bnp paribas bank jsc condensed interim international ... · in july 2018 at bank’s request...

BNP PARIBAS BANK JSC

Condensed Interim International Financial Reporting Standards Financial Information and Report on Review

30 June 2018

CONTENTS REPORT ON REVIEW OF CONDENSED INTERIM FINANCIAL INFORMATION CONDENSED INTERIM FINANCIAL INFORMATION FOR THE SIX-MONTH PERIOD ENDED 30 JUNE 2018 Condensed Interim Statement of Financial Position ..................................................................................... 1 Condensed Interim Statement of Profit or Loss and Other Comprehensive Income .................................... 2 Condensed Interim Statement of Changes in Equity .................................................................................... 3 Condensed Interim Statement of Cash Flows ............................................................................................... 4 Selected Notes to the Condensed Interim Financial Information 1 Principal activities ................................................................................................................................ 5 2 Operating Environment of the Bank .................................................................................................... 5 3 Summary of Significant Accounting Policies ....................................................................................... 6 4 Critical Accounting Estimates, and Judgements in Applying Accounting Policies ............................ 10 5 Cash and Cash Equivalents .............................................................................................................. 12 6 Due from Other Banks ...................................................................................................................... 14 7 Investments in debt securities ............................................................................................................ 15 8 Loans and Advances to Customers .................................................................................................. 15 9 Due to Other Banks ........................................................................................................................... 18 10 Customer Accounts ........................................................................................................................... 18 11 Income Taxes .................................................................................................................................... 18 12 Contingencies and commitments ...................................................................................................... 19 13 Derivatives, Financial Assets, Financial Liabilities at Fair Value through Profit or Loss................... 22 14 Fair value of Financial Assets ........................................................................................................... 23 15 Related Party Transactions ............................................................................................................... 25 16 Subsequent events ........................................................................................................................... 26

pwc

Report on Review of Interim Financial Iriformation

To the Shareholder and Supervisory Board of "BNP PARIBAS Bank" Joint Stock Company:

Introduction

We have reviewed the accompanying condensed interim statement of financial position of "BNP PARIBAS Bank" Joint Stock Company (the "Bank") as of 30 June 2018, and the related condensed statements of profit or loss and other comprehensive income, changes in equity and cash flows for the six-month period then ended. Management is responsible for the preparation and presentation of this condensed interim financial information in accordance with International Accounting Standard 34, "Interim Financial Reporting". Our responsibility is to express a conclusion on this condensed interim financial information based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim financial information is not prepared, in all material respects, in accordance with International Accounting Standard 34, "Interim Financial Reporting".

;f() &e&v1t<4r� o/� 27 August 2018

e no. 01-000397),

Audited entity: "BNP PARIBAS Bank" Joint stock company

State registration certificate No. 3407, issued by the Central Bank of the Russian Federation on 28 May 2002

Certificate of inclusion in the Unified State Register of Legal Entities issued on 22 July 2002 under registration No. 1027700045780

125047, Russian Federation, Moscow, 5 Lesnaya St., White Square Business Center, Bid. B

AO PricewaterhouseCoopers Audit

Independent auditor: AO PricewaterhouseCoopers Audit

State registration certificate No. 008.890, issued by the Moscow Registration Chamber on 28 February 1992

Certificate of inclusion in the Unified State Register of Legal Entities issued on 22 August 2002 under registration No. 1027700148431

Member of Self-regulated organization of auditors "Russian Union of auditors" (Association)

ORNZ 11603050547 in the register of auditors and audit organizations

White Square Office Center 10 Butyrsky Val Moscow, Russia, 125047 T: +7(495) 967-6000, F:+7(495) 967-6001, www.pwc.ru

BNP Paribas Bank JSC Selected notes for Condensed Interim financial information

5

1 Principal activities

The Bank was incorporated and is domiciled in the Russian Federation. The Bank is a joint stock company and was set up in accordance with Russian regulations.

The Bank’s principal business activity is commercial banking operations within the Russian Federation. The Bank accepts deposits from the legal entities and provides loans, transfers payments in Russia and abroad, exchanges currencies, trades derivative financial instruments and provides other banking services to its commercial customers. The Bank has operated under the banking license issued by the Central Bank of the Russian Federation (“CBRF”) since 10 July 2002.

The Bank participates in the state deposit insurance scheme, which was introduced by Federal Law No. 177-FZ “Deposits of individuals insurance in Russian Federation” dated 23 December 2003. The State Deposit Insurance Agency guarantees repayment of 100% of individual deposits up to RR 1 400 thousand per individual in the case of the withdrawal of a licence of a bank or a CBRF imposed moratorium on payments.

The Bank is directly and ultimately controlled by BNP Paribas S. A. (incorporated in France) (the “Parent Bank”), which owns 100% of the ordinary shares. Being a subsidiary of BNP Paribas S.A., the Bank is a part of the international banking network of BNP Paribas.

In January 2018 ACRA Rating Agency assigned the Bank AAA national scale rating with stable outlook.

In July 2018 at Bank’s request S&P Global Ratings withdrew its 'BBB-/A-3' long- and short-term issuer credit ratings on the Bank. The outlook was stable at the time of the withdrawal.

Registered address and place of business. The Bank’s registered address is: 5 Lesnaya St., White Square Business Center, Bld. B., Moscow, 125047, Russian Federation.

The average number of the Bank’s employees during six month period ended 30 June 2018 was 129 (2017: 121).

Presentation currency. This financial information is presented in thousand Russian Roubles (“RR”), unless otherwise stated.

2 Operating Environment of the Bank

Russian Federation. The Russian Federation displays certain characteristics of an emerging market. Its economy is particularly sensitive to oil and gas prices. The legal, tax and regulatory frameworks continue to develop and are subject to frequent changes and varying interpretations (Note 12). During 2018, the Russian economy continued to be negatively impacted by low oil prices, ongoing political tension in the region and international sanctions against certain Russian companies and individuals. The financial markets continue to be volatile and are characterised by frequent significant price movements and increased trading spreads. This operating environment has a significant impact on the Bank’s operations and financial position. Management is taking necessary measures to ensure sustainability of the Bank’s operations. However, the future effects of the current economic situation are difficult to predict and management’s current expectations and estimates could differ from actual results.

The Bank acts in accordance with Russian regulations and BNP Paribas Group requirements. It has set up and constantly updates its systems and measures on anti-money laundering, on combatting the financing of terrorism, and on ensuring its compliance with UN Sanctions.


6

3 Summary of Significant Accounting Policies

Basis of preparation. This condensed interim financial information has been prepared for BNP PARIBAS BANK JSC (the “Bank”) in accordance with IAS 34 “Interim financial statements”. This condensed interim financial information should be read in conjunction with the annual financial statements for 2017 prepared in accordance with International Financial Reporting Standards (“IFRS”).

This condensed interim financial information does not include all the information and disclosures required in the annual financial statements. The Bank omitted disclosures which would substantially duplicate the information contained in its audited annual financial statements for 2017 prepared in accordance with IFRS, such as accounting policies and details of accounts which have not changed significantly in amount or composition.

This condensed interim financial information has been prepared in accordance with IFRS under the

historical cost convention, as modified by the initial recognition of financial instruments based on fair value, and by the revaluation of financial instruments categorised at FVTPL and at FVOCI.

Apart from the accounting policy changes resulting from the adoption of IFRS 9 and IFRS 15 effective from 1 January 2018, principal accounting policies applied in the preparation of this condensed interim financial information reflect those applied for preparation of annual financial statements for 2017.

Going concern. Management prepared this condensed interim financial information on a going concern basis. The management and shareholder have an intention to further develop the business of the Bank in Russian Federation in corporate segment.

Foreign currency translation. For the purposes of condensed interim financial information preparation monetary assets and liabilities are translated into each entity’s functional currency at the official exchange rate of the CBRF at the last working day of reporting period. Foreign exchange gains and losses resulting from the settlement of transactions and from the translation of monetary assets and liabilities into each entity’s functional currency, are recognised in profit or loss for the period (as foreign exchange translation gains less losses).

As at 30 June 2018 the principal rate of exchange used for translating foreign currency balances was USD 1 = RR 63.291 (31 December 2017: USD 1 = RR 57.6002), EUR 1 = RR 73.0884 (31 December 2017: EUR 1 = RR 68.8668).

Adoption of IFRS 15. The Bank has adopted IFRS 15, Revenue from Contracts with Customers, with the date of initial application of 1 January 2018, which did not result in any material impact on the Bank.

Adoption of IFRS 9. The Bank has adopted IFRS 9, Financial Instruments, with a date of transition of 1 January 2018, which resulted in changes in accounting policies for recognition, classification and measurement of financial assets and liabilities and impairment of financial assets.

The adoption of the standard is the result of long-term Group level project aimed at creating reporting and risk monitoring methods that ensure full compliance with the standard. The project was organised through specific work-streams:

- Classification and measurement work-stream, aimed at reviewing the classification of the financial instruments according to new IFRS 9 criteria;

- Impairment work-stream, aimed at developing and implementing models and methodologies for impairment calculation.

The Bank elected not to restate comparative figures and recognised any adjustments to the carrying amounts of financial assets and liabilities at the date of initial application in the opening retained earnings of the current period. Consequently, the revised requirements of the IFRS 7, Financial Instruments: Disclosures, have only been applied to the current period. The comparative period disclosures repeat those disclosures made in the prior year.

Details of the specific IFRS 9 accounting policies applied in the current period are described below.


7

3 Summary of significant accounting policies (Continued)

Financial assets – classification and subsequent measurement – measurement categories. The Bank classifies financial assets in the following measurement categories: FVTPL, FVOCI and AC. The classification and subsequent measurement of debt financial assets depends on:

1) the Bank’s business model for managing the asset; and

2) the cash flow characteristics of the asset.

Financial assets – classification and subsequent measurement – business model. The business model reflects how the Bank manages the assets in order to generate cash flows – whether the Bank’s objective is:

i) solely to collect the contractual cash flows from the assets (“hold to collect contractual cash flows”,); or

ii) to collect both the contractual cash flows and the cash flows arising from the sale of assets (“hold to collect contractual cash flows and sell”);

iii) if neither of i) and ii) is applicable, the financial assets are classified as part of “other” business model and measured at FVTPL.

Business model is determined for a group of assets (on a portfolio level) based on all relevant evidence about the activities that the Bank undertakes to achieve the objective set out for the portfolio available at the date of the assessment. Factors considered by the Bank in determining the business model include the purpose and composition of a portfolio, past experience on how the cash flows for the respective assets were collected, how risks are assessed and managed, how the assets’ performance is assessed and how managers are compensated. Refer to Note 4 for critical judgements applied by the Bank in determining the business model for its financial assets.

Financial assets – classification and subsequent measurement – cash flow characteristics. Where the business model is to hold assets to collect contractual cash flows or to hold contractual cash flows and sell, the Bank assesses whether the cash flows represent solely payments of principal and interest (the SPPI test). In this regard Bank has applied the SPPI questionnaire developed by BNP Paribas Group for all financial assets.

In making this assessment, the Bank considers whether the contractual cash flows are consistent with a basic lending arrangement, i.e. interest includes only consideration for credit risk, time value of money, other basic lending risks and profit margin. Where the contractual terms introduce exposure to risk or volatility that is inconsistent with a basic lending arrangement, the financial asset is classified and measured at FVTPL. The SPPI assessment is performed on initial recognition of an asset and it is not subsequently reassessed. However, if the contractual terms of the asset are modified, the Bank considers if the contractual cash flows continue to consistent with a basic lending arrangement in assessing whether the modification is substantial.

Financial assets – reclassification. Financial instruments are reclassified only when the business model for managing those assets changes. The reclassification has a prospective effect and takes place from the start of the first reporting period following the change.

Financial assets – impairment – credit loss allowance for Expected credit losses (ECL).

The Bank applies impairment tests to the following categories of financial instruments:

- Financial assets measured at amortised cost,

- Financial debt instruments (loans, bonds, trade receivables) measured at fair value through other comprehensive income,

- Loan commitments and financial guarantees that are not accounted for at fair value through profit or loss.


8


The determination of the IFRS 9 provision results from a three-step approach. As a first step, the financial instrument has to be allocated to one of the three impairment stages by determining whether a significant increase in credit risk has occurred since initial recognition or whether the financial instrument is defaulted. The increase in credit risk is measured through the change in the likelihood or risk of a default occurring: on the financial instrument as at the reporting date as compared to the risk of default occurring on this financial instrument as at the origination date.

As a second step, the expected credit loss is calculated: 12-month expected loss for all financial instruments in stage 1 and lifetime expected credit loss for all financial instruments in stage 2; financial instruments in stage 3 are covered by specific provisions.

As a third step, being consistent with internal Group standards, the Bank calculates expected loss based on probability of default (PD), loss given default (LGD) and exposure at default (EAD) computed in accordance with internal Group models. As required by IFRS 9, the Bank integrates in provisions determination forward-looking information which is done in accordance with the models and principles set forth by BNP Paribas Group.

Financial impact of the IFRS 9 adoption. The impact of the IFRS 9 adoption on the Bank’s financial information as of 1 January 2018 is disclosed below.

The following table reconciles the carrying amounts of financial assets, from their previous measurement categories in accordance with IAS 39 into their new measurement categories upon transition to IFRS 9 on 1 January 2018:

In thousands of Russian Roubles (AUDITED)

Measurement category

Carrying value per

IAS 39 (closing

balance at 31 December

2017)

Effect Carrying value per

IFRS 9 (opening

balance at 1 January

2018)

IAS 39 IFRS 9 ECL Remeasurement

Reclassifica-tion

Cash and cash equivalents L&R* AC** 26 725 769 (13 928) - 26 711 841

Mandatory cash balances with the Central Bank of the Russian Federation L&R AC 372 866 - - 372 866

Derivatives and financial assets at fair value through profit or loss FVTPL FVTPL 11 647 575 - - 11 647 575

Due from other banks L&R AC 3 620 886 - - 3 620 886

Loans and advances to customers L&R AC 7 253 069 (5 249) - 7 247 820

Investments in debt securities AFS AC 2 255 554 - (17 814) 2 237 740

Other financial assets L&R AC 128 455 - - 128 455

Credit-related commitments - - - (1 829) - -

Total financial assets 52 004 174

(21 006)

(17 814) 51 967 183

*L&R – Loans and receivables, **AC- Amortised cost

At 31 December 2017, all of the Bank’s financial liabilities except for derivatives were carried at AC. Starting from 1 January 2018 the Bank’s financial liabilities except for derivatives continued to be classified at AC. The derivatives were reclassified from FVTPL measurement category under IAS 39 to FVTPL (mandatory) measurement category under IFRS 9.


9


The below disclosure describes the reclassification principles applied upon transition from IAS 39 to IFRS 9 on 1st of January 2018:

(a) Cash and cash equivalents

All classes of cash and cash equivalents as disclosed in Note 5 were reclassified from L&R measurement category under IAS 39 to AC measurement category under IFRS 9 at the transition date. Bank recognised credit loss allowance for cash and cash equivalents balances in amount of RR 13 928 thousand at 1st of January 2018.

(b) Due from other banks balances

All classes of due from other banks balances were reclassified from L&R measurement category under IAS 39 to AC measurement category under IFRS. No credit loss allowance was recognized for due from banks balances as these balances are fully represented by settlements with Parent bank or its subsidiaries and guarantee deposit with Trading system.

(c) Investments in debt securities

New classification requirements of IFRS 9 led to changes in classification of investments in debt securities. Starting from 1st of January 2018 all the investments in debt securities were classified at AC. Following the assessment of its business model for securities within the Bank’s debt securities portfolio, Bank relied on past experience that securities are managed mostly for collecting of contractual cash flows. Consequently, the Bank has assessed that the appropriate business model for this group of securities is held to collect. No credit loss allowance was recognized for investments in debt securities as these balances are fully represented by OFZ placed by Russian Ministry of Finance.

(d) Loans and advances to customers

All classes of loans and advances to customers balances were reclassified from L&R measurement category under IAS 39 to AC measurement category under IFRS 9 with the credit loss allowance recognized at the transition date in amount of RR 5 249 thousand. Bank performed SPPI analysis for all exposures existing as of 1 January 2018 and did not identify any exposures failing SPPI test.

(e) Other financial assets

All classes of other financial assets balances were reclassified from L&R measurement category under IAS 39 to AC measurement category under IFRS 9 with no credit loss allowance recognised at the transition date.


10


(f) Reconciliation of provision for impairment at 31 December 2017 and credit loss allowance at 1 January 2018

The following table reconciles the prior period's closing provision for impairment measured in accordance with incurred loss model under IAS 39 to the new credit loss allowance measured in accordance with expected loss model under IFRS 9 at 1 January 2018:

In thousand or Russian Roubles (AUDITED)

Measurement category Provision for impairment

under IAS 39 or IAS 37 at

31 December 2017

Effect Credit loss allowance

under IFRS 9 at 1 January

2018

IAS 39 IFRS 9

Cash and cash equivalents L&R AC - 13 928 13 928

Due from other banks L&R AC - - -

Loans and advances to customers L&R AC 397 571 5 249 402 820

Investment securities AFS AFS AC - - -

Credit related commitments - - - 1 829 1 829

Total 397 571 21 006 418 577

Further information on the measurement of the credit loss allowance under IFRS 9 is disclosed in respective notes.

Adoption of Other New or Revised Standards and Interpretations. The following amended standards became effective for the Bank from 1 January 2018, but did not have any material impact on the Bank:

Amendments to IFRS 2, Share-based Payment (issued on 20 June 2016 and effective for annual periods beginning on or after 1 January 2018).

Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts ‒ Amendments to IFRS 4 (issued on 12 September 2016 and effective, depending on the approach, for annual periods beginning on or after 1 January 2018 for entities that choose to apply temporary exemption option, or when the entity first applies IFRS 9 for entities that choose to apply the overlay approach).

Annual Improvements to IFRSs 2014-2016 cycle ‒ Amendments to IFRS 1 an IAS 28 (issued on 8 December 2016 and effective for annual periods beginning on or after 1 January 2018).

IFRIC 22 ‒ Foreign Currency Transactions and Advance Consideration (issued on 8 December 2016 and effective for annual periods beginning on or after 1 January 2018).

Transfers of Investment Property ‒ Amendments to IAS 40 (issued on 8 December 2016 and effective for annual periods beginning on or after 1 January 2018).

4 Critical Accounting Estimates, and Judgements in Applying Accounting Policies

The Bank makes estimates and assumptions that affect the amounts recognised in the financial information and the carrying amounts of assets and liabilities within the next financial year. Estimates and judgements are continually evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Management also makes certain judgements apart from those involving estimations, in the process of applying the accounting policies. Judgements that have the most significant effect on the amounts recognised in this condensed interim financial information and estimates that can cause a significant adjustment to the carrying amount of assets and liabilities within the next financial year include:


11

4 Critical Accounting Estimates, and Judgements in Applying Accounting policies (Continued)

Determining business model and applying SPPI test. In determining the appropriate measurement category for debt financial instruments, Bank applies two assessments: the business model assessment for managing the assets and the SPPI test based on contractual cash flows characteristics on initial recognition. The business model assessment is determined on a certain level of aggregation and the Bank was required to apply judgement to determine the level at which business model condition is applied.

When assessing sales transactions, the Bank considers their historical frequency, timing and value, reasons for the sales and expectations about future sales activity. Sales transactions aimed at minimising potential losses due to credit deterioration are considered consistent with the “hold to collect” business model. Other sales before maturity, not related to credit risk management activities, may also be consistent with the “hold to collect” business model, provided that they are infrequent or insignificant in value, both individually and in aggregate. The Bank assesses significance of sales transactions by comparing the value of the sales to the value of the portfolio subject to the business model assessment over the average life of the portfolio. In addition, the Bank assesses significance of sales transactions by comparing the gains and losses from the sales to the total return from the portfolio subject to the business model assessment over the average life of the portfolio. Sales of financial asset expected only in stress case scenario, or in response to an isolated event that is beyond the Bank’s control, is not recurring and could not have been anticipated by the Bank, are regarded as incidental to the business model objective and do not impact the classification of the respective financial assets.

For the “hold to collect and sell” business model, selling of financial assets is integral to achieving the business model’s objective, such as: managing liquidity needs, achieving a particular interest yield, or matching the duration of the financial assets to the duration of the liabilities that are funding those assets.

FVTPL business model is the residual category and it also includes those financial assets, which are managed with the objective of realising cash flows solely through the sale. For this business model, the collection of contractual cash flow is incidental.

On transition to IFRS 9, the Bank classified all AFS securities as held to collect based on the assumption that these securities would only be sold in a stress case scenario which, at the transition date, could not be reasonably foreseen.

The assessment of the SPPI criterion performed on initial recognition of financial assets involves the use of significant estimates in quantitative testing and it requires considerable judgement in deciding when it is necessary to apply a quantitative test, which scenarios are reasonably possible and should be considered and in interpreting the results of the quantitative testing (i.e. determining what represents a significant difference in cash flows). The key contractual features subject to a qualitative or quantitative assessment of SPPI are the following:

i) Modified time value of money: in some cases the time value of money component may be modified so that it does not provide consideration for only the passage of time, for example, if a contractual interest rate is periodically reset but the frequency of that reset does not match the tenor of the interest rate. In assessing the assets with a modified time value of money, the Bank compares the undiscounted contractual cash flows of the asset under assessment to the cash flows of a “benchmark” instrument (the cash that would arise if the time value of money was not modified). The effect of the modified time value of money is considered in each reporting period and cumulatively over the life of the instrument. If the difference between the cash flows of the two instruments are significantly different, the SPPI test failed.

ii) Contractual terms that change the timing or amount of contractual cash flows: for such financial assets, the Bank compares the contractual cash flows that could arise before and after the change to assess if both set of the cash flows meet the SPPI criterion. If the cash flows before and after the change are significantly different, the asset does not meet the SPPI criterion. In some cases, a qualitative assessment may be sufficient.


12

4 Critical Accounting Estimates, and Judgements in Applying Accounting policies (Continued)

iii) Non-recourse feature where the Bank’s right of recourse is contractually limited only to the assets (financial or non-financial) securing the respective loan: for loans with such features, the Bank “looks through” to the underlying assets or cash flows to determine whether they are sufficient to fully satisfy the Bank’s claim. A similar approach is applied to the instruments which do not include contractual non-recourse clauses but their repayment depends solely on performance of certain projects or assets (in-substance, non-recourse). If the non-recourse feature limits the cash flows in a manner inconsistent with the SPPI criterion, the instrument is measured at FVTPL.

As of 30 June 2018 no instruments were measured at FVTPL due to failure of SPPI test (1 January 2018, no instruments).

Tax legislation. Russian tax currency and customs legislation is subject to varying interpretations. Refer to Note 12.

Initial recognition of related party transactions. In the normal course of business the Bank enters into transactions with its related parties. IFRS 9 requires initial recognition of financial instruments based on their fair values. Judgement is applied in determining if transactions are priced at market or non-market interest rates, where there is no active market for such transactions. The basis for judgement is pricing for similar types of transactions with unrelated parties and effective interest rate analysis. Terms and conditions of related party balances are disclosed in Note 15.

5 Cash and Cash Equivalents

In thousands of Russian Roubles 30 June 2018

(Unaudited) 31 December

2017

Cash balances with the CBRF (other than mandatory cash balances with the

CBRF) 19 770 645 19 852 191 Correspondent accounts with other banks - Russian Federation 4 454 154 4 335 556 - other countries 930 037 728 424 Placements with other banks with original maturities of less than three months 6 228 121 1 809 598 Credit loss allowance (12) -

Total cash and cash equivalents 31 382 945 26 725 769


13

5 Cash and cash equivalents (Continued)

The following table contains an analysis of cash and cash equivalents balances by credit quality at 30 June 2018 based on credit risk grades and discloses cash and cash equivalents balances by stages for the purpose of ECL measurement. The carrying amount of cash and cash equivalents balances at 30 June 2018 below also represents the Bank’s maximum exposure to credit risk on these assets:

In thousands of Russian Roubles

Stage 1 (12-months ECL)

(Unaudited)

Cash and cash equivalents

- Parent Bank and its subsidiaries 5 728 452 - The Central Bank of Russian Federation 19 770 645 - Trading system 4 446 524 Cash and cash equivalents - Internal rating 1+ 1 429 705 - Internal rating 5+ 3 000 - Internal rating 5 4 631

Gross carrying amount 31 382 957

Credit loss allowance (12)

Total Cash and cash equivalents (carrying amount) 31 382 945

Principles of credit risk grading used in the tables above corresponds to the principles of credit risks management policy described in annual financial statements for 2017.

Movements in the credit loss allowance for reporting period are as follows:


Six-month period ended 30 June

2018 (Unaudited)


2017 (Unaudited) Provision for impairment as at 31 December 2017

- -

Effect of change in accounting policy due to IFRS 9 adoption

13 928 -

Credit loss allowance at 1 of January 2018 according to IFRS 9 13 928

Recovery of provision for impairment during the period (13 766) - Foreign exchange effect (150) - Credit loss allowance as at 30 June 2018 12 -

The credit loss allowance for of cash and cash equivalents balances recognised in 2018 year is impacted by a variety of factors, as described below:

Additional allowances for new financial instruments recognised during the period, as well as releases for financial instruments derecognised in the period;

Impact on the measurement of ECL due to changes in PDs, EADs and LGDs in the period, arising from regular refreshing of inputs to models;

Foreign exchange retranslations for assets denominated in foreign currencies and other movements.


14

5 Cash and cash equivalents (Continued)

As at 30 June 2018 cash and cash equivalents were not collateralised (31 December 2017: not collateralised).

As at 30 June 2018 the Bank had 3 counterparty banks (31 December 2017: 2 banks) with aggregated cash and cash equivalent balances above RR 28 626 067 thousand (31 December 2017: RR 24 161 807 thousand) or 91% of the cash and cash equivalents (31 December 2017: 90%).

As at 30 June 2018 the estimated fair value of cash and cash equivalents was RR 31 382 945 thousand (31 December 2017: RR 26 725 769 thousand). Refer to Note 14. Information on related party balances is disclosed in Note 15.

6 Due from Other Banks


30 June 2018 (Unaudited)

31 December 2017

Short-term placements with other banks with original maturities from three months to one year 7 228 098 3 312 430

Long-term placements with other banks with original maturities of more than a year - 288 456

Restricted cash 20 000 20 000

Total due from other banks 7 248 098 3 620 886

Restricted cash represents balances on correspondent accounts with Trading system placed by the Bank as a guarantee deposit. The Bank does not have the right to use these funds for the purposes of funding its own activities.

Amounts due from other banks are not collateralised (31 December 2017: not collateralised).

The following table contains an analysis of due from other banks balances by credit quality at 30 June 2018 based on credit risk grades and discloses due from other banks balances by three stages for the purpose of ECL measurement. The carrying amount of due from other banks balances at 30 June 2018 below also represents the Bank’s maximum exposure to credit risk on these assets:



(Unaudited)

Placements with other banks - Parent Bank and its subsidiaries 7 228 098 - Trading system 20 000

Gross carrying amount 7 248 098

Credit loss allowance -

Total due from other banks (carrying amount) 7 248 098

Bank has not recognised credit loss allowance for due from other banks balances as of 30 June 2018 (31 December 2017: no credit loss allowance)

As at 30 June 2018 the Bank had balances with 1 counterparty bank (31 December 2017: 1 bank) for total amount of RR 7 228 098 thousand (31 December 2017: RR 3 600 886 thousand) or 99.7% of the total amount due from other banks (31 December 2017: 99%).


15

6 Due from Other Banks (Continued)

As at 30 June 2018 the estimated fair value of amounts due from other banks was RR 7 248 098 thousand (31 December 2017: RR 3 620 886 thousand). Refer to Note 14.

Information on related party balances is disclosed in Note 15.

7 Investments in debt securities



2017

Debt securities at AC 3 663 397 -

Total investments in debt securities 3 663 397 -

The following table contains an analysis of investments in debt securities by credit quality at 30 June 2018 based on credit risk grades and discloses cash and cash equivalents balances by stages for the purpose of ECL measurement. The carrying amount of cash and cash equivalents balances at 30 June 2018 below also represents the Bank’s maximum exposure to credit risk on these assets:



(Unaudited)

Investments in debt securities

- Ministry of Finance (OFZ) 3 663 397

Credit loss allowance -

Total Investments in debt securities (carrying amount) 3 663 397

The primary factor that the Bank considers in determining whether a debt security is impaired and its overdue status.

OFZ are Russian Rouble denominated government securities issued by the Ministry of Finance of the Russian Federation. OFZ bonds have maturity dates from February 2019 to January 2023, coupon rate from 6.40% to 7.60% and yield to maturity from 6.75% to 7.50% depending on the type of bond issue.

As at 30 June 2018 the estimated fair value of investments in debt securities for sales was RR 3 623 146 thousand.

Information on related party balances is disclosed in Note 15.

8 Loans and Advances to Customers



31 December 2017

Gross carrying amount of loans and advances to customers at AC 7 768 419 7 650 640 Less credit loss allowance (401 287) (397 571)

Total loans and advances to customers 7 367 132 7 253 069


16

8 Loans and Advances to Customers (Continued)

The following table discloses the changes in the credit loss allowance and gross carrying amount for loans and advances to customers between the beginning and the end of the reporting period:

Credit loss allowance (unaudited) Gross carrying amount (unaudited)

In thousands of Russian

Roubles

Stage 1 (12-months

ECL)

Stage 3 (lifetime ECL)

Total Stage 1 (12-months

ECL)

Stage 3 (lifetime ECL)

Total

At 1 January 2018

(Audited) (5 249) (397 571) (402 820) 7 253 069 397 571 7 650 640 Movements with impact

on credit loss allowance charge for the period:

New originated or

purchased (1 778) - (1 778) 2 072 324 - 2 072 324

Repaid during the period 4 528 - 4 528 (2 172 346) - (2 172 346) Changes in accrued

interest (991) - (991) 39 791 - 39 791

Total movements with

impact on credit loss allowance charge for the period 1 759 - 1 759 (60 231) - (60 231)

Movements without

impact on credit loss allowance charge for the period:

Foreign exchange effect (226) - (226) 178 010 - 178 010

At 30 June 2018 (3 716) (397 571) (401 287) 7 370 848 397 571 7 768 419

Movements in the credit loss allowance for reporting period are as follows:



2018 (Unaudited)


2017 (Unaudited)

Provision for impairment as at 31 December 2017

397 571 -


5 249 -

Credit loss allowance at 1 of January 2018 according to IFRS 9 402 820 406 059

Recovery of provision for impairment during the year (1 759) (8 204) Foreign exchange effect 226 (284)

Credit loss allowance as at 30 June 2018 401 287 397 571

During six-month period ended 30 June 2018, the amount of RR 30 thousand was received from consumer loans which were previously written off (RR 70 thousand received during six-month period ended 30 June 2017).


17

8 Loans and Advances to Customers (Continued)

The credit quality of loans outstanding as at 30 June 2018 and 31 December 2017 may be summarised as follows:



31 December 2017

BNP Paribas Group subsidiary 4 410 673 3 687 362 Current and not impaired Internal rating 5 2 009 945 2 363 554 Internal rating 6 758 302 - Internal rating 7 - 930 857 Internal rating 8+ 191 928 271 296

Total neither past due nor impaired 7 370 848 7 253 069

Impaired loans - over 360 days overdue 397 571 397 571

Total individually impaired loans (gross) 397 571 397 571

Total loans and advances (gross) 7 768 419 7 650 640

Less provision for loan impairment (401 287) (397 571)

Total loans and advances to customers 7 367 132 7 253 069

Principles of credit risk grading used in the tables above corresponds to the principles of credit risks management policy described in annual financial statements for 2017.

At 30 June 2018 the Bank had 3 borrowers (31 December 2017: 3 borrowers) with aggregated loan amounts above RR 7 006 312 thousand. The total aggregate amount of these loans was RR 7 006 312 thousand (31 December 2017: RR 6 896 179 thousand) or 90% of the gross loan portfolio (31 December 2017: 90%).

The Bank’s policies regarding obtaining collateral have not significantly changed during the reporting period and there has been no significant change in the overall quality of the collateral held by the Bank since the prior reporting period.

At 30 June 2018 the estimated fair value of loans and advances to customers approximates its carrying value (31 December 2017: approximates its carrying value). Refer to Note 14. Information on related party balances is disclosed in Note 15.


18

9 Due to Other Banks



2017

Term placements of other banks 3 568 086 4 912 366 Correspondent accounts of other banks 2 077 232 2 451 233

Total due to other banks 5 645 318 7 363 599

At 30 June 2018 the Bank had balances with 2 counterparty bank (31 December 2017: 1 bank) with aggregated amounts of RR 4 032 095 thousand (31 December 2017: RR 6 072 419 thousand) or 71% of the total amount due to other banks (31 December 2017: 82%).

Term placements of other banks are mainly provided by the Parent bank and its subsidiaries. Further information on related party balances is disclosed in Note 15.

At 30 June 2018 the estimated fair value of due to other banks was RR 5 645 318 thousand (31 December 2017: RR 7 363 599 thousand). Refer to Note 14.

10 Customer Accounts



31 December 2017

Legal entities - Current/settlement accounts 4 614 428 3 347 963 - Term deposits 25 235 372 15 895 152 Individuals - Current/demand accounts 625 771

Total customer accounts 29 850 425 19 243 886

At 30 June 2018 the Bank had 2 customers (31 December 2017: 2 customers) with aggregated amount of RR 16 881 329 thousand (31 December 2017: RR 10 388 909) or 57% of the total customer accounts amount (31 December 2017: 54%). As at 30 June 2018 the estimated fair value of customer accounts was RR 29 850 425 thousand (31 December 2017: RR 19 243 886 thousand). Refer to Note 14. Information on related party balances is disclosed in Note 15.

11 Income Taxes

Income tax expense recorded in profit or loss for the six month period ended 30 June 2018 comprises the following:


Six-month period ended 30 June 2018

(Unaudited)

Six-month period ended 30 June 2017

(Unaudited)

Current income tax 59 060 165 481 Deferred income tax (2 321) (92 414) Income tax related to previous years’ operations 21 822 17 963 Income tax expense for the period 78 561 91 030


19

12 Contingencies and commitments

Legal proceedings. At 30 June 2018, the Bank was engaged in litigation proceedings with consumer loans customers in relation to fees and commissions. A provision of RR 3 282 thousand has been made as at 30 June 2018 as internal professional advice has indicated that it is likely that a loss will eventuate (31 December 2017: RR 3 295 thousand).

Tax legislation. Russian tax legislation which was enacted or substantively enacted at the end of the reporting period, is subject to varying interpretations when being applied to the transactions and activities of the Bank. Consequently, tax positions taken by management and the formal documentation supporting the tax positions may be successfully challenged by relevant authorities. Russian tax administration is gradually strengthening, including the fact that there is a higher risk of review of tax transactions without a clear business purpose or with tax incompliant counterparties. Fiscal periods remain open to review by the authorities in respect of taxes for three calendar years preceding the year when decision about review was made. Under certain circumstances reviews may cover longer periods.

Management believes that the procedure for taxation of transactions employed by the Bank fully complies with Russian tax legislation. Nevertheless, there is a risk that the positions taken by the Bank may be challenged by tax authorities. The impact of such controversial situations cannot be estimated with sufficient reliability.

The Russian transfer pricing legislation is generally aligned with the international transfer pricing principles developed by the Organisation for Economic Cooperation and Development (OECD) although has specific characteristics. This legislation provides the possibility for tax authorities to make transfer pricing adjustments and impose additional tax liabilities in respect of controlled transactions (transactions with related parties and some types of transactions with unrelated parties), provided that the transaction price is not on an arm’s length basis. The management has implemented an internal control system to meet the requirements of the current transfer pricing legislation. In respect of some types of transactions (including transactions with securities and derivative contracts) there are special rules for determination of the market prices.

Tax liabilities arising from transactions between companies are determined using actual transaction prices. It is possible, with the evolution of the interpretation of the transfer pricing rules, that such transfer prices could be challenged. The impact of any such challenge cannot be reliably estimated; however, it may be significant to the financial position and/or the overall operations of the Bank.

Capital expenditure commitments. Set out below are capital expenditure commitments in respect of which the Bank has already allocated the necessary resources. The Bank believes that future net income and funding will be sufficient to cover this and any similar commitments.



2017

IT upgrades and development 29 945 47 454 Other capital expenditure commitments 2 449 2 600

Total capital expenditure commitments 32 394 50 054

Operating lease commitments. Where the Bank is the lessee, the future minimum lease payments under non-cancellable operating leases are as follows:



31 December 2017

Not later than 1 year 133 240 116 896 Later than 1 year and not later than 5 years 197 706 227 694

Total operating lease commitments 330 946 344 590


20

12 Contingencies and Commitments (Continued)

Compliance with covenants. The Bank is not subject to any covenants related primarily to its borrowings as at 30 June 2018 and 31 December 2017.

Credit related commitments. The primary purpose of these instruments is to ensure that funds are available to a customer as required. Guarantees and standby letters of credit, which represent irrevocable assurances that the Bank will make payments in the event that a customer cannot meet its obligations to third parties, carry the same credit risk as loans. Documentary and commercial letters of credit, which are written undertakings by the Bank on behalf of a customer authorising a third party to draw drafts on the Bank up to a stipulated amount under specific terms and conditions, are collateralised by the underlying shipments of goods to which they relate or cash deposits and therefore carry less risk than a direct borrowing.

Commitments to extend credit represent unused portions of authorisations to extend credit in the form of loans, guarantees or letters of credit. With respect to credit risk on commitments to extend credit, the Bank is potentially exposed to loss in an amount equal to the total unused commitments, if the unused amounts were to be drawn down. However, the likely amount of loss is less than the total unused commitments since most commitments to extend credit are contingent upon customers maintaining specific credit standards. The Bank monitors the term to maturity of credit related commitments because longer-term commitments generally have a greater degree of credit risk than shorter-term commitments. Outstanding credit related commitments are as follows:



2017

Performance guarantees issued 2 157 120 2 354 197 Financial guarantees issued 2 236 386 3 018 080

Total credit related commitments 4 393 506 5 372 277

The total outstanding contractual amount of undrawn credit lines, letters of credit, and guarantees does not necessarily represent future cash requirements, as these financial instruments may expire or terminate without being funded.

The following table contains an analysis of credit related commitments by credit quality at 30 June 2018 based on credit risk grades:



(Unaudited)

Guarantees issued - Parent Bank and its subsidiaries 746 422 Guarantees issued - Internal rating 3+ 1 084 667 - Internal rating 4- 1 958 512 - Internal rating 4+ 249 736 - Internal rating 5+ 354 169

Unrecognised gross amount 4 393 506

Provision for credit related commitments (679)


21

12 Contingencies and Commitments (Continued)

Movements in the credit loss allowance for reporting periods ended 30 June 2018 and 30 June 2017 are as follows:



2018 (Unaudited)


2017 (Unaudited)

Provision for impairment as at 31 December 2017

- -


1 829 -

Credit loss allowance at 1 of January 2018 according to IFRS 9 1 829 -

Recovery of provision for impairment during the year (1 240) - Foreign exchange effect 90 -

Credit loss allowance as at 30 June 2018 679 -

Performance guarantees are contracts that provide compensation if another party fails to perform a contractual obligation. Performance guarantee contracts represent the possibility that the insured event (i.e. the failure to perform the contractual obligation by another party) occurs. The key risks the Bank faces are significant fluctuations in the frequency and severity of payments incurred on such contracts relative to expectations. The Bank uses historical data and statistical techniques to predict levels of such payments.

As at 30 June 2018 and 31 December 2017 the financial guarantees are measured at the higher of (i) the amount of the premium initially recognised and amortized on a straight-line basis and (ii) the amount representing the best estimate of the payment required when a payment becomes probable.

As at 30 June 2018 the estimated fair value of credit related commitments was not material (31 December

2017: not material).

As at 30 June 2018 no deposits were held as collateral for irrevocable commitments under import letters of credit (31 December 2017: no deposits).

Assets pledged and restricted. Mandatory cash balances with the CBRF of RR 372 093 thousand (31 December 2017: RR 372 866 thousand) represent mandatory reserve deposits which are not available to finance the Bank’s day to day operations.


22

13 Derivatives, Financial Assets, Financial Liabilities at Fair Value through Profit or Loss

The table below sets out fair values, at the end of the reporting period, of currencies receivable or payable under foreign exchange forward contracts entered into by the Bank. The table reflects gross positions before the netting of any counterparty positions (and payments) and covers the contracts with settlement dates after the end of the respective reporting period.

30 June 2018 (unaudited) 31 December 2017


Contracts with positive

fair value

Contracts with

negative fair value

Contracts with positive

fair value

Contracts with

negative fair value

Net fair value of foreign exchange forwards 94 136 (232 463) 89 539 (11 333) Net fair value of foreign exchange swaps 54 515 (21 863) 85 315 (3 873) Net fair value of cross currency interest rate swaps 303 828 (184 750) 11 457 420 (11 353 712)

Net fair value of interest rate swaps

-

(38 619) 13 746 (95 929)

Net fair value of foreign exchange options

3

(3) 807 (807) Net fair value of derivative financial instruments 452 482 (477 698) 11 646 827 (11 465 654)

Net fair value of other assets and liabilities at Fair Value through Profit or Loss

44 832

(34 279) 748 (729)

Market risk provision - (277) - (194)

Net fair value of derivatives and other assets, liabilities at fair value through profit or loss

497 314

(512 254) 11 647 575 (11 466 577)

Market risk provision represents bid-offer adjustment to net derivatives portfolio of the Bank.

Foreign exchange and other derivative financial instruments entered into by the Bank are generally not quoted in active market and their fair value is determined by the Bank using valuation techniques with input observable in markets. Derivatives have potentially favourable (assets) or unfavourable (liabilities) conditions as a result of fluctuations in market interest rates, foreign exchange rates or other variables relative to their terms. The aggregate fair values of derivative financial assets and liabilities can fluctuate significantly from time to time.


23

14 Fair value of Financial Assets

(a) Fair values of financial instruments carried at amortized cost

Fair value is the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation, and is best evidenced by an active quoted market price.

The estimated fair values of financial instruments have been determined by the Bank using available market information, where it exists, and appropriate valuation methodologies. However, judgement is necessarily required to interpret market data to determine the estimated fair value. The Russian Federation continues to display some characteristics of an emerging market and economic conditions continue to limit the volume of activity in the financial markets. Market quotations may be outdated or reflect distress sale transactions and therefore not represent fair values of financial instruments. Management has used all available market information in estimating the fair value of financial instruments.

Financial instruments carried at fair value. All derivative financial instruments are carried at fair value as assets when the fair value is positive and as liabilities when the fair value is negative. The fair values of derivatives are based on observable market prices or valuation models.

Loans and receivables carried at amortized cost. The fair value of floating rate instruments is normally their carrying amount. The estimated fair value of fixed interest rate instruments is based on estimated future cash flows expected to be received discounted at current interest rates for new instruments with similar credit risk and remaining maturity. Cash and cash equivalents are carried at amortized cost, which approximates current fair value, refer to Note 5. Mandatory cash balances with the CBRF and other financial assets are also carried at amortized cost, which approximates current fair value.

As at 30 June 2018 fair value of loans and advances to customers, due from other banks and other financial assets are categorized in level 3 of fair value hierarchy and approximates its carrying value (31 December 2017: approximates its carrying value). Refer to Notes 5, 6 and 8. Fair values for these financial assets are determined using valuation techniques (such as replication or discounted cash flows) for which significant inputs are unobservable or cannot be corroborated by market-based observations.

Liabilities carried at amortized cost. The fair value of floating rate instruments is normally their carrying amount. The estimated fair value of fixed interest rate instruments with stated maturity, for which a quoted market price is not available, was estimated based on expected cash flows discounted at current interest rates for new instruments with similar credit risk and remaining maturity. The fair value of liabilities repayable on demand or after a notice period (“demandable liabilities”) is estimated as the amount payable on demand, discounted from the first date that the amount could be required to be paid. Refer to Notes 9 and 10 for the estimated fair values of due to other banks and customer accounts, respectively. For subordinated debt and other financial liabilities, approximates its carrying value (31 December 2017: approximates its carrying value).


24

14 Fair value of Financial Assets (Continued)

(b) Analysis by fair value hierarchy of financial instruments carried at fair value

For financial instruments carried at fair value, the levels in the fair value hierarchy into which the fair values are categorized in the table below (Level 1 reflects the quoted price in an active market; Level 2 reflects valuation technique with inputs observable in markets):


30 June 2018 (Unaudited) 31 December 2017

Level 1 Level 2 Level 1 Level 2

FINANCIAL ASSETS Debt financial instruments measured at

fair value through other comprehensive income (31 December 2017: Available-for-sale investments):

- Federal loan bonds - - 2 255 554 - Derivatives and other financial assets

carried at fair value - Cross currency interest rate swaps - 303 828 - 11 457 420 - Foreign exchange forwards - 94 136 - 89 539 - Foreign exchange swaps - 54 515 - 85 315 - Foreign exchange spots - 44 832 - 748 - Foreign exchange options - 3 - 807 - Interest rate swaps - - - 13 746

TOTAL FINANCIAL ASSETS CARRIED AT FAIR VALUE

-

497 314

2 255 554

11 647 575

FINANCIAL LIABILITIES Derivatives and other financial liabilities

carried at fair value

- Cross currency interest rate swaps - (184 750) - (11 353 712) - Foreign exchange forwards - (232 463) - (11 333) - Foreign exchange swaps - (21 863) - (3 873) - Foreign exchange spots - (34 279) - (729) - Foreign exchange options - (3) - (807) - Interest rate swaps - (38 619) - (95 929) - Market risk provision - (277) - (194)

TOTAL FINANCIAL LIABILITIES CARRIED AT FAIR VALUE - (512 254) - (11 466 577)

(c) Methods and assumptions for valuation of financial assets and liabilities included in Level 2 of the fair valuation hierarchy

The Bank uses discounted cash flow valuation techniques to determine the fair value of derivative financial instruments that are not traded in an active market. Where valuation techniques (for example, models) are used to determine fair values, they are validated and periodically reviewed by qualified personnel independent of the area that created them. All models are certified before they are used, and models are calibrated to ensure that outputs reflect actual data and comparative market prices. These models use observable market inputs, therefore, derivative financial instruments are reported as level 2.

Exposure to credit risk associated with derivative financial instruments is primarily managed by entering into contracts with the Parent bank, which substantially mitigates the exposure on the Bank’s level.


25

15 Related Party Transactions

Parties are generally considered to be related if the parties are under common control, or one party has the ability to control the other party or can exercise significant influence over the other party in making financial or operational decisions. In considering each possible related party relationship, attention is directed to the substance of the relationship, not merely the legal form. Entities of BNP Paribas Bank are presented by the branches and subsidiaries of BNP Paribas S.A. (Parent Bank).

As at 30 June 2018 and 31 December 2017, the outstanding balances with related parties were as follows:



Parent Bank

Entities of BNP Paribas Bank

Parent bank Entities of BNP Paribas

Bank

Cash and cash equivalents (contractual interest rate: 30 June 2018: 0.00% - 7.00%, 2017: 0.00% - 7.25%)

5 704 657

23 795 1 154 644 22 616 Due from other banks (contractual interest

rate: 30 June 2018: 6.08% - 7.22%, 2017: 2.19% - 8.60%)

7 228 098

- 3 600 886 - Loans to customers (contractual interest rate:

30 June 2018: 8.66% - 22.14%, 2017: 9.03% - 22.14%)

-

4 410 674 - 3 687 361 Positive fair value of foreign exchange

derivatives

44 625

- 50 818 - Negative fair value of foreign exchange

derivatives

(26 594)

- (293) - Positive fair value of interest rate and currency

swaps

303 847

- 90 592 - Negative fair value of interest rate and

currency swaps

(38 619)

- (11 449 641) - Positive fair value of options 3 - 807 - Other financial assets 256 990 - 127 021 349 Other non-financial assets - - - 229 Due to other banks (contractual interest rate:

30 June 2018: -0.38% - 5.75%, 2017: 0.00% - 6.00%)

3 802 052

1 390 635 6 072 419 890 443 Customer Accounts (contractual interest rate:

30 June 2018: 0.00% - 8.05%, 2017: 0.00% - 9.10%)

-

1 044 368 - 462 006 Subordinated loan (contractual interest rate: 30

June 2018: 4.08% - 6.16%, 2017: 3.44% - 5.19%)

6 136 092

- 5 580 326 - Other financial liabilities 69 114 20 364 66 462 25 905

The income and expense items with related parties for six month periods ended 30 June 2018 and 30 June 2017 were, as follows:

Six month period ended 30

June 2018 (Unaudited) Six month period ended 30

June 2017 (Unaudited)


Parent Bank

Entities of BNP Paribas

Bank

Parent Bank Entities of BNP Paribas

Bank

Interest income 167 337 238 889 647 177 231 281 Interest expense (190 399) (18 038) (247 373) (16 297) Net result from trading in foreign currencies

and financial derivatives

(505 027)

586

1 620 569

3 036 Fee and commission income 371 969 4 757 126 120 4 364 Fee and commission expense (635) (3 163) (21 867) (5 046) Administrative and other operating expenses (71 339) (6 100) (26 272) (10 778)


26

15 Related Party Transactions (Continued)

As at 30 June 2018 and 31 December 2017, other rights and obligations with related parties were, as follows:



Parent Bank

Entities of BNP

Paribas Bank

Parent Bank Entities of BNP Paribas

Bank

Guarantees issued by the Bank at the end of reporting period 515 132 231 290 418 768 1 032 058

Guarantees received by the Bank in course of lending operations at the end of reporting period 5 960 499 432 283 48 265 408 1 316 133

The remuneration paid to key management for reporting periods ended 30 June 2018 and 30 June 2017 were, as follows:


Six month period ended 30 June

2018 (Unaudited)

Six month period ended 30 June

2017 (Unaudited)

Wages and salaries 22 450 18 413 Non-monetary benefits 2 718 3 586 Performance bonuses 8 494 7 117

Share based payments to key management during six month period ended 30 June 2018 and 30 June 2017 are included in performance bonus amount.

As at 30 June 2018 and 31 December 2017 the Bank’s immediate and ultimate parent company was BNP Paribas S.A.

16 Subsequent events

Bank initiated the procedure of advance subordinated loan settlement for the purposes of more effective capital management.

On 16th of August 2018 Bank received approval of advance subordinated loan settlement from the Central bank of Russian Federation. This approval is valid for three months from the date of receipt. Bank has intention to settle the subordinated loan in of November 2018. At the same time commitment of advance settlement is not binding.

0. KucherovaCertified auditorAO «PricewaterhouseCoopers Audit»

27 August 2018

30 (thirty) pages are numbered, bound and sealed.

bnp paribas bank jsc condensed interim international ... · in july 2018 at bank’s request...

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