the operational gearing ratio was set at 100% of the Bank’s
unimpaired paid-up capital, reserves and surpluses, and the usable portion of the callable capital. This limit
on the total amount of operations which includes all callable capital is approximately EUR 2.5 billion.
Overall, the Bank preserves an actively managed capital stock to prudently cover risks in its activities. As
a multilateral financial institution, the Bank is not subject to regulatory capital requirements. However, the
Bank uses standards proposed by the Basel II Capital Accord as a benchmark for its risk management and
capital framework. Pursuant to Article 5 of the Establishing Agreement, the BoG shall at intervals of not
more than five years review the capital stock of the Bank. In substance, the primary objective of the Bank’s
capital management is to ensure adequate share capital is available to support the Bank’s operations.
51
6. OPERATING SEGMENTS
The Bank is a multilateral financial institution, which in accordance with the Establishing Agreement, is
dedicated to accelerating development and promoting co-operation among the Bank’s shareholder
countries. The Bank operates in a specific geographical area and the primary reporting format for business
segments are the Lending and Treasury operations. Lending activities represent investments in projects
such as loans, equity investments and guarantees. Treasury activities include raising debt finance,
investing surplus liquidity, and managing the Bank’s foreign exchange, liquidity and interest rate risks.
Information on the financial performance of lending and treasury activities is prepared regularly and
provided to the President, the Bank’s chief operating decision-maker.
2020 2019
Presented in EUR (000) Lending Treasury Total Lending Treasury Total
Income statement
Interest income 88,338 9,518 97,856 82,707 11,262 93,969

Net fees and commissions 2,040 - 2,040 947 20 967
Other income (expense) 444 (1,752) (1,308) 272 119 391
Total segment revenues 90,822 7,766 98,588 83,926 11,401 95,327
Interest expense (60,442) (606) (61,048) (52,762) (512) (53,274)
Net interest income (expense) on derivatives - 7,427 7,427 - (4,113) (4,113)
Gains (losses) on other financial instruments 7,174 (2,049) 5,125 260 - 260
Foreign exchange - 78 78 - (1,067) (1,067)
Personnel and administrative expenses (18,697) (1,561) (20,258) (19,474) (1,471) (20,945)
Depreciation and amortization (515) (10) (525) (563) (9) (572)
Segment income before impairment 18,342 11,045 29,387 11,387 4,229 15,616
Less: impairment / fair value (losses) (12,894) (2,278) (15,172) (1,841) (111) (1,952)
Net income for the year 5,448 8,767 14,215 9,546 4,118 13,664
31 December 2020 31 December 2019
Presented in EUR (000) Lending Treasury Total Lending Treasury Total
Financial position
Segment assets 2,033,789 775,230 2,809,019 1,837,862 510,125 2,347,987

At end of year 2,809,019 2,347,987
Segment liabilities 1,913,456 51,855 1,965,311 1,506,476 11,102 1,517,578

Members’ equity - - 843,708 - - 830,409
At end of year 2,809,019 2,347,987
52
Segment Revenues – Geographic
The Bank’s revenues arise from the following areas:
Year to Year to
Albania, Bulgaria and Greece 17,522 17,348
Armenia, Azerbaijan, Georgia and Turkey 41,696 37,058
Moldova Romania, Russian Federation and Ukraine 31,604 29,520
Treasury 7,766 11,401
Total segment revenues 98,588 95,327
7. INTEREST AND SIMILAR INCOME
Interest and similar income is analyzed as follows:
Year to Year to
From loans at amortized cost 87,826 82,195
From due from banks 95 41
From debt securities at FVTOCI 9,423 11,221
Total interest income for financial instruments not
measured at FVTPL 97,344 93,457
From loans at FVTPL 512 512

Interest and similar income 97,856 93,969
8. INTEREST AND SIMILAR EXPENSE
Interest and similar expense is analyzed as follows:
Year to Year to
From borrowed funds 7,191 7,770
From issued debt 53,251 44,992
From other charges 606 512
Interest and similar expense 61,048 53,274
9. NET INTEREST ON DERIVATIVES
Net interest on derivatives is analyzed as follows:
Year to Year to
Interest on derivatives receivable 51,223 35,900
Interest on derivatives payable (43,796) (40,013)
Net interest on derivatives 7,427 (4,113)
53
10. NET FEES AND COMMISSIONS
Net fees and commissions is analyzed as follows:
Year to Year to
Guarantee fees 579 356
Management fees 448 408
Appraisal fees 8 30
Administration fees 54 26
Participation fees 123 -
Surveillance fees 51 57
Prepayment / cancellation fees 718 20
Other fees 59 70
Net Fees and commissions 2,040 967
11. PERSONNEL AND ADMINISTRATIVE EXPENSES
Administrative expenses is analyzed as follows:
Year to Year to
Salaries and benefits 12,761 12,819
Staff retirement plans 3,336 2,939
Personnel expenses 16,097 15,758
Professional fees and related expenses 1,355 1,328

Utilities and maintenance 1,557 1,606
Other administrative 1,249 2,253
Administrative expenses 4,161 5,187
The average number of staff employed during the year was 114 (2019: 112). The number of staff at 31
December 2020 was 115 (2019: 113). Further analysis of the staff retirement plan is presented in the Note
“Employee benefits”.
12. IMPAIRMENT LOSSES ON LOANS
Loans that are measured at amortized cost are stated net of provisions for impairment, which includes also
their related provisions for impairment on undrawn commitments. A summary of the movements in
provisions for impairment is as follows:
Stage Stage Stage

Presented in EUR (000) 1 2 3 Total
At 31 December 2018 3,520 4,274 26,981 34,775
Charge/release for the year (629) 1,712 7,456 8,539
At 31 December 2019 2,891 5,986 34,437 43,314
Charge/release for the year 12,608 (2,931) 2,946 12,623
At 31 December 2020 15,499 3,055 37,383 55,937
54
At each reporting date, the Bank recognizes loss allowances based on either 12-month ECL or lifetime
ECL, depending on the state of the loan.
Total impairment losses on loans was EUR 55,937 thousand in 2020, an increase of EUR 12,623 thousand
compared to 2019. The increase was primarily driven by negative impacts from the Covid-19 pandemic.
Included in this amount is a post model adjustment of EUR 7,538 thousand which the Bank considered
necessary due to the Covid-19 pandemic affecting the Region of the Bank’s operations. The increase in
Expected Credit Loss (ECL) for Stage 1 is mainly attributed to the impact of the Covid-19 pandemic, driven
by the deteriorating macroeconomic scenarios used for some member countries. The increase amount in
Stage 3 is due to the deterioration of a few loans reducing their carrying amount.
Staging Criteria 12-month ECL (Stage 1)
As IFRS 9 does not distinguish between individually significant or not individually significant financial
instruments, the Bank measures potential credit losses for all non-impaired operations (Stage 1 and Stage
2) on an individual operation basis. Provisions for impairment in Stage 1 are therefore affected by the
specifics of any particular operation together with general market scenarios. They are meant to protect
against potential risks that are considered present, or within a 12-month horizon, and derived from
potentially adverse developments in operating conditions beyond the control of individual borrowers.
Staging Criteria Lifetime ECL (Stages 2 and 3)
When an operation deteriorates substantially in credit quality, it enters Stage 2 and an expected credit loss
calculation is performed on a Lifetime Expected Credit Loss (LECL) basis. Stage 2 operations are those
that have experienced an overall credit quality downgrade but are still performing. They are not considered
credit-impaired.
Stage 3 operations have objective evidence of impairment that immediately impacts the ECL.
Revolving Facilities and Undrawn Commitments
Revolving credit facilities have no fixed term and they can be cancelled at the discretion of the Bank at any
point in time. These facilities are subject to, at a minimum, an annual credit review. In this regard, the date
of the latest credit review is considered the relevant date to assess if there is any increase in credit risk, as
at that point in time. Following this, the Bank may amend the terms and conditions of the exposure.
The estimate of the ECLs on irrevocable loan commitments is consistent with its expectations of
drawdowns on that loan commitment. Therefore, the Bank considered (i) the expected portion of the loan
commitment that will be drawn down within 12 months of the reporting date when estimating 12-month
expected credit losses and (ii) the expected portion of the loan commitment that will be drawn down over
the expected life of the reporting date when estimating lifetime expected credit losses. At 31 December
2020 the amount of expected credit losses was EUR 983 thousand for loan commitments of EUR 245,143
thousand (2019: EUR 311 thousand for loan commitments of EUR 335,959 thousand).
55
13. DEBT INVESTMENT SECURITIES
Debt investment securities are analyzed as follows:
At At
Bonds 291,179 216,909
Commercial papers 396,782 202,917
Debt investment securities 687,961 419,826
14. DERIVATIVE FINANCIAL INSTRUMENTS
The table below shows the Bank’s outstanding derivative financial instruments. The first column shows the
sum of notional amounts, which is the amount of a derivative’s nominal value, and is the basis upon which
changes in the value are measured. The second column shows the market value of the notional amounts
and also the net valuation.
At
31 December
2020
Notional amount of Fair
Presented in EUR (000) derivative contracts value
Assets Liabilities
Interest rate swaps 801,225 1,625 (11,548)
Cross currency swaps 902,619 23,499 (16,397)
Forwards 83,433 1,577 (990)
Cap floors 160,000 - -
Derivative financial instruments 1,947,277 26,701 (28,935)
The above derivative financial instrument contracts with financial counterparties have been documented
under International Swaps and Derivative Association (ISDA) Master Agreements with Credit Support
Annexes (CSAs). Pursuant to such arrangements the Bank is eligible to offset assets and liabilities in the
event of a counterparty default occurrence.
56
15. LOANS
The Bank offers a range of loan facilities directed to investments for both project and trade financing, and
tailored to meet an individual operation’s requirements. Loans may be denominated in any convertible
currency, or a combination of convertible currencies in which the Bank is able to fund itself.
At At
Loans at amortized cost:
At 1 January 1,808,187 1,318,418
Disbursements 783,932 871,130
Less: repayments (482,661) (381,756)
Write-offs - -
Foreign exchange movements (79,062) 395
Outstanding disbursements 2,030,396 1,808,187
Less: deferred income (13,813) (8,170)
Less: impairment losses (55,937) (43,314)
Loans at fair value:

Outstanding disbursements 14,939 14,939
Fair value adjustment (2,414) (2,185)
Loans net of impairment 1,973,171 1,769,457
At 31 December 2020 the principal amount of outstanding disbursements was EUR 2,045,335 thousand
(2019: EUR 1,823,126 thousand).
For the year ended the amount of accrued interest receivable pertaining to loans was EUR 19,671
thousand (2019: 17,006 thousand).
The carrying amount of loans with respect to their related Stages and allowance for impairment is analyzed
as follows:
At At
Stage 1 1,720,472 1,484,999
Less: deferred income (13,813) (8,170)
Less: allowance for impairment (15,499) (2,891)
Carrying amount 1,691,160 1,473,938
Stage 2 231,532 272,290

Carrying amount 228,477 266,304
Stage 3 78,392 50,898

Carrying amount 41,009 16,461
Fair value through profit or loss 12,525 12,754

Carrying amount 1,973,171 1,769,457
Interest is generally based on Libor for USD loans and Euribor for EUR loans plus a margin. Margins are
dependent on the risk category of each loan and typically range from 1.5% to 8.0%. Further analysis of the
loan portfolio is presented in Note “Risk management”.
57
16. EQUITY INVESTMENTS
A primary focus of the Bank is to facilitate access to funding for those small and medium-size enterprises
with the potential for positive economic developmental impact. With this objective in mind, the Bank,
together with a number of other institutions has invested in the entities as detailed below.
At At
2020 2019
% of Fair Fair
Presented in EUR (000) Investment Cost Value Cost value
Balkan Accession Fund 9.09 - 791 - 798
At fair value through profit or loss - 791 - 798
SEAF Caucasus Growth Fund 21.39 5,074 4,954 5,423 4,270

Access Bank, Azerbaijan 0.06 722 85 792 232
A-Park Kaluga, Russia 19.99 1,714 940 1,714 785
Emerging Europe Accession Fund 10.14 2,194 5,685 2,204 5,524
Rusal 0.01 4 161 4 185
ADM Ceecat Recovery Fund 5.37 3,901 3,059 4,285 4,966
European Virgin Fund 21.05 6,253 10,258 7,673 13,236
Teamnet International 8.33 5,599 - 5,599 -
Natfood 37.98 - - - -
EOS Hellenic Renaissance Fund 2.53 1,055 377 498 390
At fair value through other comprehensive income 26,516 25,519 28,192 29,588
Equity investments at fair value 26,516 26,310 28,192 30,386
The valuation of such investments, which are unlisted, has been estimated using the most recent
management accounts or the latest audited accounts as of 31 December 2020, as Management considers
that these provide the best available estimate of the investments’ fair value. The techniques applied to
perform these valuations include equity calculations based on EBITDA and market data.
During the year the Bank had received dividend income of EUR 164 thousand from its investment in the
A-Park Kaluga Fund, and realized a net income of EUR 284 thousand from its investment in the Balkan
Accession Fund.
On disposal or exit of an equity investment for those at fair value through other comprehensive income,
the cumulative gain or loss is realized with a corresponding reversal of the unrealized gain or loss that was
recorded prior to the exit from that investment, and is not recycled to the income statement.
As of 31 December 2020 the Bank has a committed amount of EUR 6,962 thousand towards further
participation in the above entities. Further analysis of the equity investment portfolio is presented in the
Note “Risk management”.
As of 31 December 2020 the Bank has few equity investments where it holds slightly more than 20 per
cent of the investee share capital, but does not exert significant influence, hence the investments are not
accounted for as an investment in an associate under IAS 28.
58
17. OTHER ASSETS
Other assets is analyzed as follows:
At At
Advances and prepaid expenses 4,068 6,165
Other prepayments 187 187
Other financial assets 5,160 5,097
Guarantee deposits 75 70
Other assets 9,490 11,519
18. PROPERTY AND EQUIPMENT
Property and equipment is analyzed as follows:
Furniture Computers
Buildings and office and office
Presented in EUR (000) (leasehold) Vehicle accessories equipment Total
Cost
At 31 December 2018 876 106 593 1,805 3,380

Additions 6 44 33 213 296
Disposals - - (23) (243) (266)
At 31 December 2019 882 150 603 1,775 3,410
Additions 3 - 40 168 211
Disposals - - - - -
At 31 December 2020 885 150 643 1,943 3,621
Accumulated depreciation
At 31 December 2018 836 55 511 1,523 2,925

Charges 23 23 33 183 262
Disposals - - (23) (243) (266)
At 31 December 2019 859 78 521 1,463 2,921
Charges 15 30 40 186 271
Disposals - - - - -
At 31 December 2020 874 108 561 1,649 3,192
Net book value
At 31 December 2020 11 42 82 294 429

At 31 December 2019 23 72 82 312 489
At 31 December 2018 40 51 82 282 455
59
19. INTANGIBLE ASSETS
Intangible assets comprising computer software is analyzed as follows:
Presented in EUR (000) Total
Cost
At 31 December 2018 4,559

Additions 83
Additions 130
Accumulated amortization

Charges 314
Additions 254
Net book value
At 31 December 2020 298

60
20. BORROWINGS
Borrowing facilities and bond issues debt evidenced by certificates, arranged as at the financial position
date, are analyzed below. In addition to medium- or long-term borrowings and bond issuance, the Bank
utilizes short-term financing in the form of ECP issuance or borrowings from commercial banks for cash
management purposes.
At At
2020 2019
Amount Amount Amount Amount
Presented in EUR (000) used arranged Used arranged
Borrowed by
Short-term 111,120 111,120 83,675 83,675

Financial institutions 315,992 406,738 240,206 379,221
Evidenced by certificates 1,465,218 1,465,218 1,161,274 1,161,274
Accrued interest payable 9,384 - 11,652 -
Total 1,901,714 1,983,076 1,496,807 1,624,170
Denomination by
Euro 339,581 389,581 96,477 146,477

United States dollar 1,038,768 1,079,514 1,029,024 1,118,039
Swiss franc 185,223 185,223 184,366 184,366
Romanian lei 173,046 173,046 82,023 82,023
Azerbaijan manat 4,841 4,841 5,415 5,415
Georgian lari 67,109 67,109 84,125 84,125
Armenian dram - - 3,725 3,725
Czech koruna 34,296 34,296 - -
Hungarian forint 49,466 49,466 - -
Total 1,901,714 1,983,076 1,496,807 1,624,170
Maturity by
Short-term, within one year 579,700 579,700 124,727 124,737

Long-term, over one year 1,312,630 1,403,376 1,360,418 1,499,433
Total 1,901,714 1,983,076 1,496,807 1,624,170
The interest rate on borrowings falls within a range of Euribor or USD Libor of plus 0 to 485 basis points.
There is no collateral against the above borrowed funds.
During the year the Bank redeemed a part of an issued bond prior to maturity of approximately USD 92,353
thousand generating a net loss of EUR 2,049 thousand (2019: nil) that was recognized in the income
statement.
61
21. OTHER LIABILITIES
Other liabilities is analyzed as follows:
At At
Social insurance fund (EFKA) contributions 3 3
Pension plan obligation 10,229 7,536
Suppliers and other accrued expenses 1,068 1,012
Other 59 59
Other liabilities 11,359 8,610
22. LEASE LIABILITY
The Bank has entered into a lease contract only for its Headquarters premises, which includes renewal
options and periodic escalation clauses. There are no other commitments at end of year arising from non-
cancellable lease contract. On adoption of IFRS 16 the impact in the statement of financial position of the
recognition of right-of-use asset and corresponding lease liability, together with the movement for 2020, is
analyzed as follows:
Presented in EUR (000) Total

Lease liability due to initial application of IFRS 16 at 1 January 2019 1,931
Prepayment of rental (196)
Interest expense on the lease liability -
Lease payments recognized in administrative expenses (676)
Lease liability at 31 December 2019 1,059
Lease payments recognized in administrative expenses (676)
Lease liability at 31 December 2020 383
IFRS 16 indicates that at the commencement date, the lessee (the Bank) will discount the lease payment
using (a) the interest rate implicit in the lease or (b) the lessee’s incremental borrowing rate if the interest
rate implicit in the lease cannot be determined. The incremental borrowing rate is the rate of interest that
a lessee would have to pay to borrow the funds to obtain (i) an asset of a similar value to the underlying
asset (ii) over a similar term (iii) with similar security (iv) in a similar economic environment. As the Bank
has only one lease arrangement that is nearing maturity, Management concluded that any adjustment or
any subsequent interest does not have a material impact on the financial statements.
The Bank presents right-of-use assets separately as property and equipment, and the lease liability
separately within payables and accrued interest, in the statement of financial position. Consequently, the
Bank recognizes lease payments and interest, if any on the lease liability on a straight-line basis over the
period of the lease term, similarly to any benefits received or that are receivable, in the income statement.
When a lease is terminated before the lease period has expired, any payments required to be made to the
lessor, by way of penalty, are recognized as an expense in the period the termination takes place.
62
23. SHARE CAPITAL
From the Bank’s inception, and in accordance with Article 4 of the Establishing Agreement, the Bank
denominated its authorized share capital in the Special Drawing Right (SDR) as defined by the International
Monetary Fund (IMF). Resolution 131 of the BoG unanimously adopted the requisite amendments to
paragraph 1 of Article 4 and Articles 23 and 24 of the Establishing Agreement, to expressly include among
the exclusive powers of the BoG the change of the unit of account of the Bank, and the redenomination of
all capital stock of the Bank. These amendments to the Establishing Agreement became effective on 21
June 2013 (the ‘Effective Date’). In accordance with such Resolution 131 of the BoG as of the Effective
Date the unit of account of the Bank became the EUR and the authorized capital stock of the Bank was
redenominated into three billion four hundred and fifty million EUR (3,450,000,000), divided into three
million (3,000,000) shares having a par value of one thousand and one hundred and fifty EUR (1,150)
each, inclusive of all subscribed and unallocated shares. Accordingly, as of the Effective Date, all
outstanding share capital commitments of participating members in respect of their subscribed shares were
converted into EUR.
The authorized capital stock of the Bank may be increased at such time and under such terms as may
seem advisable.
The Bank’s capital stock is divided into paid-in shares (fully paid and payable in installments) and callable
shares. Payment for the paid-in shares subscribed to by members was made over a period of years in
accordance with Article 6 of the Establishing Agreement for the initial capital raising purpose of the Bank,
and as determined in advance by the Bank for capital increases (in the only capital increase of the Bank
so far, the structure of payments specified was similar to the one in Article 6). The same Article states that
payment of the amount subscribed to in respect of the callable shares is subject to call only as and when
required by the Bank to meet its obligations.
Under Article 37 of the Establishing Agreement any member may withdraw from the Bank by transmitting
a notice in writing to the Bank at its Headquarters. Withdrawal by a member shall become effective and its
membership shall cease on the date specified in its notice, but in no event less than six months after such
notice is received by the Bank. However, at any time before the withdrawal becomes finally effective, the
member may notify the Bank in writing of the cancellation of its notice of intention to withdraw. Under Article
39 of the Establishing Agreement after the date on which a member ceases membership, it shall remain
liable for its direct obligations to the Bank, and also remain responsible for its contingent liabilities to the
Bank, incurred as of that date. No member has ever withdrawn its membership, nor has any ever indicated
to the Bank it might do so. Were a member to withdraw from the Bank, at the time a member ceases
membership, the Bank shall arrange for the repurchase of such a member’s shares by the Bank as part of
the settlement of accounts with such a member, and be able to impose conditions and set dates pursuant
to the same Article 39 of the Establishing Agreement. Any amount due to the member for its shares shall
be withheld so long as the member, including its central bank or any of its agencies, has outstanding
obligations to the Bank, which may, at the option of the Bank, be applied to any such liability as it matures.
If losses are sustained by the Bank on any guarantees or loans which were outstanding on the date when
a member ceased membership and the amount of such losses exceeds the amount of the reserves
provided against losses on the date, the member concerned shall repay, upon demand, the amount by
which the repurchase price of its shares would have been reduced if the losses had been taken into account
when the repurchase price was determined.
Under Article 42 of the Establishing Agreement in the event of termination of the operations of the Bank,
the liability of members for the unpaid portion of the subscribed capital of the Bank shall continue until all
claims of creditors, including all contingent claims, have been discharged.
All participating members had fully subscribed to the initial authorized share capital in accordance with
Article 5 of the Establishing Agreement. Subsequently, at the Sixth Annual Meeting of the Board of
Governors held on 6 June 2004 three Member States, Armenia, Georgia and Moldova requested a 50%
reduction of their portion of subscribed capital, from 2% to 1% of the initial authorized capital and the BoG
approved their request. On 5 October 2008 the new shares pursuant to the capital increase of the Bank
were offered in the same structure as the initial authorized share capital, in the amount of EUR 1.15 billion,
and were fully subscribed by the Member States.
63
Furthermore, Azerbaijan also subscribed to the 3% of the initial authorized share capital that remained
unallocated, after the above mentioned participation reduction, while Romania subscribed both to their
allocation of new shares and to those that would have been allocated to Georgia had it chosen to participate
in the capital increase. This subscription process followed a decision taken by the BoG in December 2007
to triple the Bank’s authorized capital to EUR 3.45 billion and to double the subscribed capital to EUR 2.3
billion, while leaving authorized capital of EUR 1.15 billion unallocated. On October 2011 the BoG approved
the request from Moldova for a 50% reduction of its portion of subscribed capital, from 1% to 0.5%, and
those shares were released to unallocated share capital.
The above share capital is analyzed as follows:
At At
Authorized share capital 3,450,000 3,450,000
Less: unallocated share capital* (1,161,500) (1,161,500)
Subscribed share capital 2,288,500 2,288,500
Less: shares not yet called (1,601,950) (1,601,950)
Paid-up share capital 686,550 686,550
Advance against future call - -
Paid-in share capital 686,550 686,550
* Shares available to new or existing Member States.
Initial Capital
In accordance with paragraph 2 under Article 5 of the Establishing Agreement, the initially authorized
capital stock was subscribed by and issued to each Member as follows: 10% (EUR 115 million) fully paid
and 20% (EUR 230 million) payable by promissory notes or other obligations which were not negotiable
and non-interest bearing in eight equal successive annual installments in the years 1998 to 2005.
Capital Increase
The capital increase of EUR 1.15 billion is divided into EUR 345 million paid in capital and EUR 805 million
callable capital. Pursuant to the Board of Governors decision in October 2008, the EUR 345 million paid in
portion is divided into 10% (EUR 115 million) fully paid shares in 2010 and 20% (EUR 230 million) payable
shares by promissory notes or other obligation issued by members in eight equal successive annual
installments in the years 2011 to 2018. As of October 2011, the capital increase was reduced by EUR 11.5
million of the subscribed share capital, due to an approved reduction by the BoG in participation by
Moldova.
The initial and capital increase that was issued is analyzed as follows:
At
31 December
2020
Initial Capital
Presented in EUR (000) capital increase Total
Authorized share capital 1,150,000 2,300,000 3,450,000
Less: unallocated share capital (34,500) (1,127,000) (1,161,500)
Subscribed share capital 1,115,500 1,173,000 2,288,500
Less: shares not yet called (780,850) (821,100) (1,601,950)
Paid-up share capital 334,650 351,900 686,550
Advance against future call 40 (40) -
Paid-in share capital 334,690 351,860 686,550
64
Statement of Subscriptions
A statement of capital subscriptions illustrating the number of shares and the amount subscribed by each
member is shown below, including their respective callable, payable and the amount paid. The capital
subscription status at the current financial position date is analyzed as follows:
Subscribed Callable Payable Paid
Member Shares Presented in EUR (000)
Albania 40,000 46,000 32,200 - 13,800

Armenia 20,000 23,000 16,100 - 6,900
Azerbaijan 100,000 115,000 80,500 - 34,500
Bulgaria 270,000 310,500 217,350 - 93,150
Georgia 10,000 11,500 8,050 - 3,450
Greece 330,000 379,500 265,650 - 113,850
Moldova 10,000 11,500 8,050 - 3,450
Romania 280,000 322,000 225,400 - 96,600
Russian Fed. 330,000 379,500 265,650 - 113,850
Turkey 330,000 379,500 265,650 - 113,850
Ukraine 270,000 310,500 217,350 - 93,150
Total 1,990,000 2,288,500 1,601,950 - 686,550
24. RESERVES
Reserves are analyzed as follows:
Revaluation
Presented in EUR (000) General reserve Other Total
At 31 December 2018 66,051 (32,374) (720) 32,957
Gains (losses) on revaluation of investments - 16,737 - 16,737
Actuarial (losses) gains on defined benefit scheme - - (3,020) (3,020)
Transferred from retained earnings 7,335 - - 7,335
At 31 December 2019 73,386 (15,637) (3,740) 54,009
Gains (losses) on revaluation of investments - 1,120 - 1,120
Actuarial (losses) gains on defined benefit scheme - - (2,036) (2,036)
Transferred from retained earnings 5,205 - - 5,205
At 31 December 2020 78,591 (14,517) (5,776) 58,298
The Bank’s general reserve is maintained for meeting any unforeseeable risks or contingencies that do not
qualify as provisions for impairment and is normally built-up from those released impairment charges during
the year. The other reserve primarily contains the remeasurements of the Bank’s defined benefit pension
scheme.
65
25. CASH AND CASH EQUIVALENTS
Cash and cash equivalents is analyzed as follows:
At At
Cash on hand 2 4
Due from banks 34,326 81,267
Investments maturing up to 1 month:
At fair value through other comprehensive income portfolio 86,782 147,917
Investment maturing from 1 month to 3 months:
At fair value through other comprehensive income portfolio 151,556 55,000
Cash and cash equivalents 272,666 284,188
The commercial papers held in the Bank’s portfolio were short term rated at a minimum of A2 by Standard
and Poor’s or P2 by Moody’s rating agencies, in accordance with the Bank’s internal financial policies.
66
26. EMPLOYEE BENEFITS
Under the Defined Benefit Scheme
If separated or after the normal retirement age (60 years old), a staff member will be entitled to a full
immediate pension equal to 1% of his annual pensionable salary (i.e. average of the two best out of the
last five years) multiplied by his/her years of service at the Bank. If separated at or after the early retirement
age (55 years old), a staff member will be entitled to a reduced immediate pension, or deferred pension
payable from any month until the staff member’s normal retirement age. If separated before the early
retirement age, a staff member will be entitled to a deferred pension payable from any month between the
staff member’s early and normal retirement age. Upon separation at any age, a staff member will have a
choice between the appropriate type of pension and a lump sum termination benefit.
A qualified actuary performs an actuarial valuation of this scheme at each end of year using the projected
unit method, which is rolled forward to the following year accounts. The most recent valuation date was 31
December 2020. The present value of the defined benefit obligation and current service cost was calculated
using the projected unit credit method.
At At
Amounts recognized in the statement of financial position
Present value of the defined benefit obligations 34,427 30,736

Fair value of plan assets (24,198) (23,200)
Net liability at end of the year 10,229 7,536
Amounts recognized in the income statement
Service cost 2,115 1,752

Net interest on the net defined benefit liability/(asset) 84 70
Administration expense 49 49
Total included in personnel expenses 2,248 1,871
Remeasurements recognized in other comprehensive income
At 31 December (7,327) (4,307)

Liability gain (loss) due to changes in assumptions (2,819) (4,745)
Liability experiences gain (loss) arising during the year 319 (296)
Return on plan assets excluding income statement amounts 464 2,021
Total amount recognized in OCI during the year (2,036) (3,020)
Cumulative in other comprehensive income (expense) (9,363) (7,327)
Principal actuarial assumptions used
Discount rate 0.80% 1.22%

Expected return on plan assets 0.80% 1.22%
Future salary increase 1.00% 1.50%
Future pension increase 1.50% 1.50%
Average remaining working life of employees 11 years 11 years
The discount rate arises from the yield curves that use data from double A-rated iBoxx bond indices
produced by the International Index Company.
The expected return on assets as per provision of the revised IAS 19, has been set equal to the discount
rate assumption, i.e. at 0.80% pa.
67
The following table presents the major categories and reconciliation of the plan assets (the Fund):
At At
Major categories of plan assets
Cash instruments 12% 17%

Fixed interest 47% 43%
Equities 37% 36%
Other 4% 4%
Reconciliation of plan assets
Market value at 1 January 23,200 20,474

Expected return 290 427
Contributions paid 1,591 1,326
Benefit pensions and lump sum paid to pensioners (1,298) (999)
Expenses (49) (49)
Asset gain (loss) 464 2,021
Fair value of plan assets 24,198 23,200
The actual investment return on assets of the Fund for the year was 3.7%. The expected return on plan
assets has been based on asset structure allowed by the Fund as well as the yield of high quality corporate
bonds. The Bank estimate of contributions to be paid in 2021 will not materially differ from those paid in
the current year.
The funding status at year end and at the end of the last four years was as follows:
Presented in EUR (000) 2020 2019 2018 2017 2016

Defined benefit obligations 34,427 30,736 24,445 27,111 25,021
Plan assets (24,198) (23,200) (20,474) (21,879) (20,373)
Plan deficit (surplus) 10,229 7,536 3,971 5,232 4,648
Net experience adjustments on plan

liabilities (assets) (319) 296 359 (419) 4,032
Sensitivity analysis
Reasonable possible changes at the financial position date to one of the relevant actuarial assumptions,
holding other assumptions constant, would have affected the defined benefit obligation by the amounts
shown below.
At At
2020 2019
Presented in EUR (000) Increase Decrease Increase Decrease

Discount rate (1% movement) (3,303) 3,303 (3,573) 3,573
Future salary growth (1% movement) 2,381 (2,381) 1,872 (1,872)
Although the analysis does not take account of the full distribution of cash flows expected under the plan,
it does provide an approximation of the sensitivity of the assumptions shown under the Defined Benefit
Scheme.
68
Under the Defined Contribution Scheme
Upon separation, a staff member will be entitled to receive in cash the full balance standing to the credit of
his/her individual account for the second and third pillars. The pension expense under this scheme was
EUR 1,073 thousand (2019: EUR 1,050 thousand) and is included in ‘Personnel expenses’.
Under the Greek State Social Insurance Fund
The pension expense of staff that is alternatively entitled to retirement benefits from this fund was EUR 15
thousand (2019: EUR 18 thousand) and is included in ‘Personnel expense’.
27. RELATED PARTIES
The Bank has the following related parties.
Key Management Personnel
Key management personnel comprise: the President, Vice Presidents and Secretary General. They are
entitled to a staff compensation package that includes a salary, medical insurance cover, participation in
the Bank’s retirement schemes and are eligible to receive other short-term benefits. The amounts paid to
key management personnel during the year were EUR 1,257 thousand (2019: EUR 1,783 thousand). Key
management personnel may receive post-employment benefits, other long-term benefits and termination
benefits, but do not receive any share-based payments.
The members of the BoD are not personnel of the Bank and do not receive any fixed term salaries nor any
staff benefits. The governments of the Member States are not related parties.
Special funds
Special funds are established in accordance with Article 16 of the Establishing Agreement and are
administered under the terms of rules and regulations adopted by the Bank. Special Funds are audited on
an annual basis and their assets and fund balances are not included in the Bank’s statement of financial
position. During the year the Bank administered one special fund. Extracts from the audited financial
statements are included under the Note ‘Summary of special funds’.
69
28. RESTATEMENT OF PRIOR YEAR ACCOUNTS
The Bank has restated the prior year accounts for presentation purposes under IAS 1 and IFRS 7.
STATEMENT OF FINANCIAL POSITION

Presented in thousands of EUR Published Restatement Restated
Assets
Cash and due from banks 82,621 (1,350) 81,271
Deposits in margin accounts - 5,900 5,900
All other assets 2,260,816 - 2,260,816
Total Assets 2,343,437 4,550 2,347,987
Liabilities
Margin accounts - 4,550 4,550
All other liabilities 1,513,028 - 1,513,028
Total liabilities 1,513,028 4,550 1,517,578
Total members’ equity 830,409 - 830,409
Total Liabilities and Members' Equity 2,343,437 4,550 2,347,987
29. EVENTS AFTER THE REPORTING PERIOD
There have been no material events since the reporting period that would require adjustment to these
70
30. SUMMARY OF SPECIAL FUNDS
With the Hellenic Government
The Technical Cooperation Special Fund’s objective is to contribute to the economic development of the
Black Sea Region’s Member Countries. The Fund extends technical assistance grants for preparation of
high quality project documentation including business plans, feasibility studies and financial reporting
methods and standards. The movement in the Fund is shown below.
At At
Statement of movements
Balance brought forward 8 8

Net income (loss) for the year - -
Less: disbursements - -
Balance of available funds 8 8
Financial position
Placements with other financial institutions 8 8

Total Assets 8 8
Unallocated fund balance 8 8

Total Liabilities and Contributor Resources 8 8
71

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BLACK SEA TRADE AND DEVELOPMENT BANK

Financial Statements for the Year Ended

Together with Auditor’s Report

Independent Auditor’s Report 2– 5

Tel: +30 210 6781 100

INDEPENDENT AUDITOR’S REPORT

Report on the Audit of the Financial Statements

Basis for Opinion

Key Audit Matters

Τhe Bank measures Expected Credit Losses - we obtained an understanding of the

We assessed the adequacy and completeness

Auditor’s Responsibilities for the Audit of the Financial Statements

Athens, 20 May 2021

The Certified Public Accountant

Presented in thousands of EUR Note 2020 2019

Interest and similar income 7 97,856 93,969

Net fees and commissions 10 2,040 967

Personnel expenses 11,26 (16,097) (15,758)

Impairment (losses) on loans 12 (12,894) (1,841)

Presented in thousands of EUR Note 2020 2019

Income for the year 14,215 13,664

Other comprehensive income (expense):

Presented in thousands of EUR Note 2020 2019

Loans at amortized cost 5,15 2,030,396 1,808,187

Accrued interest receivable 23,512 24,334

Reserves 24 58,298 54,009

Income for the year - - - - 13,664 13,664

Members’ contributions - - 1,428 - - 1,428

Income for the year - - - - 14,215 14,215

Presented in thousands of EUR Note 2020 2019

Cash flows from operating activities

Adjustment for items in income statement:

Cash flows from investing activities

Cash flows from financing activities

Net increase (decrease) in cash and cash equivalents (11,522) 111,935

Cash and cash equivalents at beginning of year 284,188 172,253

Cash and cash equivalents at end of year 25 272,666 284,188

1.1 Agreement Establishing the Bank

1.2 Headquarters Agreement

1.3 Governing Bodies

1.3.1 Board of Governors

2. BASIS OF PREPARATION OF FINANCIAL STATEMENTS

2.1 Basis of Preparation

Functional and presentation currency

Use of Estimates and Judgments

2.2 Going Concern

3.1 Adoption of New and Amended Standards (IFRS)

• IFRS 17: Insurance Contracts

• Amendments to References to the Conceptual Framework in IFRS Standards

• Definition of a Business (Amendments to IFRS 3)

The amendments in Definition of a Business (Amendments to IFRS 3) are changes to Appendix

• Definition of Material (Amendments to IAS 1 and IAS 8)

• Classification of Liabilities as Current or Non-Current (Amendments to IAS 1)

• Onerous Contracts — Cost of Fulfilling a Contract (Amendments to IAS 37)

• Annual Improvements to IFRS Standards 2018–2020

Makes amendments to the following standards:

• Classification of Liabilities as Current or Non-current — Deferral of Effective Date

• Definition of Accounting Estimates (Amendments to IAS 8)

• Editorial Corrections (various)