MARFIN EGNATIA BANK S.A. - Irish Stock Exchange

MARFIN EGNATIA BANK S.A.
(incorporated with limited liability in the Hellenic Republic)
€3 billion Residential Mortgage Loans Covered Bond Programme
This Base Prospectus (the "Base Prospectus") has been approved by the Irish Financial Services
Regulatory Authority, as competent authority under the Prospectus Directive 2003/71/EC (the
"Prospectus Directive"). The Irish Financial Services Regulatory Authority (the "Financial Regulator")
only approves this Base Prospectus as meeting the requirements imposed under Irish and EU law pursuant
to the Prospectus Directive. Such approval relates only to covered bonds (the "Covered Bonds") issued
under the €3 billion Residential Mortgage Loans Covered Bond Programme (the "Programme")
described in this Base Prospectus which are to be admitted to trading on the regulated market of the Irish
Stock Exchange or other regulated markets for the purposes of Directive 2004/39/EC or which are to be
offered to the public in any Member State of the European Economic Area. Application has been made to
the Irish Stock Exchange for the Covered Bonds issued under the Programme described in this Base
Prospectus during the period of twelve months after the date hereof to be admitted to the Official List and
trading on its regulated market. The regulated market of the Irish Stock Exchange is a Regulated Market
for the purposes of Directive 2004/39/EC. The Programme also permits Covered Bonds to be issued on
the basis that they will not be admitted to listing, trading and/or quotation by any competent authority,
stock exchange and/or quotation system or to be admitted to listing, trading and/or quotation by such
other or further competent authorities, stock exchanges and/or quotation systems as may be agreed with
the Issuer. This document constitutes a base prospectus for the purposes of Article 5.4 of the Prospectus
Directive.
Pursuant to the Programme Marfin Egnatia Bank S.A. (the "Issuer") may from time to time issue
Covered Bonds in bearer or registered form denominated in any currency agreed between the Issuer and
the relevant Dealer. The maximum aggregate nominal amount of all Covered Bonds from time to time
outstanding under the Programme will not exceed €3,000,000,000 (or its equivalent in other currencies
calculated as described herein and in accordance with the provisions of the Dealer Agreement) unless
increased from time to time in accordance with the relevant provisions of the Dealer Agreement.
The Covered Bonds may be issued on a continuing basis to one or more of the Dealers specified under
"Principal Parties" and any additional Dealer appointed under the Programme from time to time, which
appointment may be for a specific issue or on an ongoing basis (each a "Dealer" and together the
"Dealers"). References in this Base Prospectus to the "relevant Dealer" shall, in the case of an issue of
Covered Bonds being (or intended to be) subscribed by more than one Dealer, be to the lead manager of
such issue and, in relation to an issue of Covered Bonds subscribed by one Dealer, be to such Dealer.
The payment of all amounts due in respect of the Covered Bonds will constitute direct and unconditional
obligations of the Issuer, in addition having recourse to the Cover Pool.
The Covered Bonds issued under the Programme are expected on issue to be assigned an "Aaa" rating by
Moody's Investors Service Limited ("Moody's") and an "AAA" rating by Fitch Ratings Limited
("Fitch"). A credit rating is not a recommendation to buy, sell or hold securities and may be subject to
suspension, change or withdrawal at any time by the assigning rating organisation.
Investing in Covered Bonds issued under the Programme involves certain risks. The principal risk
factors that may affect the ability of the Issuer to fulfil its obligations in respect of the Covered
Bonds are discussed under "Risk Factors" below.
Barclays Capital
Barclays Capital
Arrangers
Dealers
Deutsche Bank
Deutsche Bank
The date of this base prospectus is 17 November 2008.

Responsibility Statements
The Issuer accepts responsibility for the information contained in this document. To the best of the
knowledge and belief of the Issuer the information contained in this document is in accordance with the
facts and does not omit anything likely to affect the import of such information. The Issuer further
confirms that this Base Prospectus contains all information which is material in the context of the issue of
the Covered Bonds, that such information contained in this document is true and accurate in all material
respects and is not misleading, that the opinions and the intentions expressed in it are honestly held by it
and that there are no other facts the omission of which makes this Base Prospectus as a whole or any of
such information or the expression of any such opinions or intentions misleading in any material respect
and all proper enquiries have been made to ascertain and to verify the foregoing. The Issuer accepts
responsibility accordingly and the Issuer has confirmed to the Dealers that the Issuer accepts such
responsibility.
Representations about the Covered Bonds
No person has been authorised to give any information or to make any representation not contained in or
inconsistent with this Base Prospectus or any other document entered into in relation to the Programme
and if given or made, such information or representation should not be relied upon as having been
authorised by the Issuer or any Dealer.
Neither the Dealers, the Trustee, the Agents, the Transaction Account Bank nor any of their respective
affiliates have authorised the whole or any part of this Base Prospectus and none of them makes any
representation or warranty or accepts any responsibility as to the accuracy or completeness of the
information contained in this Base Prospectus. Neither the delivery of this Base Prospectus or any Final
Terms nor the offering, sale or delivery of any Covered Bond shall, in any circumstances, create any
implication that the information contained in this Base Prospectus is true subsequent to the date hereof or
the date upon which this Base Prospectus has been most recently supplemented or that there has been no
adverse change, or any event reasonably likely to involve any adverse change, in the prospects or
financial or trading position of the Issuer since the date thereof or, if later, the date upon which this Base
Prospectus has been most recently supplemented, or that any other information supplied in connection
with the Programme is correct at any time subsequent to the date on which it is supplied or, if different,
the date indicated in the document containing the same.
Each Series of Covered Bonds may be issued without the prior consent of the Covered Bondholders of
any outstanding Covered Bonds subject to the terms set out herein under "Terms and Conditions of the
Covered Bonds" (the "Conditions") as amended and/or supplemented by a document specific to such
Series called the final terms (the "Final Terms"). This Base Prospectus must be read and construed
together with any supplements hereto and with any information incorporated by reference herein and, in
relation to any Series of Covered Bonds which is the subject of Final Terms, must be read and construed
together with the relevant Final Terms. All Covered Bonds will rank pari passu and rateably without any
preference or priority among themselves, irrespective of their Series, save with regard to the timing and
amount of the repayment of principal and the timing and amount of interest payable.
If you are in any doubt about the contents of this document you should consult your stockbroker, bank
manager, solicitor, accountant or other financial adviser. It should be remembered that the price of
securities and the income from them can go down as well as up.
Selling Restrictions Summary
The distribution of this Base Prospectus and any Final Terms and the offering, sale and delivery of the
Covered Bonds in certain jurisdictions may be restricted by law. Persons into whose possession this Base
Prospectus or any Final Terms comes are required by the Issuer, and each of the Dealers to inform
themselves about and to observe any such restrictions. For a description of certain restrictions on offers,
sales and deliveries of Covered Bonds and on the distribution of this Base Prospectus or any Final Terms
and other offering material relating to the Covered Bonds, see "Subscription and Sale". In particular,
Covered Bonds have not been and will not be registered under the United States Securities Act of 1933
(as amended) (the "Securities Act") and are subject to U.S. tax law requirements. Subject to certain
exceptions, Covered Bonds may not be offered, sold or delivered within the United States or to U.S.
persons. Covered Bonds may be offered and sold outside the United States in reliance on Regulation S
under the Securities Act ("Regulation S").
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Neither this Base Prospectus nor any Final Terms constitutes an offer or an invitation to subscribe for or
purchase any Covered Bonds and should not be considered as a recommendation by the Issuer, the
Dealers, the Trustee, the Agents, the Transaction Account Bank or any of them that any recipient of this
Base Prospectus or any Final Terms should subscribe for or purchase any Covered Bonds. Each recipient
of this Base Prospectus or any Final Terms shall be taken to have made its own investigation and
appraisal of the condition (financial or otherwise) of the Issuer.
This Base Prospectus has been prepared on the basis that any offer of Covered Bonds in any Member
State of the European Economic Area which has implemented the Prospectus Directive (each, a
"Relevant Member State") will be made pursuant to an exemption under the Prospectus Directive, as
implemented in that Relevant Member State, from the requirement to publish a prospectus for offers of
Covered Bonds. Accordingly any person making or intending to make an offer in that Relevant Member
State of Covered Bonds which are the subject of an offering or placement contemplated in this Base
Prospectus as completed by Final Terms in relation to the offer of those Covered Bonds may only do so
in circumstances in which no obligation arises for the Issuer or any Dealer to publish a prospectus
pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the
Prospectus Directive, in each case, in relation to such offer. Neither the Issuer nor any Dealer has
authorised, nor do they authorise, the making of any offer of Covered Bonds in circumstances in which an
obligation arises for the Issuer or any Dealer to publish or supplement a prospectus for such offer.
Interpretation
In this Base Prospectus, unless otherwise specified, references to a "Member State" are references to a
member state of the European Economic Area, references to "€", "EUR" or "euro" are to the single
currency introduced at the start of the third stage of European Economic and Monetary Union ("EMU")
pursuant to the Treaty establishing the European Community.
In this Base Prospectus, all references to "Greece" or to the "Greek State" are to the Hellenic Republic.
Terms used in this Base Prospectus, unless otherwise indicated, have the meanings set out in this Base
Prospectus. An index of defined terms used in this Base Prospectus appears on pages 167 to 169.
Language
The language of this Base Prospectus is English. Certain legislative references and technical terms have
been cited in their original language in order that the correct technical meaning may be ascribed to them
under applicable law.
Stabilisation
In connection with the issue of any Tranche of Covered Bonds, the Dealer(s) named as the stabilising
manager(s) (the "Stabilising Manager(s)") (or persons acting on behalf of any Stabilising Manager(s)) in
the applicable Final Terms may over allot Covered Bonds or effect transactions with a view to supporting
the market price of the Covered Bonds at a level higher than that which might otherwise prevail.
However, there is no obligation on the Stabilising Manager(s) (or persons acting on behalf of a Stabilising
Manager) to undertake stabilisation action. Any stabilisation action may begin on or after the date on
which adequate public disclosure of the terms of the offer of the relevant Tranche of Covered Bonds is
made and, if begun, may be ended at any time, but it must end no later than the earlier of 30 days after the
issue date of the relevant Tranche of Covered Bonds and 60 days after the date of the allotment of the
relevant Tranche of Covered Bonds. Such stabilisation must be conducted by the relevant Stabilising
Manager(s) (or person(s) acting on behalf of any Stabilising Manager(s)) in accordance with all
applicable laws and rules. Any loss or profit sustained as a consequence of any such over-allotment or
stabilisation shall, as against the Issuer, be for the account of the Stabilising Manager(s).
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CONTENTS
Page
PRINCIPAL PARTIES .................................................................................... 4
GENERAL DESCRIPTION OF THE PROGRAMME .............................................. 5
PRINCIPAL FEATURES OF THE COVERED BONDS ........................................ 5
STRUCTURE OVERVIEW........................................................................... 11
CREATION AND ADMINISTRATION OF THE COVER POOL............................ 12
ACCOUNTS AND CASH FLOW STRUCTURE ................................................ 19
DOCUMENTS INCORPORATED BY REFERENCE..............................................26
RISK FACTORS ...........................................................................................27
FORM OF THE COVERED BONDS..................................................................43
TERMS AND CONDITIONS OF THE COVERED BONDS .....................................46
FORM OF FINAL TERMS ..............................................................................80
USE OF PROCEEDS .....................................................................................95
SUMMARY OF THE GREEK COVERED BOND LEGISLATION.............................96
INSOLVENCY OF THE ISSUER ......................................................................99
DESCRIPTION OF THE ISSUER.................................................................... 100
THE BANKING SECTOR IN GREECE ............................................................ 127
ISSUER'S STANDARD BUSINESS PRACTICES FOR LOAN ASSETS .................... 136
THE MORTGAGE AND HOUSING MARKET IN GREECE.................................. 140
DESCRIPTION OF PRINCIPAL DOCUMENTS ................................................. 146
TAXATION............................................................................................... 160
SUBSCRIPTION AND SALE ......................................................................... 162
GENERAL INFORMATION .......................................................................... 165
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PRINCIPAL PARTIES
Issuer:
Servicer:
Arrangers:
Dealers:
Asset Monitor:
Trustee:
Transaction Account
Bank:
Principal Paying Agent:
Registrar:
Calculation Agent and
Transfer Agent:
Credit Facility Provider:
Hedging Counterparties:
Listing Agent:
Rating Agencies:
Marfin Egnatia Bank S.A. as issuer of the Covered Bonds (the "Issuer").
Marfin Egnatia Bank S.A. as servicer (the "Servicer") will perform
certain servicing, cash management, calculation, notification and reporting
services in accordance with the Servicing Deed and the Greek Covered
Bond Legislation.
Deutsche Bank AG, London Branch and Barclays Capital, the Investment
Banking Division of Barclays Bank PLC (the "Arrangers").
Deutsche Bank Aktiengesellschaft and Barclays Bank PLC and any other
dealers appointed from time to time in accordance with the Dealer
Agreement (the "Dealers").
PricewaterhouseCoopers S.A. (the "Asset Monitor") will perform certain
calculations and conduct certain tests required by the Transaction
Documents and the Greek Covered Bond Legislation.
The Bank of New York Mellon (International) Limited (the "Trustee")
will act as the trustee in accordance with paragraph 2 of Article 91 of the
Greek Covered Bond Legislation and the Trust Deed. The Trustee will
hold the security granted pursuant to the Security Deed and the Statutory
Pledge on trust for itself and the other Secured Creditors.
The Bank of New York Mellon, acting through its London Branch (the
"Transaction Account Bank") as the bank at which the Transaction
Account is held.
The Bank of New York Mellon, acting through its London Branch (the
"Principal Paying Agent") will act as principal paying agent pursuant to
the Agency Agreement.
The Bank of New York (Luxembourg) S.A. (the "Registrar") will act as
registrar pursuant to the Agency Agreement.
The Bank of New York Mellon, acting through its London Branch (the
"Calculation Agent" and "Transfer Agent") will act as calculation agent
and transfer agent respectively pursuant to the Agency Agreement.
Marfin Popular Bank Public Co Ltd will provide a credit facility to the
Issuer pursuant to the terms of the Credit Facility Agreement (the "Credit
Facility Provider").
Each counterparty (each, a "Hedging Counterparty" and together, the
"Hedging Counterparties") that, from time to time, will enter into
Hedging Agreements with the Issuer. Each Hedging Counterparty will be
required to satisfy the conditions of Art. I.2(b)(bb) of the Secondary
Covered Bond Legislation.
The Bank of New York Mellon, acting through its London Branch (the
"Listing Agent") will act as listing agent for the Covered Bonds issued
under the Programme.
Fitch Ratings Limited ("Fitch Ratings") and Moody's Investors Service
Limited ("Moody's").
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GENERAL DESCRIPTION OF THE PROGRAMME
The following overview does not purport to be complete and is taken from, and is qualified in its entirety
by, the remainder of this Base Prospectus and, in relation to the Terms and Conditions of any particular
Series or Tranche of Covered Bonds, the applicable Final Terms. The Issuer and any relevant Dealer
may agree that Covered Bonds shall be issued in a form other than that contemplated in the Conditions,
in which event, if appropriate, a supplement to the Base Prospectus will be published.
PRINCIPAL FEATURES OF THE COVERED BONDS
Description:
Programme Amount:
Issuance in Series:
Conditions Precedent to
the Issuance of a new
Series or Tranche of
Covered Bonds:
Final Terms:
Proceeds of the Issue of
Covered Bonds:
Form of Covered Bonds:
Issue Dates:
Issue Price:
Specified Currency:
Marfin Egnatia Bank S.A. €3,000,000,000 Residential Mortgage Loans
Covered Bond Programme.
Up to €3,000,000,000 (or its equivalent in other currencies determined as
described in the Dealer Agreement) outstanding at any time. The Issuer
may increase the amount of the Programme in accordance with the terms
of the Dealer Agreement.
Covered Bonds will be issued in Series each subject to the terms set out in
the relevant Final Terms. Save in respect of the first issue, Covered
Bonds issued under the Programme will either be fungible with an
existing Series of Covered Bonds or have different terms (in which case
they will constitute a new Series). The Issuer may issue Covered Bonds
without the prior consent of the holders of any outstanding Covered Bonds
but subject to certain conditions.
It is a condition precedent to the issuance of a new Series or Tranche of
Covered Bonds that (i) there is no Issuer Event which is continuing and
that such issuance would not cause an Issuer Event, (ii) the Statutory Tests
are satisfied and that such issuance would not cause a breach of the
Statutory Tests, (iii) the Rating Agencies have confirmed the then current
rating of all Covered Bonds outstanding under the Programme and that the
ratings of such Covered Bonds will not be adversely affected or
withdrawn as a result of such issuance, (iv) such issuance has been
approved by the Bank of Greece in accordance with paragraph II.3 of the
Secondary Covered Bond Legislation and (v) if applicable, in respect of
any Series or Tranche, a Hedging Agreement is entered into.
Final Terms will be issued and published for each Series or Tranche
detailing certain provisions which, for the purposes of that Series only,
supplements and/or amends the Conditions and the Base Prospectus and
must be read in conjunction with the Conditions and the Base Prospectus.
The gross proceeds from each issue of Covered Bonds will be used by the
Issuer to fund its general corporate purposes.
The Covered Bonds will be issued in bearer or registered form. Registered
Covered Bonds will not be exchangeable for bearer Covered Bonds and
bearer Covered Bonds will not be exchangeable for registered Covered
Bonds.
The date of issue of a Series or Tranche as specified in the relevant Final
Terms (each, the "Issue Date" in relation to such Series or Tranche).
Covered Bonds of each Series may be issued at par or at a premium or
discount to par on a fully paid basis or partly paid basis (in each case, the
"Issue Price" for such Series or Tranche) as specified in the relevant Final
Terms in respect of such Series.
Subject to any applicable legal or regulatory restrictions, the currency or
currencies which a Series is denominated in, as may be agreed from time
to time by the Issuer and the relevant Dealer(s) (as set out in the
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applicable Final Terms) (each, the "Specified Currency" in relation to
such Series or Tranche).
Denominations:
Fixed Rate Covered
Bonds:
Floating Rate Covered
Bonds:
The Covered Bonds will be issued in such denominations as may be
agreed between the Issuer and the relevant Dealer(s) and set out in the
applicable Final Terms save that, except in certain limited circumstances,
the minimum denomination of each Covered Bond will be €50,000 (or, if
the Covered Bonds are denominated in a currency other than Euro, the
equivalent amount in such currency) or such other higher amount as is
required from time to time by the relevant central bank (or equivalent
body) or any laws or regulations applicable to the relevant Specified
Currency.
Covered Bonds which bear interest at a fixed rate, payable on such date or
dates as may be agreed between the Issuer and the relevant Dealer(s) and
on redemption and will be calculated on the basis of the Day Count
Fraction agreed between the Issuer and the relevant Dealer(s) (as set out in
the applicable Final Terms) (the "Fixed Rate Covered Bonds").
Covered Bonds which bear interest at a rate determined:
(a)
on the same basis as the floating rate under a notional interest rate
swap transaction in the relevant Specified Currency governed by
an agreement incorporating the ISDA Definitions; or
(b)
(c)
on the basis of a reference rate appearing on the agreed screen
page of a commercial quotation service; or
on such other basis as may be agreed between the Issuer and the
relevant Dealer(s),
as set out in the applicable Final Terms (the "Floating Rate Covered
Bonds").
The margin (if any) relating to such floating rate (the "Margin") will be
agreed between the Issuer and the relevant Dealer(s) for each issue of
Floating Rate Covered Bonds, as set out in the applicable Final Terms.
Index Linked Interest
Covered Bonds:
Dual Currency Interest
Covered Bonds:
Variable Interest Covered
Bonds:
Covered Bonds in respect of which payments of interest are calculated by
reference to such index and/or formula or to changes in the prices of
securities or commodities or to such other factors as the Issuer and the
relevant Dealer(s) may agree, as set out in the applicable Final Terms (the
"Index Linked Interest Covered Bonds").
Covered Bonds in respect of which payments of interest, whether at
maturity or otherwise, will be made in such currencies, and based on such
rates of exchange, as the Issuer and the relevant Dealer(s) may agree, as
set out in the applicable Final Terms (the "Dual Currency Interest
Covered Bonds").
Index Linked Interest Covered Bonds, Dual Currency Interest Covered
Bonds and other Covered Bonds (excluding Floating Rate Covered
Bonds) where the Interest Rate is variable (the "Variable Interest
Covered Bonds").
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Other provisions in
relation to Floating Rate
Covered Bonds and
Variable Interest Covered
Bonds:
Zero Coupon Covered
Bonds:
Partly Paid Covered
Bonds:
Payments on the Covered
Bonds:
Interest Payment Dates:
Taxation:
Ranking of the Covered
Bonds:
Status of the Covered
Bonds:
Availability of Cover Pool
for the Covered
Bondholders:
Floating Rate Covered Bonds and Variable Interest Covered Bonds may
have a Maximum Interest Rate, a Minimum Interest Rate or both (as
indicated in the applicable Final Terms). Interest on Floating Rate
Covered Bonds and Variable Interest Covered Bonds in respect of each
Interest Period, as agreed prior to issue by the Issuer and the relevant
Dealer(s), will be payable on such Interest Payment Dates, and will be
calculated on the basis of such Day Count Fraction, in each case as may
be agreed between the Issuer and the relevant Dealer(s).
Covered Bonds bearing no interest which are offered and sold at a
discount to their nominal amount unless otherwise specified in the
applicable Final Terms (the "Zero Coupon Covered Bonds").
Covered Bonds may be issued on a partly paid basis in which case interest
will accrue on the paid up amount of such Covered Bonds or on such
other basis as may be agreed between the Issuer and the relevant
Dealer(s), as set out in the applicable Final Terms (the "Partly Paid
Covered Bonds").
Payments on the Covered Bonds will be direct and unconditional
obligations of the Issuer. On each Interest Payment Date the Issuer will
pay amounts then due and payable under the Covered Bonds.
In relation to any Series of Covered Bonds, the Interest Payment Date
stated in the applicable Final Terms (as the case may be).
All payments of principal, interest and other proceeds (if any) on the
Covered Bonds will be made free and clear of any deduction for Greek
withholding or substitute taxes, unless the Issuer or any intermediary
involved in the collection of interest and other amounts on the Covered
Bonds is required by applicable law to make such a withholding or
deduction. In the event that such withholding, or deduction is required by
law, the Issuer will not be required to pay any additional amounts in
respect of such withholding or deduction except as required by Condition
10.1(Gross up).
The Covered Bonds of all Series will rank pari passu and pro rata without
any preference or priority among themselves for all purposes (save for the
timing of the repayment of principal and the timing and amount of interest
payable).
The Covered Bonds are issued on an unconditional basis and in
accordance with Article 91 of Law No. 3601/2007 (published in the
government gazette No 178/A/1-8-2007), as amended by Article 48 of
Law No. 3693/2008 published in the government gazette No 174/A/25-8-
2008 ("Article 91") and the Act of the Governor of the Bank of Greece
No. 2598/2007 (the "Secondary Covered Bond Legislation" and,
together with Article 91, the "Greek Covered Bond Legislation"). The
Covered Bonds are backed by assets forming part of the Cover Pool
which, to the extent such assets are governed by Greek law, are subject to
a statutory pledge pursuant to paragraph 4 of Article 91 (the "Statutory
Pledge").
In accordance with the Greek Covered Bond Legislation, by virtue of the
Transaction Documents and pursuant to any Registration Statement, the
Cover Pool will be available following an Issuer Event which is
continuing or the delivery of a Notice of Default, to satisfy the obligations
of the Issuer to the Covered Bondholders and the other Secured Creditors
in priority to the Issuer's obligations to any other creditors, until the
repayment in full of the Secured Creditors.
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English Law Security
Deed:
Cross collateralisation and
Recourse:
Final Maturity Date and
Extended Final Maturity
Date:
The Issuer shall assign its rights arising under the Transaction Account,
the Authorised Investments (to the extent not subject to the Statutory
Pledge) and any Transaction Document governed by English law to the
Trustee (for itself and on behalf of the Secured Creditors) in accordance
with the Security Deed.
Pursuant to Article 91 and in accordance with the Transaction Documents,
the Cover Pool Assets form a single portfolio, irrespective of their date of
assignment to the Cover Pool and shall be subject to the Statutory Pledge
in favour of all the Secured Creditors irrespective of the Issue Date of the
relevant Series.
The final maturity date for each Series will be specified in the relevant
Final Terms as agreed between the Issuer and the relevant Dealer(s) (the
"Final Maturity Date"). Unless specified otherwise in the Final Terms or
redeemed early, the Covered Bonds of each Series will be redeemed at
their Principal Amount Outstanding on the relevant Final Maturity Date.
The applicable Final Terms may provide that the Issuer's obligations
under the relevant Covered Bonds to pay the Principal Amount
Outstanding on the relevant Final Maturity Date may be deferred past the
Final Maturity Date until the extended final maturity date (as specified in
the Final Terms) (the "Extended Final Maturity Date"). In such case,
such deferral will occur automatically if the Issuer fails to pay any amount
representing the amount due on the Final Maturity Date as set out in the
Final Terms (the "Final Redemption Amount") in respect of the relevant
Series of Covered Bonds provided that, any amount representing the Final
Redemption Amount due and remaining unpaid on the Final Maturity
Date may be paid by the Issuer on any Interest Payment Date thereafter up
to (and including) the relevant Extended Final Maturity Date. Interest will
continue to accrue and be payable on any unpaid amounts on each Interest
Payment Date up to the Extended Final Maturity Date in accordance with
the Conditions and the Issuer will make payments on each relevant
Interest Payment Date and Extended Final Maturity Date.
If the Covered Bonds are not redeemed in full on the relevant Final
Maturity Date or where the Covered Bonds are subject to an Extended
Final Maturity Date, on the Extended Final Maturity Date, then the
Trustee may or shall, as the case may be, serve a Notice of Default on the
Issuer pursuant to the Conditions. Following the service of a Notice of
Default: (a) any Covered Bond which has not been redeemed on or prior
to its Final Maturity Date or, if applicable, its Extended Final Maturity
Date shall remain outstanding at its Principal Amount Outstanding, until
the date on which such Covered Bond is cancelled or redeemed; and (b)
interest shall continue to accrue on any Covered Bond which has not been
redeemed on its Final Maturity Date or, if applicable, Extended Final
Maturity Date and any payments of interest or principal in respect of such
Covered Bond shall be made in accordance with the Post-Event of Default
Priority of Payments until the date on which such Covered Bond is
cancelled or redeemed.
Optional Redemption for
Taxation Reasons:
The Covered Bonds may be redeemed at the option of the Issuer in whole,
but not in part, at any time (if the relevant Covered Bond is not a Floating
Rate Covered Bond or a Variable Interest Covered Bond) or on any
Interest Payment Date (if the relevant Covered Bond is a Floating Rate
Covered Bond or a Variable Interest Covered Bond):
(a)
on giving not less than 30 nor more than 60 days' notice to the
Trustee and the Covered Bondholders (which notice shall be
irrevocable); and
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(b)
if the Issuer satisfies the Trustee immediately before the giving of
such notice that on the occasion of the next date for payment of
interest on the relevant Covered Bonds, that the Issuer is or would
be required to pay additional amounts as provided or referred to
in Condition 10.1 (Gross up),
provided, however, that the Issuer has sufficient funds to discharge any
amounts due in priority to the Covered Bondholders in the relevant
Payments Priorities.
Redemption at Option of
the Issuer:
Redemption at Option of
the Covered Bondholders:
Events of Default:
The Final Terms may specify that there is an "Issuer Call" in relation to a
Series of Covered Bonds. In which case on any Optional Redemption
Date the Issuer may redeem some or all of the outstanding Covered Bonds
of that Series at the Optional Redemption Amount(s) together with
interest accrued thereon, provided that the Issuer has sufficient funds to
discharge any amounts due in priority to the Covered Bondholders in the
relevant Payments Priorities.
The Final Terms may specify that there is an "Investor Put" in relation to a
Series of Covered Bonds. In which case a Covered Bondholder may give
an irrevocable put notice to the Issuer not less than 30 nor more than 60
days' prior to the Optional Redemption Date (or such other period
specified in the applicable Final Terms). The Issuer will then redeem such
Covered Bonds on the Optional Redemption Date at the relevant Optional
Redemption Amount together with accrued interest thereon, provided that
the Issuer has sufficient funds to discharge any amounts due in priority to
the Covered Bondholders in the relevant Payments Priorities.
It will be an Event of Default (an "Event of Default") in respect of the
Covered Bonds if:
(a)
(b)
there is a failure to pay any amount of principal or interest in
respect of the Covered Bonds within seven days of the due date
for payment of such; or
following the occurrence of an Issuer Insolvency Event, the
Trustee is notified by, or on behalf of, the Servicer of the
occurrence of a Cover Event.
If an Event of Default occurs and is continuing, the Trustee may, or may
be required to, deliver a Notice of Default which will cause the Covered
Bonds of each Series to become immediately due and payable.
Ratings:
Listing:
Each Series issued under the Programme will be assigned a rating by each
of the Rating Agencies.
Application has been made to the Irish Stock Exchange for the Covered
Bonds issued under the Programme described in this Base Prospectus
during the period of twelve months after the date hereof to be admitted to
the Official List and trading on its regulated market.
However, the Issuer and each relevant Dealer may agree to make an
application to list Series on any other stock exchange as specified in the
relevant Final Terms. Any Series may also be issued on an unlisted basis.
Clearing Systems:
Selling Restrictions:
Euroclear and/or Clearstream, Luxembourg and/or, in relation to any
Series of Covered Bonds, any other clearing system as may be specified in
the relevant Final Terms.
There are restrictions on the offer, sale and transfer of the Covered Bonds
in the United States and the European Economic Area (including the
United Kingdom and the Hellenic Republic). Other restrictions may apply
- 9 -

in connection with the offering and sale of a particular Tranche or Series
of Covered Bonds. See "Subscription and Sale".
Greek Covered Bond
Legislation:
Provisions of Transaction
Documents:
Governing law:
The Covered Bonds will be issued pursuant to the Greek Covered Bond
Legislation.
The Covered Bondholders are bound by and are deemed to have notice of
all provisions of the Transaction Documents applicable to them.
The Transaction Documents will be governed by, and construed in
accordance with, English Law.
The Conditions will be governed by, and construed in accordance with,
English law.
- 10 -

STRUCTURE OVERVIEW
Set forth below is a diagram of the general structure of the transaction.
MARFIN POPULAR BANK
Credit Facility Provider
Asset Monitor
MARFIN EGNATIA
BANK
Covered Bond Swap
Issuer/Servicer
Provider
Credit
Facility
Hedging Agreements
COVER
POOL
Monitors
Interest Rate Swap
Cover Pool
Provider
Covered Bonds
Covered Bonds
Proceeds
Covered Bond Holders/
Trustee
- 11 -

CREATION AND ADMINISTRATION OF THE COVER POOL
The Cover Pool:
Pursuant to the Greek Covered Bond Legislation the following, including
any cash flows deriving therefrom, may constitute the cover pool for the
Covered Bonds (together the "Cover Pool" and each a "Cover Pool
Asset"):
(a)
(b)
(c)
(d)
certain eligible assets set out in paragraph 8(b) of Section B of the
Bank of Greece Act No 2588/20-8-2007 "Calculation of Capital
Requirements for Credit Risk according to the Standardised
Approach", including claims deriving from loans and credit
facilities of any nature comprising the aggregate of all principal
sums, interest, costs, charges, expenses, and other moneys
(including all additional loan advances under such loans and
credit facilities but excluding the levy of Greek Law 128/1975
and any third party expenses) due or owing with respect to such
loan and/or credit facilities provided that such loans and credit
facilities are secured by, inter alia, residential real estate (the
"Loans") together with any mortgages, mortgage prenotations,
guarantee or indemnity payments which may be granted or due,
as the case may be, in connection therewith (the "Related
Security", and together with the Loans the "Loan Assets");
derivative financial instruments, including but not limited to the
Hedging Agreements, satisfying the requirements of paragraph
I.2(b) of the Secondary Covered Bond Legislation;
deposits with credit institutions including but not limited to the
Transaction Account and the Collection Account; and
Marketable Assets.
Registration:
Undertakings of the
Servicer in respect of the
Cover Pool:
Representations and
Warranties of the Issuer:
By virtue of the registration statement(s) (the "Registration Statement")
filed with the Thessaloniki Pledge Registry on or prior to the issue date for
the first series of Covered Bonds, the Issuer shall segregate the Cover Pool
in connection with the issuance of Covered Bonds for the satisfaction of
the rights of the Covered Bondholders from time to time.
Pursuant to the Transaction Documents, the Servicer undertakes to
manage the Cover Pool in the interest of the Secured Creditors and
undertakes to take in a timely manner any actions required in order to
ensure that the servicing of the Loan Assets is conducted in accordance
with the collection policy and recovery procedure applicable to the
Servicer.
Under the Servicing Deed, the Issuer has made and will make certain
representations and warranties regarding itself and the Cover Pool Assets
including, inter alia:
(a)
(b)
(c)
(d)
its status, capacity and authority to enter into the Transaction
Documents and assume the obligations therein;
the legality, validity, binding nature and enforceability of the
obligations assumed by it;
the existence of the Cover Pool Assets, the absence of any lien
attaching to the Cover Pool Assets and the full legal title of the
Issuer to the Cover Pool Assets;
the validity and enforceability against the relevant debtors of the
Cover Pool Assets; and
- 12 -

(e)
the entry into and performance by it of, and the transactions
contemplated by, the Transaction Documents and the granting of
the Security by it do not and will not conflict with: (i) any law or
regulation applicable to it; (ii) its constitutional documents; or
(iii) any agreement or instrument binding upon it or its assets or
constitute a default or termination event (however described)
under any such agreement or instrument (including any breach of
any negative pledge covenants under any such agreement or
instrument).
Eligibility Criteria:
Optional changes to the
Cover Pool:
Each of the Loan Assets to be included in the Cover Pool shall comply
with criteria (the "Eligibility Criteria") as set out in further detail under
"Description of Principal Documents".
The Issuer shall be entitled, subject to filing a Registration Statement so
providing, to:
(a)
(b)
designate further assets (the "Additional Cover Pool Assets")
which comply with the Eligibility Criteria to the Cover Pool for
the purposes of issuing further Series of Covered Bonds and/or
complying with the Statutory Tests and/or maintaining the initial
ratings assigned to the Covered Bonds provided that, with respect
to any Cover Pool Assets so designated after the Issue Date for
the first Series of Covered Bonds which are non-Euro
denominated assets and/or have characteristics other than those
pertaining to the Cover Pool as of the Issue Date for the first
Series of Covered Bonds (the "Initial Assets"), Fitch has
provided confirmation in writing to the Issuer that the ratings on
the Covered Bonds would not be adversely affected by, or
withdrawn as a result of, such designation and Moody's has been
notified of such designation; and
prior to the occurrence of an Issuer Event which is continuing or
would occur as a result of such removal or substitution: (i)
remove Cover Pool Assets from the Cover Pool, provided that the
Issuer has delivered to the Servicer and the Trustee a certification
from a reputable accounting firm of international standing
confirming that the Statutory Tests are satisfied and will not be
breached by such removal, or (ii) substitute Cover Pool Assets
with Additional Cover Pool Assets, provided that, for any
substitution of Additional Cover Pool Assets which are non-Euro
denominated assets and/or have characteristics other than those
pertaining to the Initial Assets, Fitch has provided confirmation in
writing to the Issuer that the ratings on the Covered Bonds would
not be adversely affected by, or withdrawn as a result of such
substitution and Moody's has been notified of such substitution.
Upon any addition (including by way of substitution) to the Cover Pool of
Additional Cover Pool Assets, the Issuer shall deliver to the Trustee a
certificate representing and warranting that the Additional Cover Pool
Assets comply with the Eligibility Criteria (if applicable) and are subject
to the Statutory Pledge (or to the extent not governed by Greek law,
security has been created over them to the satisfaction of the Trustee) and
that no Issuer Insolvency Event or Test Event has occurred.
- 13 -

Disposal of the Loan
Assets:
Following the occurrence of an Issuer Event which is continuing, the
Issuer will be obliged to sell Selected Loans in accordance with the
Servicing Deed. The proceeds from any such sale will be credited to the
Transaction Account and applied in accordance with the relevant
Payments Priorities.
Following the occurrence of an Issuer Event which is continuing, the
Issuer (or if the Issuer so decides, Marfin Popular Bank Public Co Ltd)
shall have the right to prevent the sale of any Loan Asset(s) to third parties
by crediting to the Transaction Account within 10 Business Days an
amount equal to the greater of (i) the market value of all such Loan
Asset(s) determined as the highest bid obtained by the Property
Consultant appointed by the Trustee (acting in good faith) from a third
party for such Loan Asset(s), and (ii) the then Outstanding Principal
Balance plus accrued interest and any arrears of interest on all such Loan
Assets(s).
Following the delivery of a Notice of Default, the Trustee may, after
having been indemnified and/or secured to its satisfaction, direct the
Issuer to dispose of some or all of the Loan Assets and other Cover Pool
Assets as it sees fit.
Statutory Tests:
Pursuant to the Greek Covered Bond Legislation, the Cover Pool is
subject to a number of tests as set out in the Secondary Covered Bond
Legislation (the "Statutory Tests"). The Issuer must ensure that the
following Statutory Tests are satisfied:
(a) Nominal Value Test: the Euro Equivalent of the Principal
Amount Outstanding of all Series of Covered Bonds, together
with all accrued interest thereon, is not greater than the nominal
value of all the Cover Pool Assets (except any Hedging
Agreements) plus accrued interest, as determined in accordance
with the Servicing Deed and by reference to the Asset Percentage.
(b)
(c)
Net Present Value Test: the net present value of the Issuer's
liabilities to the Secured Creditors is less than or equal to the net
present value of (subject to a parallel shift of the yield curve by
200 basis points) the Cover Pool Assets (including any Hedging
Agreements).
Interest Cover Test: the amount of interest due on the Covered
Bonds does not exceed the amount of interest expected to be
received in respect of the Cover Pool and the Marketable Assets
which are to be included for the purpose of valuation in
accordance with paragraph I.6 of the Secondary Covered Bond
Legislation, in each case, for the next 12 months.
For the purposes of calculating the Statutory Tests, the value of any noneuro
denominated assets will be converted into euro on the basis of the
exchange rate published by the European Central Bank as at such date.
For the purposes of calculating each of the Statutory Tests set out above
each Loan will be deemed to have an outstanding principal balance of, and
bear interest on, an amount equal to the lower of:
(i)
(ii)
its Outstanding Principal Balance;
the Indexed Valuation relating to such Loan, in each case
multiplied by 0.80, less the Outstanding Principal Balance of any
first-ranking Loan if such Loan is a second-ranking Loan,
provided that such Loan can never be given a value of less than
- 14 -

zero;
(iii)
(iv)
if such Loan is a first ranking loan with a loan-to-value ("LTV")
at such time greater than 80 per cent., 80 per cent. of the value of
the relevant Property securing such Loan; and
if such Loan is in arrears of more than 90 days, zero.
In calculating whether the Statutory Tests are satisfied, the Servicer shall
not take into account any amounts in relation to Defaulted Loan Assets or
any Loan in respect of which the Eligibility Criteria are not satisfied or
any amounts which are payable to the Hellenic Republic in accordance
with law 128/75.
"Asset Percentage" means on any date, the lower of:
(a)
(b)
(c)
95.0 per cent;
the percentage figure as notified to the Issuer (or the Servicer on
its behalf) on or prior to each Calculation Date (or otherwise from
time to time) by Fitch as part of their surveillance process
provided that where Fitch have not notified the Issuer or the
Servicer of such percentage on or prior to such Calculation Date,
the percentage shall be the percentage applied on the immediately
preceding Calculation Date. Such percentage figure will reflect
the rating agency methodology of Fitch; and
the percentage figure (as selected at the option of the Issuer, by
the Issuer (or the Servicer acting on its behalf) from time to time
and notified to Moody's and the Trustee), if applicable, being the
difference between 100 per cent. and the amount of credit
enhancement required to ensure that the Covered Bonds achieve
an Aaa rating by Moody's using Moody's expected loss
methodology (regardless of the actual Moody's rating of the
Covered Bonds at the time).
"Indexed Valuation" means any valuation used by applying the
Propindex, the Bank of Greece Index or any other recognised indexation
methods.
Marketable Assets:
Compliance with
Statutory Tests:
Breach of Statutory Tests:
The Servicer may, subject to filing a Registration Statement so providing,
include Marketable Assets in the Cover Pool in order to assess compliance
with the Statutory Tests, provided that the conditions set out in the
Servicing Deed are satisfied.
The Servicer will check compliance with the Statutory Tests on each
Calculation Date, or in respect of months in which there is no Calculation
Date the fifth Athens Business Day of such month. The Asset Monitor
will check compliance with the Statutory Tests on each Calculation Date
or as otherwise described in "Description of Principal Documents - Asset
Monitor Agreement" below.
If any of the Statutory Tests noted above are not satisfied, the Issuer must
take immediate remedial action.
The Issuer and the Servicer will immediately notify the Trustee of the
breach of any of the Statutory Tests.
In the event that the Issuer breaches any Statutory Test, the Issuer will not
be permitted to issue any further Covered Bonds until such time as such
breach has been cured.
- 15 -

Amendments to Statutory
Tests and Cover Pool
Asset definition:
Issuer Events:
The Servicing Deed provides that, subject to all applicable laws and
regulations, the Statutory Tests and the definition of "Cover Pool Asset"
may be amended by the Issuer from time to time without the consent of
the Trustee as a consequence of, inter alia, including in the Cover Pool,
Cover Pool Assets which have characteristics other than those pertaining
to the Initial Assets and/or changes to the hedging policies or servicing
and collection procedures of the Issuer provided that Fitch has provided
confirmation in writing that the ratings of the Covered Bonds would not
be adversely affected by, or withdrawn as a result of such amendment and
Moody's has been notified of such amendment.
If any of the following events (each, an "Issuer Event") occurs:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
an Issuer Insolvency Event;
any present or future Indebtedness of the Issuer becomes due and
payable prior to the stated maturity thereof as extended by any
grace period originally applicable thereto; or any present or future
guarantee of, or indemnity given by the Issuer in respect of,
Indebtedness is not honoured when called upon or within any
grace period originally applicable thereto, provided that the
amount of such Indebtedness individually or in the aggregate
exceeds €10,000,000 (or its equivalent in any other currency or
currencies);
the Issuer defaults in the performance or observance of any of its
other obligations under or in respect of the Covered Bonds or the
Transaction Documents, which in the sole opinion of the Trustee
would have a materially prejudicial effect on the interests of the
Covered Bondholders, and such default (i) is, in the sole opinion
of the Trustee, incapable of remedy or (ii) is, in the sole opinion
of the Trustee, capable of remedy and remains unremedied for 30
days or such longer period as the Trustee may agree after the
Trustee has given written notice thereof to the Issuer;
it is or will become unlawful for the Issuer to perform or comply
with any of its obligations under or in respect of the Covered
Bonds or the Transaction Documents, which in the sole opinion
of the Trustee would have a materially prejudicial effect on the
interests of the Covered Bondholders;
if there is a failure to satisfy any Statutory Test on any
Calculation Date, or on the monthly date when checked by the
Servicer, which is not remedied (for example by the addition of
new Loan Assets to the Cover Pool or the depositing of cash
collateral in the Transaction Account) within 5 Business Days (a
"Test Event");
there is a failure to pay the Final Redemption Amount on the
Final Maturity Date in respect of any Series for which an
Extended Final Maturity Date is specified in the applicable Final
Terms, which shall constitute an Issuer Event only for so long as
the Final Redemption Amount has not been paid in full; or
there is a failure to pay any amount of interest in respect of any
Series of Covered Bonds on the due date for payment of such
(disregarding any grace period),
then, for so long as such Issuer Event is continuing, (i) no further Covered
Bonds may be issued and (ii) all collections of principal and interest on
the Cover Pool Assets will be dedicated exclusively to the payment of
- 16 -

interest and repayment of principal on the Covered Bonds and to the
fulfilment of the obligations of the Issuer to the Secured Creditors in
accordance with the relevant Payments Priorities.
Servicing and collection
procedures:
The Servicer will be responsible for the servicing of the Cover Pool,
including, inter alia, for the following activities:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
collection and recovery in respect of each Cover Pool Asset;
administration and management of the Cover Pool;
management of any judicial or extra judicial proceeding
connected to the Cover Pool;
keeping accounting records of the amounts due and collected
under the Loan Assets and the Hedging Agreements;
preparation of quarterly reports (to be submitted to the Trustee,
the Asset Monitor and the Rating Agencies) on the amounts due
by debtors, and on the collections and recoveries made in respect
of the Loan Assets and Hedging Agreements;
carrying out the reconciliation of the amounts due and the
amounts effectively paid by the debtors under the Loans; and
notifying the Borrowers following the delivery of a Notice of
Default or the occurrence of an Issuer Insolvency Event or
Moody's Issuer Downgrade Event (each of which is continuing)
to make all payments directly to the Transaction Account (or such
other account as is approved in writing by the Trustee).
Replacement of Servicer
in servicing and collection
procedures:
The Trustee may appoint a third party to perform the Servicer's role in
relation to the servicing and collection procedures and cash management
functions, on the happening of any of the Servicer Events set out under
"Description of the Principal Transaction Documents - Servicing Deed"
below.
On this occurring the Servicer will cease to perform such functions under
the Servicing Deed.
Ongoing Data Reporting
Requirements:
The Bank of Greece shall be notified by the end of March of each year of
the following information as of the end of December of the preceding
year:
(a)
(b)
(c)
the results, as audited by a chartered accountant, of the reviews
referred to in paragraph 5 of chapter I of the Secondary Covered
Bond Legislation and of the monitoring of the processes and
limits referred to in paragraphs 4 and 6 of the aforementioned
chapter, with a detailed presentation of the data, methods and
parameters used;
detailed cover assets data verifying the observance of the limits
set out in paragraph 4 of chapter I of the Secondary Covered
Bond Legislation, as well as information relating to the
revaluation of the value of mortgaged real estate property in
respect of residential mortgage and other loans according to
paragraph 7 of the same chapter; and
(i) the average weighted interest rate of each category of assets
and the average weighted interest rate of the total of the assets of
the cover pool; (ii) the value of mortgaged real estate property in
respect of residential mortgage and other loans; (iii) a justification
- 17 -

of the chosen hedging policy with detailed analysis of the degree
of effectiveness thereof; and (iv) a maturity mismatch table of the
covered bonds and of their respective assets of the cover pool and
derivatives.
In addition the Issuer shall provide to the Bank of Greece within 30 days
from the end of each quarter summary information on the results of the
reviews performed pursuant to paragraphs 4 and 5 of chapter I of the
Secondary Covered Bond Legislation, as of the end of the first, second
and third quarters of each year.
Ongoing Data Disclosure
Requirements:
The Issuer must disclose in its quarterly and annual financial statements,
as well as on its internet website, the following information:
(a)
(b)
(c)
(d)
nominal amount and net present value of the covered bonds and
assets constituting the cover pool with a reference to the net
present value of the derivative financial instruments used for risk
hedging purposes;
a percentage analysis of the derivative financial instruments
comprised in the cover pool as per each counterparty category;
a maturity analysis of the assets constituting the cover pool in
terms of nominal value with a distinction between those
denominated in Euro and foreign currency; and
the total value of interest outstanding under loans that are in the
cover pool which are in arrears for a period exceeding 90 days,
the information above must also include comparative data on the
respective quarter of the preceding year.
- 18 -

ACCOUNTS AND CASH FLOW STRUCTURE
Collection Account:
Prior to the delivery of a Notice of Default or the occurrence of an Issuer
Event or a Moody's Issuer Downgrade Event (in each case which is
continuing), amounts in respect of the Loan Assets received from the
Borrowers will continue to be paid into accounts with the Issuer but the
Servicer will be required to transfer such funds within 1 Athens Business
Day of receipt to a segregated account (the "Collection Account") where
they will be subject to the Statutory Pledge. The Issuer will not
commingle any of its own funds and general assets with amounts standing
to the credit of the Collection Account.
Prior to the delivery of a Notice of Default or the occurrence of an Issuer
Event (disregarding any grace periods with respect to breach of any
Statutory Test) or a Moody's Issuer Downgrade Event (in each case which
is continuing), any amounts in the Collection Account may be withdrawn
by the Issuer for its own purposes as and when it sees fit. Following the
delivery of a Notice of Default or the occurrence of an Issuer Event or a
Moody's Issuer Downgrade Event (in each case, which is continuing), any
such amounts will be credited to the Transaction Account.
Following the delivery of a Notice of Default or the occurrence of an
Issuer Insolvency Event or a Moody's Issuer Downgrade Event (each of
which is continuing), the Servicer shall (and the Trustee may) instruct the
Borrowers to make payments in respect of the Loan Assets direct to the
Transaction Account (or such other account as is approved in writing by
the Trustee).
Transaction Account:
Revenue Ledger:
The Issuer shall establish and maintain with the Transaction Account
Bank a Euro denominated account (the "Transaction Account") which
will consist of a revenue ledger (the "Revenue Ledger"), hedge collateral
ledgers (the "Hedge Collateral Ledgers"), a facility special ledger (the
"Facility Special Ledger") and a commingling ledger (the
"Commingling Ledger").
The Revenue Ledger will be credited with the following amounts:
(a)
(b)
(c)
(d)
(e)
(f)
all amounts standing to the credit of the Collection Account
(following the delivery of a Notice of Default or an Issuer Event
which is continuing);
any amount received by the Issuer (following the delivery of a
Notice of Default or an Issuer Event which is continuing or a
Moody's Issuer Downgrade Event which is continuing) in respect
of the Cover Pool Assets;
any amounts paid to the Issuer by any Hedging Counterparty
under a Hedging Agreement, other than payments of collateral by
any Hedging Counterparty;
any drawing permitted to be made from the relevant Hedge
Collateral Ledger in satisfaction of amounts owing to the Issuer
by a Hedging Counterparty;
where the proceeds of disposal or on maturity of any Authorised
Investment (which derived from amounts invested from any
Ledger) exceed the original cost of such Authorised Investment,
the amount of such excess except those amounts attributable to
the Hedge Collateral Ledgers;
any interest, dividends or other income earned on any Authorised
Investment except those amounts attributable to the Hedge
- 19 -

Collateral Ledgers;
(g)
(h)
(i)
(j)
(k)
(l)
(m)
(n)
any interest, dividends or other income earned on any Marketable
Assets;
any amount deposited by the Issuer when effecting optional
substitution of Cover Pool Assets;
any amount deposited by the Issuer to prevent a sale of Selected
Loans to a third party;
any amount deposited by the Issuer to ensure compliance with the
Statutory Tests;
any amount in connection with the sale of Cover Pool Assets;
any drawings under the Credit Facility other than Facility Special
Drawings;
any amounts debited from the Facility Special Ledger or
Commingling Ledger other than those applied towards repaying a
Facility Special Drawing to the Credit Facility Provider; and
any interest accrued and credited to the Transaction Account.
The Issuer may make the following drawings from the Revenue Ledger:
(i)
prior to the delivery of a Notice of Default:
(a)
(b)
(c)
or the occurrence of an Issuer Event (disregarding any
grace periods with respect to breach of any Statutory
Test) or a Moody's Issuer Downgrade Event (in each case
which is continuing), any amounts (not including
drawings under the Credit Facility to the extent credited
to the Revenue Ledger and Facility Special Ledger
Drawings) in excess of what is necessary to ensure the
Cover Pool satisfies the Statutory Tests, to be used for
the Issuer's own purposes as it sees fit;
any drawings under the Credit Facility Agreement or
Facility Special Ledger Drawings made in order to
prevent the occurrence of a Test Event or to cure a Test
Event which is continuing, which may be repaid to the
Credit Facility Provider or the Facility Special Ledger (as
applicable) at any time provided that the Issuer has
provided the Trustee and the Servicer (if it is a different
entity from the Issuer) with a certification from a
reputable accounting firm of national standing that the
Statutory Tests will be satisfied immediately following
such repayment in a form satisfactory to each of them;
and
any drawings under the Credit Facility Agreement or
Facility Special Ledger Drawings made in order to
maintain the initial ratings of any Series of Covered
Bonds, which may be repaid to the Credit Facility
Provider or the Facility Special Ledger (as applicable) at
any time provided that the Rating Agencies have
provided a Rating Agency Confirmation in respect of
such repayment;
(ii)
to the extent of any drawing under the Credit Facility and/or any
Facility Special Ledger Drawing, any payments to be made in
- 20 -

accordance with the Payments Priorities;
(iii)
(iv)
(v)
following the occurrence of an Issuer Event which is continuing,
any payments to be made in accordance with the Payments
Priorities (to the extent not otherwise to be paid by the Issuer or
by any drawing under the Credit Facility and/or any Facility
Special Ledger Drawing);
repayments of Facility Special Ledger Drawings to the Facility
Special Ledger (subject to the netting provisions set out in the
Credit Facility Agreement); and
any repayments of drawings under the Credit Facility, other than
Facility Special Drawings.
"Facility Special Ledger Drawing" means a drawing from the Facility
Special Ledger.
Hedge Collateral Ledgers:
Facility Special Ledger:
Commingling Ledger:
The Hedge Collateral Ledgers will be credited with amounts of collateral
(together with any interest or other income earned thereon) provided by
the Hedging Counterparties and will be operated in accordance with the
terms of the Servicing Deed.
The Facility Special Ledger will be credited with Facility Special
Drawings under the Credit Facility and will be operated in accordance
with the terms of the Servicing Deed.
On the Programme Closing Date the Commingling Ledger will be
credited with €23,717,000.
On and prior to the occurrence of an Issuer Insolvency Event and for as
long as the Issuer's credit rating for its short term unsecured,
unsubordinated, unguaranteed debt obligations:
(a)
(b)
is below "Prime-1" in the case of Moody's or "F-1" in the case of
Fitch (or is at least equal to "Prime-1" in the case of Moody's and
"F-1" in the case of Fitch but the Rating Confirmation referred to
in paragraph (b) below has not been received), the Issuer will
credit to the Commingling Ledger such amounts as would be
necessary to ensure that at all times amounts standing to the credit
of the Commingling Ledger are at least equal to three times the
average monthly amount of Collections received by the Issuer in
relation to the Loan Assets in the twelve months period preceding
the later of (i) the most recent Programme Payment Date and (ii)
the most recent Issue Date of a Series of Covered Bonds; or
is at least equal to "Prime-1" in the case of Moody's and "F-1" in
the case of Fitch and subject to receipt of a Rating Agency
Confirmation, the Issuer will credit to the Commingling Ledger
such amounts as would be necessary to ensure that at all times
amounts standing to the credit of the Commingling Ledger are at
least equal to the average monthly amount of Collections received
by the Issuer in relation to the Loan Assets in the twelve months
period preceding the later of (i) the most recent Programme
Payment Date and (ii) the most recent Issue Date of a Series of
Covered Bonds.
Authorised Investments:
In accordance with the terms of the Servicing Deed, the Servicer may, in
its discretion invest sums standing to the credit of the Transaction Account
in Authorised Investments.
- 21 -

Programme Payment Date
Payments Priorities:
Prior to the delivery of a Notice of Default, the Issuer (or the Servicer on
its behalf) will make on each Programme Payment Date the following
payments (including provision for any such amounts which are not then
due and payable but which are expected to become due and payable prior
to the next Programme Payment Date and the payment of which will be
made on the relevant due date) (the "Programme Payment Date
Payments Priorities") in the following order of priority (in each case only
if and to the extent that payments (and provisions) of a higher priority
have been made in full):
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
first, all amounts due and payable to the Trustee;
second, pari passu and pro rata, all amounts due and payable to
any Secured Creditors (other than the Trustee, the Covered
Bondholders, the Credit Facility Provider and the Hedging
Counterparties);
third, pari passu and pro rata, any Expenses which are due and
payable;
fourth, pari passu and pro rata, all amounts due and payable (a)
of interest on any Covered Bonds and (b) under any Hedging
Agreement other than Subordinated Termination Payments and
any Excess Hedge Collateral payments;
fifth, pari passu and pro rata, all amounts of principal due and
payable on any Covered Bonds;
sixth, pari passu and pro rata, any Subordinated Termination
Payments (except to the extent that such amounts can be paid by
any premium received by the Issuer from a replacement Hedging
Counterparty) (provided that following the occurrence of an
Issuer Event which is continuing, such payments will only be
made following redemption in full of all Covered Bonds); and
seventh, any amounts due and payable to the Credit Facility
Provider.
"Expenses" means any documented fees, costs, liabilities and expenses
required to be paid to any third party creditor of the Issuer (other than the
Secured Creditors) in connection with the issue, listing or rating of, or
other expenses directly related to, the Covered Bonds and/or the
Programme.
"Subordinated Termination Payment" means, subject as set out below,
any termination payments due and payable to any Hedging Counterparty
under a Hedging Agreement where such termination results from (a) an
Additional Termination Event in respect of the relevant Hedging
Counterparty pursuant to the ratings downgrade provisions as specified in
the schedule to the relevant Hedging Agreement or (b) an event of default
in respect of which the Hedging Counterparty is the defaulting party
pursuant to the terms of the relevant Hedging Agreement.
Source of funds for
Programme Payment Date
Payments Priorities:
Prior to the occurrence of an Issuer Event which is continuing, the Issuer
will make payments under the Programme Payment Date Payments
Priorities out of its own funds, not including amounts standing to the
credit of the Transaction Account except for drawings made under the
Credit Facility or from the Facility Special Ledger for such purpose.
Upon the occurrence of an Issuer Event which is continuing, amounts
standing to the credit of the Revenue Ledger may be applied to make
payments under the Programme Payment Date Payments Priorities to the
- 22 -

extent not made from the Issuer's own funds.
Post Event of Default
Priority of Payments:
Following delivery of a Notice of Default all amounts received or
recovered in relation to the Cover Pool, any Authorised Investments and
the Transaction Documents (other than amounts standing to the credit of
the Hedge Collateral Ledgers which shall be applied in accordance with
the relevant Hedging Agreement) shall be applied on any Athens Business
Day in accordance with the following order of priority of payments (in
each case only if and to the extent that payments of a higher priority have
been made in full) (the "Post Event of Default Priority of Payments") to
make or provide for the following payments:
(i)
(ii)
first, any Indemnity to which the Trustee is entitled pursuant to
the Trust Deed and any costs, and expenses incurred by or on
behalf of the Trustee (i) following the occurrence of an Event of
Default in connection with or as a result of serving on the Issuer a
Notice of Default (to the extent that any such amounts have not
yet been paid before the delivery of a Notice of Default) and (ii)
following the delivery of a Notice of Default in connection with
or as a result of the enforcement of (a) the security granted under
the Statutory Pledge and the Security Deed and/or (b) any other
right or remedy that the Trustee is entitled to, or is required to
pursue, under or in connection with the Transaction Documents
and the Covered Bonds for the purpose of protecting the interests
of the Covered Bondholders and the other Secured Creditors
second, pari passu and pro rata to pay:
(a)
(b)
(c)
(d)
any remuneration then due and payable to the Trustee;
all amounts due and payable to any Secured Creditors
(other than the Trustee, the Covered Bondholders and the
Hedging Counterparties);
(i) all amounts of interest then due and payable on any
Covered Bonds and (ii) all amounts of principal due and
payable on any Covered Bonds;
any amounts due and payable under any Hedging
Agreement other than Subordinated Termination
Payments to any Hedging Counterparties;
(iii)
(iv)
(v)
(vi)
second, pari passu and pro rata to pay any Subordinated
Termination Payments (except to the extent that such amount can
be paid by any premium received by the Issuer from a
replacement Hedging Counterparty);
third, to pay any amounts due and payable to the Credit Facility
Provider;
fourth, pari passu and pro rata to pay any Expenses or Taxes due
and payable; and
fifth, to pay all excess amounts to the Issuer.
"Indemnity" means the indemnity given to the Trustee pursuant to the
Trust Deed.
Credit Facility:
The Issuer, the Servicer, the Trustee and the Credit Facility Provider will
enter into a 364 day credit facility agreement governed by English law
dated on or about the Programme Closing Date which can be extended at
the option of the Issuer (the "Credit Facility Agreement").
- 23 -

Pursuant to the Credit Facility Agreement, the Credit Facility Provider
will make available to the Issuer a revolving credit facility (the
"Facilities") which can be drawn on by the Issuer to pay amounts due to
the Secured Creditors (including the Covered Bondholders) on any
Programme Payment Date or for the purpose of satisfying the Statutory
Tests or to maintain the initial ratings of the Covered Bonds.
The amount available to be drawn under the credit facility at any time (the
"Commitment Amount") will be equal to the then aggregate of:
(i)
(ii)
(iii)
(iv)
the Principal Amount Outstanding of all Series of Covered
Bonds;
the amount of accrued interest on all Series of Covered Bonds at
such time;
all amounts then due to the other Secured Creditors (other than
the Credit Facility Provider);
any amounts in the Payments Priorities which are payable in
priority to the above amounts;
or such other amount as may be agreed between the parties hereto subject
to receipt of a Rating Agency Confirmation.
The Issuer's rights under the Credit Facility Agreement will be assigned to
the Trustee on behalf of the Secured Creditors pursuant to the Security
Deed. Upon the delivery of a Notice of Default in respect of the Issuer,
the Trustee may draw down the Credit Facility up to the full amount
available (which shall be credited to the Transaction Account but be
unavailable to be drawn by the Issuer) and apply it towards payment of
amounts due to the Secured Creditors (including the Covered
Bondholders). If upon the delivery of a Notice of Default in respect of the
Issuer the Credit Facility is so drawn and the proceeds thereof credited to
the Transaction Account, the Credit Facility Provider will have 10
Business Days following written notification to it by the Trustee of such
event (the "Election Period") to notify the Trustee in writing that it elects
to have all the Cover Pool Assets constituting the Cover Pool transferred
to it as a full repayment and discharge of all amounts drawn under the
Facilities. During the Election Period no Loan Assets in the Cover Pool
may be disposed of unless the Credit Facility Provider has notified the
Trustee in writing that it does not intend to exercise such right of election
or otherwise consents in writing to such disposal.
The Cover Pool Assets will only be transferred to the Credit Facility
Provider once the Trustee has confirmed that it is satisfied that all the
Secured Amounts (other than any amounts due to the Credit Facility
Provider) and/or all other moneys and other liabilities due or owing by the
Issuer in relation to the Programme have been paid or discharged in full.
In which case the transfer of the Cover Pool Assets to the Credit Facility
Provider will constitute a full repayment and discharge of all amounts
drawn under the Facilities.
Hedging Agreements:
The Issuer may, from time to time during the Programme, enter into
Interest Rate Swap Agreements and Covered Bond Swap Agreements,
(together the "Hedging Agreements") with one or more hedging
counterparties for the purpose of, inter alia, protecting itself against
certain risks (including interest, currency and credit) related to the Loan
Assets and/or the Covered Bonds.
Following the delivery of a Notice of Default or an Issuer Event which is
continuing any amounts due from any Hedging Counterparty will be paid
- 24 -

y the Hedging Counterparties direct to the Transaction Account and may
not be drawn by the Issuer.
Investor Report:
Quarterly no later than two Athens Business Days before a Programme
Payment Date (each an "Investor Report Date") the Issuer will produce
an investor report (the "Investor Report"), which will contain
information regarding the Covered Bonds and the Cover Pool Assets,
including statistics relating to the financial performance of the Cover Pool
Assets. Such report will be available to prospective investors in the
Covered Bonds and to Covered Bondholders on Bloomberg and on the
websites:
http://gctinvestorreporting.bnymellon.com/home.jsp
http://www.marfinbank.gr/MarfinEgnatia/HPEnDefault.aspx
- 25 -

DOCUMENTS INCORPORATED BY REFERENCE
This Base Prospectus should be read and construed in conjunction with each and any supplement to this
Base Prospectus prepared from time to time and the following documents which have been filed with the
Stock Exchange and shall be deemed to be incorporated in, and to form part of, the Base Prospectus and
which shall be deemed to modify or supersede the contents of the Base Prospectus to the extent that a
statement contained in any such document is inconsistent with such contents:
1. the auditors’ report and financial statements in respect of Egnatia Bank A.E. for the financial
period ended 31 December 2006 prepared by KPMG Kyriacou Certified Auditors S.A. (being a
member of the Institute of Certified Public Accountants of Greece and also registered with
PCAOB (Public Company Accounting Oversight Board)) which have been previously filed with
the Athens Stock Exchange;
2. the auditors’ report and consolidated financial statements in respect of Marfin Financial Group
Holdings S.A. (of which Marfin Bank S.A. was at such time a 100 per cent subsidiary) for the
financial period ended 31 December 2006 prepared by Grant Thornton Chartered Accountants
S.A. which have been previously filed with the Athens Stock Exchange; and
3. the auditors’ report and financial statements in respect of the Issuer for the financial period ended
31 December 2007 which have been previously filed with the Luxembourg Stock Exchange.
Documents 1 and 2 above are deemed to be incorporated in, and form part of, the Base Prospectus as the
Issuer does not have an auditors' report and financial statements for the financial period ended 31
December 2006, as the Issuer was created following a merger between Egnatia Bank A.E., Marfin Bank
S.A. and Laiki Bank (Hellas) S.A on 29 June 2007. For further details of the Issuer, refer to "Description
of the Issuer".
This Base Prospectus (or any document incorporated by reference in this Base Prospectus) will be made
available free of charge at the Specified Office (as defined below) of any Paying Agent.
- 26 -

RISK FACTORS
The Issuer believes that the factors described below represent the principal risks inherent in investing in
Covered Bonds issued under the Programme, but the inability of the Issuer to pay interest, principal or
other amounts on or in connection with any Covered Bonds may occur for other reasons and the Issuer
does not represent that the statements below regarding the risks of holding any Covered Bonds are
exhaustive. Prospective investors should also read the detailed information set out elsewhere in this Base
Prospectus and reach their own views prior to making any investment decision.
Factors relating to the Covered Bonds
The Covered Bonds may not be a suitable investment for all investors
Each potential investor in the Covered Bonds must determine the suitability of that investment in light of
its own circumstances. In particular, each potential investor should:
(i)
(ii)
(iii)
(iv)
(v)
have sufficient knowledge and experience to make a meaningful evaluation of the Covered
Bonds, the merits and risks of investing in the Covered Bonds and the information contained or
incorporated by reference in this Base Prospectus and any applicable supplement and/or Final
Terms;
have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of its
particular financial situation, an investment in the Covered Bonds and the impact the Covered
Bonds will have on its overall investment portfolio;
have sufficient financial resources and liquidity to bear all of the risks of an investment in the
Covered Bonds, including Covered Bonds with principal or interest payable in one or more
currencies, or where the currency for principal or interest payments is different from the potential
investor's currency;
understand thoroughly the terms of the Covered Bonds and be familiar with the behaviour of any
relevant indices and financial markets; and
be able to evaluate possible scenarios for economic, interest rate and other factors that may affect
its investment and its ability to bear the applicable risks.
The Covered Bonds are complex financial instruments. Sophisticated institutional investors generally do
not purchase complex financial instruments as stand alone investments. They purchase complex financial
instruments as a way to reduce risk or enhance yield with an understood, measured, appropriate addition
of risk to their overall portfolios. A potential investor should not invest in Covered Bonds which are
complex financial instruments unless it has the expertise to evaluate how the Covered Bonds will perform
under changing conditions, the resulting effects on the value of the Covered Bonds and the impact this
investment will have on the potential investor's overall investment portfolio.
The Covered Bonds will be obligations of the Issuer only
The Covered Bonds will be solely obligations of the Issuer and will not be obligations of or guaranteed by
the other Transaction Parties. No liability whatsoever in respect of any failure by the Issuer to pay any
amount due under the Covered Bonds shall be accepted by any of the Transaction Parties, any company
in the same group of companies as such entities or any other party to the transaction documents relating to
the Programme.
Extendable maturity of the Covered Bonds
The applicable Final Terms may provide that the Issuer's obligation to pay principal under the relevant
Covered Bonds may be deferred past the Final Maturity Date until the Extended Final Maturity Date (as
specified in the Final Terms). In such case, such deferral will occur automatically if the Issuer fails to pay
the Final Redemption Amount in respect of the relevant Series of Covered Bonds on their Final Maturity
Date. Any amount representing the Final Redemption Amount due and remaining unpaid on the Final
Maturity Date may be paid by the Issuer on any Interest Payment Date thereafter up to (and including) the
relevant Extended Final Maturity Date. Interest will continue to accrue and be payable on any unpaid
amounts on each Interest Payment Date up to the Extended Final Maturity Date in accordance with the
- 27 -

Conditions and the Issuer will make payments on each relevant Interest Payment Date and Extended Final
Maturity Date.
It is anticipated that the term of any Covered Bond Swap Agreement would extend to the Extended Final
Maturity Date of the relevant Series of Covered Bonds.
Ratings of the Covered Bonds
The ratings assigned to the Covered Bonds by Moody's address the expected loss to be suffered by
Covered Bondholders. The ratings assigned to the Covered Bonds by Fitch take into consideration
probability of default and loss given default.
The expected ratings of the Covered Bonds are set out in the relevant Final Terms for each Series of
Covered Bonds. Any Rating Agency may lower its rating or withdraw its rating if, in the sole judgment
of the Rating Agency, the credit quality of the Covered Bonds has declined or is in question. If any rating
assigned to the Covered Bonds is lowered or withdrawn, the market value of the Covered Bonds may
decrease. A credit rating is not a recommendation to buy, sell or hold securities and may be subject to
revision, suspension or withdrawal at any time. The Trustee is under no duty to maintain any rating of the
Covered Bonds.
Rating Agency Confirmation in respect of Covered Bonds
The terms of certain of the Transaction Documents provide that, in certain circumstances, the Issuer must,
and the Trustee may, obtain confirmation from the Rating Agencies that any particular action proposed to
be taken will not adversely affect or cause to be withdrawn the then current ratings of the Covered Bonds.
By acquiring the Covered Bonds, investors will be deemed to have acknowledged and agreed that,
notwithstanding the foregoing, a credit rating is an assessment of credit and does not address other
matters that may be of relevance to Covered Bondholders, including, without limitation, in the case of a
Rating Agency Confirmation, whether any action proposed to be taken by the Issuer, the Servicer, the
Trustee or any other party to a Transaction Document is either (i) permitted by the terms of the relevant
Transaction Document, or (ii) in the best interests of, or not prejudicial to, some or all of the Covered
Bondholders. In being entitled to have regard to the fact that the Rating Agencies have confirmed that the
then current ratings of the Covered Bonds would not be adversely affected or withdrawn, each of the
Issuer and the Secured Creditors is deemed to have acknowledged and agreed that the above does not
impose or extend any actual or contingent liability on the Rating Agencies to the Issuer, the Secured
Creditors or any other person or create any legal relations between the Rating Agencies and the Issuer, the
Secured Creditors or any other person whether by way of contract or otherwise.
Any such Rating Agency Confirmation may or may not be given at the sole discretion of each Rating
Agency. It should be noted that, depending on the timing of delivery of the request and any information
needed to be provided as part of any such request, it may be the case that a Rating Agency cannot provide
a Rating Agency Confirmation in the time available or at all, and the Rating Agency will not be
responsible for the consequences thereof. Such confirmation, if given, will be given on the basis of the
facts and circumstances prevailing at the relevant time, and in the context of cumulative changes to the
transaction of which the securities form part since the issuance closing date. A Rating Agency
Confirmation represents only a restatement of the opinions given, and is given on the basis that it will not
be construed as advice for the benefit of any parties to the transaction.
Absence of secondary market
No assurance is provided that there is an active and liquid secondary market for the Covered Bonds, or
that one will develop. None of the Covered Bonds have been, or will be, registered under the Securities
Act or any other applicable securities laws and they are subject to certain restrictions on the resale and
other transfer thereof as set forth under "Subscription and Sale". To the extent that a secondary market
exists or develops, it may not continue for the life of the Covered Bonds or it may not provide Covered
Bondholders with liquidity of investment with the result that a Covered Bondholder may not be able to
find a buyer to buy its Covered Bonds readily or at prices the Covered Bondholder desires.
- 28 -

Lack of liquidity in the secondary market may adversely affect the market value of the Covered Bonds
As at the date of this Base Prospectus, the secondary market for asset backed securities is experiencing
disruptions resulting from reduced investor demand for such securities. This has had a material adverse
impact on the market value of asset backed securities and resulted in the secondary market for asset
backed securities experiencing very limited liquidity. Structured investment vehicles, hedge funds,
issuers of collateralised debt obligations and other similar entities that are currently experiencing funding
difficulties have been forced to sell asset backed securities into the secondary market. The price of credit
protection on asset backed securities through credit derivatives has risen materially.
Limited liquidity in the secondary market may continue to have an adverse effect on the market value of
asset backed securities, especially those securities that are more sensitive to prepayment, credit or interest
rate risk and those securities that have been structured to meet the requirements of limited categories of
investors. Consequently, whilst these market conditions persist, an investor in Covered Bonds may not be
able to sell or acquire credit protection on its Covered Bonds readily and market values of Covered Bonds
are likely to fluctuate. Any of these fluctuations may be significant and could result in significant losses
to an investor.
It is not known for how long these market conditions will continue or whether they will worsen.
Exchange rate risks and exchange controls
The Issuer will pay principal and interest on the Covered Bonds in the Specified Currency. This presents
certain risks relating to currency conversions if an investor's financial activities are denominated
principally in a currency or currency unit other than the Specified Currency (the "Investor's Currency").
These include the risk that exchange rates may significantly change (including changes due to devaluation
of the Specified Currency or revaluation of the Investor's Currency) and the risk that authorities with
jurisdiction over the Investor's Currency may impose or modify exchange controls. An appreciation in
the value of the Investor's Currency relative to the Specified Currency would decrease (1) the Investor's
Currency equivalent yield on the Covered Bonds, (2) the Investor's Currency equivalent value of the
principal payable on the Covered Bonds and (3) the Investor's Currency equivalent market value of the
Covered Bonds.
Government and monetary authorities may impose (as some have done in the past) exchange controls that
could adversely affect an applicable exchange rate. As a result, investors may receive less interest or
principal than expected, or no interest or principal.
General legal investment considerations
The investment activities of certain investors are subject to legal investment laws and regulations, or
review or regulation by certain authorities. Each potential investor should consult its legal advisers to
determine whether and to what extent (1) Covered Bonds are legal investments for it, (2) Covered Bonds
can be used as collateral for various types of borrowing and (3) other restrictions apply to its purchase or
pledge of any Covered Bonds. Financial institutions should consult their legal advisors or the appropriate
regulators to determine the appropriate treatment of Covered Bonds under any applicable risk based
capital or similar rules.
Implementation of Basel II risk-weighted asset framework may result in changes to the risk-weighting of
the Covered Bonds
Following the issue of proposals from the Basel Committee on Banking Supervision for reform of the
1988 Capital Accord, a framework has been developed which places enhanced emphasis on market
discipline and sensitivity to risk. An updated version of the text of the proposed framework was
published in November 2005 under the title "Basel II: International Convergence of Capital Management
and Capital Standards: a Revised Framework" (the "Framework"). The Framework is being
implemented in stages (partly from year end 2006 and the most advanced from year end 2007). However,
the Framework is not self-implementing and, accordingly, implementation dates in participating countries
are dependent on the relevant national implementation process in those countries. As and when
implemented, the Framework may affect risk-weighting of the Covered Bonds for investors who are
subject to capital adequacy requirements that follow the Framework. Consequently, investors should
consult their own advisers as to the consequences to and effect on them of the application of the
- 29 -

Framework and any relevant implementing measures. Proposals and guidelines for implementing the
Framework in certain participating jurisdictions are still in development and no predictions can be made
as to the precise effects of potential changes on the Covered Bonds, the Issuer, any investor or otherwise.
Factors relating to the structure of a particular issue of Covered Bonds
A wide range of Covered Bonds may be issued under the Programme. A number of these Covered Bonds
may have features which contain particular risks for potential investors. Set out below is a description of
the most common such features:
Covered Bonds subject to optional redemption by the Issuer
An Issuer optional redemption feature is likely to limit the market value of Covered Bonds. During any
period when the Issuer may elect to redeem Covered Bonds, the market value of those Covered Bonds
generally will not rise substantially above the price at which they can be redeemed. This also may be true
prior to any such redemption period.
The Issuer may be expected to redeem Covered Bonds when its cost of borrowing is lower than the
interest rate on the Covered Bonds. At those times, an investor generally would not be able to reinvest
the redemption proceeds at an interest rate as high as the interest rate on the Covered Bonds being
redeemed. Potential investors should consider reinvestment risk in light of other investments available at
that time.
Fixed Rate Covered Bonds
Investment in Fixed Rate Covered Bonds involves the risk that subsequent changes in market interest
rates may adversely affect the value of the Fixed Rate Covered Bonds.
Variable Interest Covered Bonds with a multiplier or other leverage factors
Covered Bonds with variable interest rates can be volatile investments. If they are structured to include
multipliers or other leverage factors, or caps or floors, or any combination of such features or other
similar related features, their market values may be even more volatile than those for securities that do not
include such features.
Fixed/Floating Rate Covered Bonds
The Issuer may issue Covered Bonds which bear interest at a rate that converts from a fixed rate to a
floating rate, or from a floating rate to a fixed rate. Where the Issuer has the right to effect such a
conversion, this will affect the secondary market and the market value of the Covered Bonds since the
Issuer may be expected to convert the rate when it is likely to produce a lower overall cost of borrowing.
If the Issuer converts from a fixed rate to a floating rate in such circumstances, the spread on the Covered
Bonds may be less favourable than the prevailing spreads on comparable Floating Rate Covered Bonds
tied to the same reference rate. In addition, the new floating rate at any time may be lower than the rates
on other Covered Bonds. If the Issuer converts from a floating rate to a fixed rate in such circumstances,
the fixed rate may be lower than the then prevailing rates on its Covered Bonds.
Index Linked Interest Covered Bonds and Dual Currency Interest Covered Bonds
The Issuer may issue Covered Bonds with principal or interest determined by reference to an index or
formula, to changes in the prices of securities or commodities, to movements in currency exchange rates
or other factors (each, a "Relevant Factor"). In addition, the Issuer may issue Covered Bonds with
principal or interest payable in one or more currencies which may be different from the currency in which
the Covered Bonds are denominated. Potential investors should be aware that:
(i)
(ii)
(iii)
the market price of such Covered Bonds may be volatile;
they may receive no interest;
payment of principal or interest may occur at a different time or in a different currency than
expected;
- 30 -

(iv)
(v)
(vi)
(vii)
they may lose all or a substantial portion of their principal;
a Relevant Factor may be subject to significant fluctuations that may not correlate with changes
in interest rates, currencies or other indices;
if a Relevant Factor is applied to Covered Bonds in conjunction with a multiplier greater than one
or contains some other leverage factor, the effect of changes in the Relevant Factor on principal
or interest payable will be magnified; and
the timing of changes in a Relevant Factor may affect the actual yield to investors, even if the
average level is consistent with their expectations. In general, the earlier the change in the
Relevant Factor, the greater the effect on yield.
The historical experience of an index should not be viewed as an indication of the future performance of
such index during the term of any Index Linked Interest Covered Bonds. Accordingly, an investor should
consult its own financial, tax and legal advisers about the risk entailed by an investment in any Index
Linked Interest Covered bonds and the suitability of such Covered Bonds in light of their particular
circumstances.
Partly paid Covered Bonds
The Issuer may issue Covered Bonds where the issue price is payable in more than one instalment.
Failure to pay any subsequent instalment could result in an investor losing all of its investment.
Covered Bonds issued at a substantial discount or premium
The market values of securities issued at a substantial discount or premium from their principal amount
tend to fluctuate more in relation to general changes in interest rates than do prices for conventional
interest bearing securities. Generally, the longer the remaining term of the securities, the greater the price
volatility as compared to conventional interest bearing securities with comparable maturities.
Reliance on Hedging Counterparties
To provide a hedge against possible variances in the rates of interest payable on the Loans in the Cover
Pool (which may, for instance, include variable rates of interest, discounted rates of interest, fixed rates of
interest or rates of interest which track a base rate) and rates of interest payable on the Covered Bonds,
the Issuer may enter into an Interest Rate Swap Agreement with the Interest Rate Swap Provider in
respect of a Series of Covered Bonds. In addition, to provide a hedge against interest rate, currency
and/or other risks in respect of amounts received by the Issuer under the Loans in the Cover Pool and the
Interest Rate Swap Agreements and amounts payable by the Issuer under the Covered Bonds, the Issuer
may enter into a Covered Bond Swap Agreement with a Covered Bond Swap Provider in respect of a
Series of Covered Bonds between the Issuer and that Covered Bond Swap Provider.
If the Issuer fails to make timely payments of amounts due under any Hedging Agreement, then it will
have defaulted under that Hedging Agreement. A Hedging Counterparty is only obliged to make
payments to the Issuer as long as the Issuer complies with its payment obligations under the relevant
Hedging Agreement. If the Hedging Counterparty is not obliged to make payments or if it defaults on its
obligations to make payments of amounts in the relevant currency equal to the full amount to be paid to
the Issuer on the due date for payment under the relevant Hedging Agreement, the Issuer will be exposed
to changes in the relevant currency exchange rates and to any changes in the relevant rates of interest.
Unless a replacement swap is entered into, the Issuer may have insufficient funds to make payments
under the Covered Bonds.
If a Hedging Agreement terminates, then the Issuer may be obliged to make a termination payment to the
relevant Hedging Counterparty. There can be no assurance that the Issuer will have sufficient funds
available to make a termination payment under the relevant Hedging Agreement, nor can there be any
assurance that the Issuer will be able to enter into a replacement swap agreement, or if one is entered into,
that the credit rating of the replacement swap counterparty will be sufficiently high to prevent a
downgrade of the then current ratings of the Covered Bonds by the Rating Agencies.
- 31 -

If the Issuer is obliged to pay a termination payment under any Hedging Agreement, such termination
payment (except for Subordinated Termination Payments) will rank pari passu with amounts due on the
Covered Bonds.
A Hedging Counterparty may be required, pursuant to the terms of the relevant Hedging Agreement, to
post collateral with the Issuer if the ratings of the Hedging Counterparty are downgraded below the levels
specified in the relevant Hedging Agreement.
Trading in the Clearing Systems
In relation to any issue of Covered Bonds which have a denomination consisting of the minimum
Specified Denomination plus a higher integral multiple of another smaller amount, it is possible that the
Covered Bonds may be traded in amounts in excess of the Specified Denomination (or its equivalent) that
are not integral multiples of the Specified Denomination (or its equivalent). In such a case an investor
who, as a result of trading such amounts, holds a principal amount of less than the minimum Specified
Denomination may not receive a Definitive Covered Bond in respect of such holding (should definitive
Covered Bonds be printed) and would need to purchase a principal amount of Covered Bonds such that its
holding amounts to a Specified Denomination.
If Definitive Covered Bonds are issued, Covered Bondholders should be aware that Definitive Covered
Bonds having a denomination that is not an integral multiple of the minimum Specified Denomination
may be illiquid and difficult to trade.
Factors relating to the Cover Pool
Maintenance of the Cover Pool
Pursuant to the Greek Covered Bond Legislation, the Cover Pool is subject to the Statutory Tests. Failure
of the Issuer to take immediate remedial action to cure any one of these tests will result in the Issuer being
unable to issue further Covered Bonds and may have an adverse effect on the ability of the Issuer to meet
its payment obligations in respect of the Covered Bonds.
Sale of Loans and their Related Security following the occurrence of an Issuer Event which is continuing
Following the occurrence of an Issuer Event which is continuing, there is no guarantee that a buyer will
be found to acquire Loan Assets at the times required and there can be no guarantee or assurance as to the
price which can be obtained. However, if an Issuer Event has occurred, the Loan Assets may not be sold
for less than an amount equal to the Adjusted Required Redemption Amount for the relevant Series of
Covered Bonds until six months prior to the Final Maturity Date in respect of such Covered Bonds or (if
the same is specified as applicable in the relevant Final Terms) the Extended Final Maturity Date in
respect of such Covered Bonds. In the six months prior to, as applicable, the Final Maturity Date or
Extended Final Maturity Date, the Issuer is obliged to sell the Loan Assets for the best price reasonably
available notwithstanding that such price may be less than the Adjusted Required Redemption Amount.
No representations or warranties to be given by the Trustee if Loan Assets are to be sold
Following an Issuer Event which is continuing, the Issuer will be obliged to sell Loan Assets to third
party purchasers, subject to a right of pre emption in favour of the Issuer pursuant to the terms of the
Servicing Deed. In respect of any sale of Loan Assets to third parties, however, the Trustee will not give
representations and warranties or indemnities in respect of those Loan Assets and there is no assurance
that the Issuer would do so. Any representations and warranties previously given by the Issuer in respect
of the Loan Assets in the Cover Pool may not have value for a third party purchaser if the Issuer is then
insolvent. Accordingly, there is a risk that the realisable value of the Loan Assets could be adversely
affected by the lack of representations and warranties or indemnities.
Limited description of the Cover Pool
Covered Bondholders will not receive detailed statistics or information in relation to the Loan Assets in
the Cover Pool, because it is expected that the constitution of the Cover Pool will frequently change due
to, for instance:
(i)
the Issuer assigning Additional Cover Pool Assets to the Cover Pool; and
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(ii)
the Issuer removing Cover Pool Assets from the Cover Pool or substituting Cover Pool Assets in
the Cover Pool with Additional Cover Pool Assets.
There is no assurance that the characteristics of the Loan Assets allocated to the Cover Pool will be the
same as those Loan Assets in the Cover Pool prior to such allocation. However, each Loan Asset will be
required to meet the Eligibility Criteria.
No independent investigation in relation to the Loan Assets
None of the Arrangers, the Dealers or the Trustee or the other Transaction Parties has undertaken or will
undertake any investigations, searches or other actions in respect of any Borrower, Loan Asset or any
historical information relating to the Loan Assets and each will rely instead on the representations and
warranties made by the Issuer in relation thereto set out in the Servicing Deed.
Limited Liquidity of assets
In the event of any liquidation of the assets of the Issuer, including the Cover Pool Assets, the amount
realised will be a value agreed with the relevant purchaser of such assets. Such amount may be
insufficient to redeem all of the Covered Bonds in full at their then Principal Amount Outstanding. In
addition, it may not be possible to sell Loan Assets to a third party as there is not, at present, an active and
liquid secondary market for loans of this type in Greece.
Issuer's Lending Criteria
Each of the Loans originated by the Issuer will have been originated in accordance with its lending
criteria at the time of origination. It is expected that the Issuer's lending criteria will generally consider
the term of loan, loan to value ratio, debt-to-income ratio, status of applicant, employment and credit
history. In the event of the designation of any Loans and their Related Security to the Cover Pool, the
Issuer will warrant only that such Loans and Related Security were originated in accordance with its
lending criteria applicable at the time of origination. The Issuer retains the right to revise its lending
criteria from time to time but would do so only in accordance with the terms of the Servicing Deed. If the
lending criteria change in a manner that affects the creditworthiness of the Loans, that may lead to
increased defaults by Borrowers and may affect the realisable value of the Cover Pool, or part thereof,
and the ability of the Issuer to make payments under the Covered Bonds.
Competition in the Greek Residential Mortgage Market
The Issuer is, among other things, subject to the risk of the contractual interest rates on the Loans being
less than that required by the Issuer to meet its commitments under the Covered Bonds, which may result
in the Issuer having insufficient funds available to meet the Issuer's commitment under the Covered
Bonds and its other obligations. There are a number of lenders in the Greek residential mortgage market
and competition may result in lower interest rates on offer in such market. In the event of lower interest
rates, Borrowers under mortgage loans may seek to repay such mortgage loans early, with the result that
the Cover Pool may not continue to generate sufficient cashflows in order for the Issuer to meet its
commitments under the Covered Bonds.
Geographical Concentration of the Loan Assets
The security for the Covered Bonds may be affected by, among other things, a decline in real estate
values. Certain geographic regions will from time to time experience weaker regional economic
conditions and housing markets than will other regions and, consequently, may experience higher rates of
loss and delinquency on mortgage loans generally. Although borrowers (the "Borrowers") are located
throughout Greece, the Borrowers may be concentrated in certain locations, such as densely populated
areas. Any deterioration in the economic condition of the areas in which the Borrowers are located, or any
deterioration in the economic condition of other areas that causes an adverse effect on the ability of the
Borrowers to repay the Loan Assets could increase the risk of losses on the Loan Assets. A concentration
of Borrowers in such areas may therefore result in a greater risk of loss than would be the case if such
concentration had not been present. Such losses, if they occur, could have an adverse effect on the yield to
maturity of the Covered Bonds as well as on the repayment of principal and interest due on the Covered
Bonds. Certain areas of Greece may from time to time experience declines in real estate values. No
assurance can be given that values of the Properties have remained or will remain at their levels on the
dates of origination of the related Loans. If the residential real estate market in Greece in general, or in
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any particular region, should experience an overall decline in property values such that the outstanding
balances of the Loans become equal to or greater than the value of the Properties, such a decline could in
certain circumstances result in the value of the interest in the Property securing the Loans being
significantly reduced and, ultimately, may affect the repayment of the Covered Bonds.
Insurance
Each Borrower is required to obtain and maintain fire and earthquake insurance, unless the property was
built before 1 January 1960, in which case only fire insurance is available in the market. Accordingly, a
claim under such policy for damage to the relevant property can be made only if the damage results from
the occurrence of a fire or earthquake (if applicable). This is consistent with the terms and conditions of
loans similar to the Loans made by other mortgage lenders in Greece who also only require borrowers to
obtain and maintain fire and (if applicable) earthquake insurance.
In addition, certain Borrowers are required to take out (where applicable) life and permanent disability
insurance policies, with the Issuer as the primary loss payee, to secure their obligations under the relevant
Loan. Covered Bondholders should be aware, however, that such insurance policies are not required in
respect of every Borrower.
Subsidy Payments
In the Hellenic Republic, subsidies are available to borrowers of residential mortgage loans in respect of
interest payments under such loans. Subsidies are available from the Greek State and/or the Greek
Workers Housing Association (the "OEK") and/or certain other Greek State owned entities. The
availability and amount of subsidy is determined by reference to the financial and social circumstances of
a borrower. The State, the OEK and any other applicable State subsidised entity's subsidy payments will
form part of the Cover Pool along with the other receivables under the loan agreements. Therefore, the
Issuer will receive the subsidised component of interest due under the Loans from the OEK, the Greek
State or any other applicable State subsidised entity. The Servicer will notify the OEK, the Greek State
and any other Greek State owned entity of the subsidised interest amounts that are payable by them and
will take any action necessary to ensure that they make payment of the subsidised interest amounts that
are payable by them.
The OEK will maintain a savings account at the Issuer, and the Servicer will be authorised to deduct the
amount of the subsidy related to the relevant Subsidised Loan from this account and then transfer such
amounts to the Collection Account (or following the occurrence of an Issuer Event which is continuing or
a Moody's Issuer Downgrade Event which is continuing or the delivery of a Notice of Default, the
Transaction Account, or such other account as the Trustee may specify in writing) according to the terms
of the Servicing Deed. Until such withdrawal is made, the OEK remains liable to the Issuer for the
relevant subsidy. If the OEK savings account balance for any given month has not been sufficiently
replenished by the OEK in advance of the next month's automated deduction of the subsidy amounts, the
remaining balance owing to the Issuer will be deducted once additional funds have been deposited by the
OEK.
The Servicer will direct the Greek State and any other Greek State owned entity to make payments of the
subsidised interest amounts due to the Issuer into the Collection Account (or following the occurrence of
an Issuer Event which is continuing or a Moody's Issuer Downgrade Event which is continuing or the
delivery of a Notice of Default, the Transaction Account, or such other account as the Trustee may
specify in writing) according to the terms of the Servicing Deed.
Although the Greek State, the OEK or the relevant Greek State owned entity, as appropriate, is required
to pay the subsidised interest amounts, the relevant Borrowers also remain liable to pay the full amount of
interest due under their Loans. However, if the Greek State and/or the OEK and/or the relevant Greek
State subsidised entity fails to pay any subsidised interest amounts, then the Borrower (although liable for
the full amount of the interest payment) may not be able to make all payments which are due under the
relevant Loan. If the Borrower fails to pay the full amount under the Loan made to it, the Issuer may not
be able to satisfy its obligations in respect of the Covered Bonds.
The OEK pays subsidised interest amounts under the relevant Subsidised Loans on a monthly basis up to
two months in arrears and the Greek State and Greek State owned entities pay subsidised interest amounts
under the relevant Subsidised Loans every six months in arrears. Accordingly, the Issuer will not receive
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any portion of the interest that is subsidised by the OEK, the Greek State or Greek State owned entities in
respect of such Subsidised Loan at the same time as the unsubsidised portion of interest paid by the
Borrower. In addition, a Greek State subsidised entity may not pay the subsidy at the same time as
amounts are paid by the Borrower.
Despite the fact that the Greek State, the OEK or any Greek State subsidised entity will not benefit from
sovereign immunity in respect of their respective obligations under Greek law, investors should note that
enforcement of judgments against the Greek State, the OEK or any Greek State subsidised entity may be
subject to limitations. If there is any change in Greek law or in administrative practice of the Greek State,
the OEK or any Greek State subsidised entity affecting the timing and amount of subsidised interest
amounts otherwise payable (but for that change) then this could adversely affect the ability of the Issuer
to make payments in respect of the Covered Bonds.
Default by Borrowers
Borrowers may default on their obligations under the Loans in the Cover Pool for a variety of reasons
which could in turn reduce the Issuer's ability to make payments on the Covered Bonds. Various factors
influence default rates, prepayment rates and the ultimate payment of interest and principal, such as
changes in the national or international economic climate, regional economic conditions, changes in
interest rates, inflation, the availability of financing, loss of earnings, unemployment, illness, divorce and
other similar factors. Other factors in Borrowers' individual or financial circumstances may affect the
ability of Borrowers to repay the Loans.
Suspension of Enforcement Proceedings
Any enforcement proceedings commenced against a borrower could be delayed or suspended as a result
of various provisions of Greek law. For further details see "The Mortgage and Housing Market in Greece
- Enforcing Security".
Following the example of other countries, a new law for the protection of borrowers has been passed by
the Greek Parliament which provides, among other things, that (a) enforced public auctions should be
made by sealed bids and, if there is more than one bidder, be followed by oral bids between the two
highest bidders, (b) the starting price of the auction must be at least equal to the “objective” price of the
property, as assessed for tax purposes, (c) each bid must be accompanied by a bank guarantee or banker’s
draft of an amount equal to the starting price, (d) properties being the sole residence of the debtor may not
be seized and judicially sold by credit or financial institutions for claims not exceeding the amount of
Euro 20,000, in cases where the debtor is in a state of proven impossibility to perform his contractual
obligation through no fault of his own. This restriction would not apply in case of debts secured by
mortgages and pre-notations granted with the consent of the debtor and thus will not apply to any of the
loans in the Cover Pool, which are all secured by such charges.
Auction Proceeds
The proceeds of an auction following enforcement against a property securing a Loan must be allocated
in accordance with Articles 975 and 976 of the Greek Civil Procedure Code. These Articles require the
notary public which acted as the auction clerk to deduct the expenses (including legal, bailiff's and
notarial fees) incurred in connection with the enforcement from the proceeds and then to satisfy, in
priority to other claims, claims against the relevant Borrower pursuant to employment relationships and
contracts for legal and educational services arising in the previous two years. For further details see "The
Mortgage and Housing Market in Greece - Enforcing Security" below.
As such there is the possibility that the Issuer will not receive sufficient proceeds following enforcement
against a property securing a Loan to discharge the amounts that are owed to it by the relevant Borrower.
Consumer Protection Laws
Greece has specific consumer protection legislation (Law 2251/1994 as repeatedly amended, most
recently by Law 3587/2007) following Directives 87/102 as amended by Directives 2002/65, 2005/29.
Furthermore, according to statutory delegation granted by the recent Law 3587/2007, the Ministry of
Development issued a decision in June 2008(No. Z1-798 published in Gov. Gazette 1353/B/11.7.2008),
by which a number of provisions of mortgage loans (such as the calculation of interest on the basis of a
360 day year, certain arrangement fees and prepayment penalties, termination of the mortgage loan and
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equest of the total outstanding balance due to any late payment, disclaimer of the guarantor regarding
certain rights granted to guarantors under articles 862-868 of the Greek Civil Code etc.) have been
declared to be "abusive" and are thus null and void, since these provisions have been already held to be
abusive and therefore illegal by irrevocable decisions of the Greek Courts. The above Ministerial
Decision applies also to mortgage loans entered into prior to its enactment because the Greek Supreme
Court has repeatedly held that the consumer protection laws have retrospective effect and apply also to
agreements previously entered into.
Following the Athens Court of Appeal decision 5253/03 in respect of a class action concerning mortgage
loans originated by Emporiki Bank (the "Interim Class Action Decision"), Emporiki Bank and EKPIZO
appealed to the Greek Supreme Court in respect of the Interim Class Action Decision. The Interim Class
Action Decision affected certain provisions that mortgage lenders in Greece included in their mortgage
loans. On 4 March 2005 the Greek Supreme Court issued its decision 430/2005 (the "Final Class Action
Decision"). The Final Class Action Decision held that the Interim Class Action Decision was incorrect in
certain crucial respects. Nonetheless the Final Class Action Decision did hold that a number of the
provisions of the mortgage loans of Emporiki Bank and of its practices relating to such mortgage loans
were unenforceable on grounds of illegality or of being contrary to good faith.
In particular, the Interim Class Action Decision held that certain prepayment penalties and arrangement
commissions (together, the "Reclaimable Amounts") that are and were charged to borrowers are abusive
and therefore illegal. The Issuer, in common with other mortgage lenders, charged and has continued to
charge the Reclaimable Amounts to its borrowers. Accordingly, Borrowers can claim back such amounts
that have been charged by the Issuer under the Loans. Furthermore, the Issuer would be liable to
Borrowers should Reclaimable Amounts continue to be charged after the Programme Closing Date. Any
such claim by a Borrower could reduce the Issuer's ability to make payments in respect of the Covered
Bonds.
The standard documentation for each Loan contains certain similar provisions with respect to
arrangement fees, file opening fees and prepayment penalties to those that were held to be unenforceable
in the Final Class Action Decision.
In addition the Greek Supreme Court held that banks could not calculate interest on the basis of a 360 day
year and charge interest on the actual days elapsed, therefore any excess interest charged in this manner
was illegal.
Unfair Commercial Practices Directive 2005
The Directive 2005/29/EC on Unfair Commercial Practices was recently transposed into Greek Law by
way of incorporation into Law 3587/2007 (articles 9(a) - (i)). The new provisions prohibit misleading and
aggressive practices particularly in the advertising and marketing of products and sets out a list of such
prohibited practices. In case of a violation by traders, consumers are entitled to seek damages, while the
traders are also subject to an administrative fine. This Law is not expected to adversely affect the
performance of the Loan Assets, as most of the aspects of marketing and advertising by banks in Greece
have already been specifically regulated in this regard since 2002 (BoG 2501/2002, Code of Conduct for
Mortgage Loans).
Proposed Mortgage Credit Directive
In July 2005, the European Commission published a Green Paper on mortgage credit, in which it
announced its intention that loans secured by a mortgage on land will be excluded from the proposed
consumer credit directive but will be covered by any initiatives resulting from the Green Paper process in
relation to mortgage credit.
It is uncertain what effect the adoption and implementation of any initiatives resulting from the Green
Paper process in relation to mortgage credit, would have on the Loans, the Issuer and its businesses and
operations. The European Commission published feedback in May 2006 on its July 2005 Green Paper and
subsequently undertook preliminary consultation with stakeholders which resulted in the publication of
the reports of two expert groups in December 2006 and May 2007.
The White Paper on the Integration of EU Mortgage Credit Markets was published on 18 December 2007.
In the paper, the Commission has stated that it is yet to be determined as to whether legislation is the most
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appropriate way forward. The Commission is therefore undertaking further assessments and cost-benefit
analyses during 2008. The Commission has stated that no directive will be tabled if the costs of legislative
measures outweigh their benefits.
On 14 March 2008, the European Commission published a notice, requesting tenders to undertake a study
on the costs and benefits of the different policy options for mortgage credit. Tenders are required to be
made by 13 May 2008. The tender anticipates that the study should take 9 months to complete. No
assurance can be given that the finalised directive or initiatives will not adversely affect the ability of the
Issuer to make payments under the Covered Bond Guarantee.
Factors relating to the Issuer
The state of the political and economic environment, particularly in Greece may significantly affect the
Issuer's performance
The Issuer's operations and loan portfolio are mainly concentrated in Greece. For the financial year
ended 31 December 2007 the Issuer's international operations accounted for less than 4 per cent. of its
total assets. 96 per cent. of the Issuer's loans and 98.7 per cent. of its advances to customers, were
derived from the Issuer's operations in Greece. As a result, the state of the Greek economy significantly
affects the Issuer's financial performance as well as the market price and liquidity of the Issuer's shares.
Consequently, an economic slowdown, a deterioration of conditions in Greece or other adverse changes
affecting the Greek economy could result in, among other things, higher rates of credit defaults on loans
or a decline in new borrowing, which could adversely impact the Issuer's business, financial condition,
cash flows and results of operations. Moreover, the political environment both in Greece and in other
countries in which it operates may be adversely affected by events outside its control, such as changes in
government policies, EU Directives in the banking sector and other areas, political instability or military
action affecting Europe and/or other areas abroad and taxation and other political, economic or social
developments in or affecting Greece and the countries in which it operates or may plan to expand.
The Issuer conducts international activities
The Issuer has built up operations in Romania and as such its operations are exposed to the risk of adverse
political, governmental or economic developments in Romania. In addition, the Issuer may face
particular operating risks in Romania which it does not face in Greece. These factors could have a
material adverse effect on its financial condition and results of operations. The Issuer's operations in
Romania also expose it to foreign currency risk. A decline in the value of the Romanian Leu relative to
the value of the euro may have an adverse effect on its financial condition and results of operations.
Risks Related to the Business of the Issuer
As a result of the Issuer's activities, the Issuer is exposed to a variety of risks, among the most significant
of which are credit risk, market risk, operational risk, liquidity risk and insurance risk. These could result
in material adverse effects on the Issuer's financial performance and reputation.
• Credit Risk: Credit risk is the risk of financial loss relating to the failure of a borrower to honour
its contractual obligations. Credit risk arises in lending activities and also in various other
activities where the Issuer is exposed to the risk of counterparty default, such as trading, capital
markets and settlement activities. Counterparty default can be caused by a number of reasons,
which the Issuer may not be able to accurately assess at the time it undertakes the relevant
activity. The database that monitors defaulting customers across the banking system in Greece
monitors both defaults and aggregate loans outstanding to a particular customer through the
Tiresias Black and White lists respectively but considering the voluntary nature of the provision
of information by Greek banks, the White list database may not be complete for any given
customer. Consequently, the Issuer is subject to the risk that its customers may have borrowed
unsustainably large amounts from other banks which the Issuer would be unable to detect.
• Market Risk: Market risk includes, but is not limited to, interest rate, foreign exchange rate, bond
price and equity risks. Changes in interest rate levels, yield curves and spreads may affect the
Issuer's net interest margin. Changes in currency exchange rates affect the value of assets and
liabilities denominated in foreign currencies and the value of the Issuer's assets in foreign
currencies and may affect income from foreign exchange dealing. The performance of financial
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markets may cause changes in the value of the Issuer's investment and trading portfolios. The
Issuer has utilised risk management methods to mitigate and control these and other market risks
to which it is also exposed. However, it is difficult to predict with accuracy changes in economic
or market conditions and to anticipate the effects that such changes could have on the Issuer's
financial performance and business operations.
• Liquidity Risk: Liquidity risk is the risk that a bank may be unable to anticipate and provide for
unforeseen decreases or changes in funding sources which could have consequences adverse to
such bank's ability to meet its obligations when they fall due.
• Operational Risk: Operational risk is the risk of loss due to inadequate or failed internal
processes, or due to external events, whether deliberate, accidental or natural occurrences.
Internal processes include, but are not limited to, employees and information systems. External
events include floods, fires, earthquakes or terrorist attacks, fraud by employees or others, errors
by employees, failure to comply with regulatory requirements and conduct of business rules or
equipment failures.
• Insurance Risk: Insurance risk is the risk to earnings due to mismatches between expected and
actual claims. Depending on the insurance product, this risk is influenced by macroeconomic
changes, changes in customer behaviour, changes in public health, pandemics and catastrophic
events (e.g. earthquake, industrial disaster, terrorism, etc.).
Impact of Regulatory Changes
The Issuer is subject to financial services laws, regulations, administrative actions and policies in the
locations in which it operates. Changes in supervision and regulation, in particular in Greece, could
materially affect the business of the Issuer, the products and services offered or the value of its assets.
Although the Issuer works closely with its regulators and continually monitors the situation, future
changes in regulation, fiscal or other policies can be unpredictable and are beyond the control of the
Issuer.
Volatility in interest rates may negatively affect the Issuer's net interest income and have other adverse
consequences
Interest rates are highly sensitive to many factors beyond the Issuer's control, including monetary policies
and domestic and international economic and political conditions. As with any bank, changes in market
interest rates could affect the interest rates the Issuer charges on interest earning assets differently to the
interest rates the Issuer pays on its interest bearing liabilities. This difference could reduce its net interest
income. Since the majority of the Issuer's loan portfolio effectively re-prices in three years or less, rising
interest rates may also result in an increase in the Issuer's impairment losses on loans and advances if
customers cannot refinance in a higher interest rate environment. Further, an increase in interest rates
may reduce the demand for loans and the Issuer's ability to originate loans. Conversely, a decrease in the
general level of interest rates may adversely affect the Issuer through, among other things, increased pre
payments on the Issuer's loan and mortgage portfolio and increased competition for deposits. Likewise, a
decrease in interest rates may affect the Issuer's ability to originate assets for the Cover Pool or otherwise
fund payments in respect of the Covered Bonds.
The Issuer's lending margins may decline
The Greek banking industry has historically enjoyed high loan margins compared to other EU member
states. However, even though loan margins have converged closer to those in other EU member states, in
the future loan margins may decline due to economic and other conditions. In addition, the adoption of
rules for the enhancement of transparency in the financial services market by the Bank of Greece and
recent court judgments on consumer protection may result in lower margins with respect to consumer
loans and credits for banks operating in Greece. A decline in lending margins would have a negative
impact on the Issuer's results from operations.
The Issuer faces significant competition from Greek and foreign banks
Deregulation has led to increased competition in the Greek banking sector. In addition, consolidation
among Greek banks has led to increased competition resulting from the increased efficiency and greater
resources of these combined entities. The Issuer faces competition from foreign banks, some of which
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have significantly greater resources. Notwithstanding its leading position in Greece in certain products
and services, the Issuer may not be able to continue to compete successfully with domestic and
international banks in the future.
The Issuer could be exposed to significant future pension and post retirement benefit liabilities
The employees of the Issuer and certain of its subsidiaries participate in employee managed pension
schemes. The Issuer makes significant contributions to these schemes. In addition, the Issuer and several
of its subsidiaries offer other post retirement benefit plans, including medical benefit plans.
Any future legislation regarding pensions and pension liabilities or other post retirement benefit
obligations, may increase the liability of the Issuer or its subsidiaries with respect to pension and other
post retirement benefit plan contributions to cover actuarial or operating deficits of those plans.
The Issuer appointed the Financial University of Athens to conduct an actuarial study of its Pension Plan
dated 31 December 2007. The pension plan of the Bank is in accordance with laws 2112/10 and 3198/55.
IAS article 19 clearly specifies the methodology to be used in the actuarial analysis and reports the
obligations and cost attributable to the pension plan considering the financial results of the Issuer. The
study applied the most proper method of calculating the reserve amount, being the Project Unit Credit
Method and set out all the realistic assumptions that were used.
The actuarial study took into consideration all the above regulations and that the amount registered in the
book of the Issuer is €10,152,502 which fully complies with the reserve amount required by the law.
The Issuer's ability to reduce staff in Greece is limited
Part of the Issuer's strategy is to increase profitability by making its operations more efficient. The
Issuer's ability to realise one component of this, reducing staff, is limited by Greek labour laws, a
company collective agreement, current employment regulation and the Issuer's desire to maintain good
relations with employees. As a result, the Issuer will continue to depend on voluntary redundancies and
attrition to achieve staff reductions. The Issuer will continue to assess whether it will be able to reduce its
staff. However, it may not always be successful in doing so.
The Greek banking sector is subject to strikes
The Greek banking industry has been subject to strikes, mainly over the issues of pensions and wages.
Bank employees throughout Greece went on strike for three days in 2007 and nine days in 2008 (up to 15
May, 2008), mainly on the grounds of pension reforms proposed by the Greek Government in March
2008. Prolonged labour unrest could have a material adverse effect on the Bank’s operations in Greece.
According to the Issuer's internal data approximately 60% of the Issuer’s employees belong to its labour
union and approximately 3% have participated in strike action.
The Issuer's accounting policies relating to the treatment of delinquent loans in Greece and in some of the
Issuer's non-Greek subsidiaries differ from those followed by banks in certain other countries
Pursuant to Greek law, the Issuer ceases to accrue interest on commercial loans in Greece when they are
delinquent for 180 days, and on consumer and credit card loans when they are delinquent for 100 days.
This is longer than would be the case if such loans were extended in some European countries and in the
United States, where loans are generally considered non performing if they are delinquent for 90 days.
Consequently, there is a risk the Issuer's financial statements may understate the Issuer's level of non
performing loans and overstate its interest income relative to banks in other countries.
Non-performing loans have had a negative impact on the Issuer's operations and may continue to do so
Non-performing loans represented approximately 4.24 per cent. of the Issuer's total loan portfolio as at 31
December 2007. As a result of certain tax and legal considerations, non-performing loans generally
remain on the Issuer's balance sheet significantly longer than for other banks in the EU.
The Issuer's current credit approval and monitoring procedures focus on the borrower's cash flow and
ability to repay in an effort to improve the quality of the Issuer's loan assets and mitigate future provisions
for non-performing loans. However, the Issuer cannot assure investors that these credit approval and
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monitoring procedures will reduce the amount of provisions for loans that become non-performing in the
future. Future provisions for non-performing loans could have a materially adverse impact on the Issuer's
operating results. In addition, a downturn in the global economy would potentially result in a higher
proportion of non-performing loans.
The Issuer may incur significant losses on its trading and investment activities due to market fluctuations
and volatility
The Issuer maintains trading and investment positions in debt, currency, equity and other markets. These
positions could be adversely affected by volatility in financial and other markets, creating a risk of
substantial losses. Volatility can also lead to losses relating to a broad range of other trading and hedging
products, including swaps, futures, options and structured products.
The Issuer's hedging may not prevent losses
If any of the variety of instruments and strategies that the Issuer uses to hedge its exposure to various
types of risk in its businesses is ineffective, the Issuer may incur losses. Many of the Issuer's strategies
are based on historical trading patterns and correlations. Unexpected market developments therefore may
adversely affect the effectiveness of its hedging strategies. Moreover, the Issuer does not hedge all of its
risk exposure in all market environments or against all types of risk. In addition, the manner in which
gains and losses resulting from certain ineffective hedges are recorded may result in additional volatility
in the Issuer's reported earnings.
An interruption in or a breach of security in the Issuer's information systems may result in lost business
and other losses.
In common with most other banks, the Issuer relies on communications and information systems provided
by third parties to conduct its business. Any failure or interruption or breach in security of these systems
could result in failures or interruptions in its customer relationship management, general ledger, deposit
servicing and/or loan organisation systems. The Issuer cannot provide assurances that such failures or
interruptions will not occur or, if they do occur, that they will be adequately addressed. However, due to
the backup systems which the Issuer has in place the occurrence of any failures or interruptions should
not result in a loss of customer data and an inability to service customers, which could have a material
adverse effect on the Issuer's financial condition and results of operations.
Future acquisitions may result in unexpected losses
Typically, when the Issuer acquires a banking business, it acquires all of its liabilities as well as its assets.
The Issuer's acquisition procedures may fail to identify all actual or potential liabilities of a company
prior to its acquisitions, and it may not obtain sufficient indemnities to protect itself against such acquired
liabilities. For example, the failure to identify and accurately determine the level of credit risk or market
risk to which an acquired bank is exposed prior to its acquisition may lead to unexpected losses following
the acquisition, which may have a significant adverse effect on the Issuer's results of operations and
financial condition.
Regulation of the Greek banking industry is changing
Regulation of the banking industry in Greece has changed in recent years pursuant to changes in Greek
law, largely to comply with applicable EU Directives. In January 1999, the Bank of Greece introduced
new provisioning policies that require Greek banks to make provisions depending on the status and the
type of a given loan and the number of days the loan has been in arrears. These provisioning policies
were amended in January 2003 and January and November 2005 and generally require Greek banks to
increase their provisions for capital adequacy purposes. In addition the Issuer is required to comply with
the requirements of Bank of Greece Act No. 2877/2006. The Issuer cannot predict what regulatory
changes may be imposed in the future, either as a result of regulatory initiatives in the European Union,
by the Bank of Greece or by U.S. securities regulators. If the Issuer is required to make additional
provisions or increase reserves, as may result from the proposed New Basel Capital Accord (discussed
below) and other potential regulatory changes, this could adversely affect the Issuer's financial condition
or results of operations.
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The Issuer is subject to capital requirements that could limit its operations
The Issuer is subject to capital adequacy requirements adopted by the Bank of Greece, which provide for
a minimum ratio of total capital to risk-adjusted assets both on a consolidated basis and on a soloconsolidated
basis expressed as a percentage. If the Issuer fails to maintain its ratios this may result in
administrative actions or sanctions against it which may impact the Issuer's ability to fulfil its obligations
under the Covered Bonds. In addition, the Greek Covered Bond Law requires any bank issuing or
guaranteeing Greek covered bonds to be subject to certain minimum capital requirements.
Pursuant to the Greek Covered Bond Law, in the event that the total assets comprising the Cover Pool
exceeds 20% of the available assets of the credit institution as Issuer, the Bank of Greece may impose
further capital requirements. Any such further capital requirements could have an adverse effect on the
ability of the Issuer to make payments under the Covered Bonds.
The Issuer's capital adequacy requirements may change as a result of the New Basel Capital Accord
In 1988, the Basel Committee on Banking Supervision (the "Basel Committee") adopted capital
guidelines (which are referred to in this Base Prospectus as the "Basel guidelines") based on the
relationship between a bank's capital and its credit risks. The Basel guidelines have been implemented by
banking regulators in most industrialised countries, including Greece. The Basel guidelines are intended
to strengthen the soundness of the international banking system and reduce competitive inequality among
international banks by harmonising the definition of capital and the basis for the evaluation of asset risks
and by establishing a uniform target capital adequacy ratio of capital to risk weighted assets.
In October 2005, the Council of the European Union published the final proposal for the re casting of
Directive 2000/12/EC of 20 March 2000, relating to the taking up and pursuit of the business of credit
institutions, and Directive 1993/6/EEC of 15 March 1993, on the capital adequacy of investment firms
and credit institutions. As a result, Directive 2006/48/EC (relating to the taking up and pursuit of the
business of credit institutions) and Directive 2006/49/EC (on the capital adequacy of investment firms
and credit institutions) were adopted by the European Union (the "New Basel Capital Accord") and were
implemented in Greece in 2007 by Laws 3601/2007 and 3606/2007 and a series of Bank of Greece
decisions (2587-2596/20.8.2007). As a result of this, the Issuer may be required by its regulators to
maintain higher levels of capital, which could decrease its operational flexibility and increase its
financing costs. Consequently, the New Basel Capital Accord may have a material adverse effect on the
Issuer's financial condition or results of operations.
Factors relevant to Greek law
Greek Covered Bond Legislation
The Greek Covered Bond Legislation came into force in August 2007. The transactions contemplated in
this Base Prospectus are based on the provisions of the Greek Covered Bond Legislation. There has been
no judicial authority as to the interpretation of any of the provisions of the Greek Covered Bond
Legislation. For further information on the Greek Covered Bond Legislation, see "Summary of the Greek
Covered Bond Legislation". There are a number of aspects of Greek law which are referred to in this
Base Prospectus with which potential Covered Bondholders are likely to be unfamiliar. Particular
attention should be paid to the sections of this Base Prospectus containing such references.
Greek insolvency proceedings
If insolvency proceedings were commenced against the Issuer in Greece, a receiver would be appointed
over the Issuer in Greece and the Servicer might cease to be capable of servicing the Loans on behalf of
the Issuer in Greece. However, this would not affect the ability of the Trustee to enforce its rights and
claims as the holder of a statutory pledge under Paragraph 7 of Article 91, since, in accordance with
Greek law, the Trustee, as the pledgee under such provision, would be entitled to receive any claims out
of the Loans and Related Security in accordance with Article 1254 of the Greek Civil Code. In relation to
a winding up of the Issuer, Greek law 3458/2006 incorporated Directive 2001/24/EC of the European
Parliament and of the Council of April 2001 on the reorganisation and winding up of credit institutions
(the "Credit Institutions Insolvency Directive") into Greek law in May 2006. The Credit Institutions
Insolvency Directive applies to credit institutions and their branches set up in member states other than
those in which they have their head offices, as defined in Directive 2000/12/EC, subject to the conditions
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and exemptions laid down in the Credit Institutions Insolvency Directive. Only the administrative or
judicial authorities of the home member state which are responsible for winding up are empowered to
decide on the opening of winding up proceedings concerning a credit institution, including in relation to
branches established in other member states.
Greek Withholding Tax
Payments of interest in respect of the Covered Bonds to Covered Bondholders residing in Greece shall be
subject to withholding tax at a rate of 10 per cent. Save as discussed under ("Taxation — Greek
Taxation") below, individuals will have no further tax liability in respect of these payments.
Security
Realisation of Charged Property following the occurrence of an Event of Default and service of a Notice
of Default
If an Event of Default occurs and a Notice of Default is served on the Issuer, then the Trustee will be
entitled to enforce the Security created under and pursuant to the Greek Covered Bond Legislation and
the Security Deed, after having been indemnified and/or secured to its satisfaction, and the proceeds from
the realisation of the Charged Property will be applied by the Trustee towards payment of all secured
obligations in accordance with the Post Event of Default Priority of Payments.
There is no guarantee that the proceeds of realisation of the Charged Property will be in an amount
sufficient to repay all amounts due to the Secured Creditors (including the Covered Bondholders) under
the Covered Bonds and the Transaction Documents.
If, following the occurrence of an Event of Default, a Notice of Default is served on the Issuer then the
Covered Bonds may be repaid sooner or later than expected or not at all.
EU Savings Directive
Under EC Council Directive 2003/48/EC (implemented in Greek law by Law 3312/2003) on the taxation
of savings income, each Member State of the European Union is required to provide to the tax authorities
of another Member State details of payments of interest (or similar income) paid by a person within its
jurisdiction to an individual resident in that other Member State. However, for a transitional period,
Belgium, Luxembourg and Austria are instead required (unless during that period they elect otherwise) to
operate a withholding system in relation to such payments (the ending of such transitional period being
dependent upon the conclusion of certain other agreements relating to information exchange with certain
other countries). A number of non European Union countries and territories including Switzerland have
agreed to adopt similar measures (a withholding system in the case of Switzerland).
If a payment were to be made or collected through a Member State of the European Union which has
opted for a withholding system and an amount of or in respect of tax were to be withheld from that
payment, neither the Issuer nor any Paying Agent nor any other person would be obliged to pay additional
amounts with respect to any Covered Bond as a result of the imposition of such withholding tax. If a
withholding tax is imposed on a payment made by a Paying Agent, the Issuer will be required to maintain
a Paying Agent in a Member State of the European Union that will not be obliged to withhold or deduct
tax pursuant to the Directive.
Changes of law
The structure of the issue of the Covered Bonds and the ratings which are to be assigned to them are
based on English and Greek law, in effect as at the date of this Base Prospectus. No assurance can be
given as to the impact of any possible change to English or Greek law or administrative practice in the
U.K. or Greece after the date of this Base Prospectus.
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FORM OF THE COVERED BONDS
The Covered Bonds of each Series will be in either bearer form, with or without receipts, interest coupons
and/or talons attached, or registered form, without receipts, interest coupons and/or talons attached.
Covered Bonds will be issued outside the United States in reliance on Regulation S.
Bearer Bonds
On 13 June 2006 the European Central Bank (the "ECB") announced that notes in new global note
("NGN") form are in compliance with the "Standards for the use of EU securities settlement systems in
ESCB credit operations" of the central banking system for the euro (the "Eurosystem"), provided that
certain other criteria are fulfilled. At the same time the ECB also announced that arrangements for notes
in NGN form will be offered by Euroclear and Clearstream, Luxembourg as of 30 June 2006 and that debt
securities in global bearer form issued through Euroclear and Clearstream, Luxembourg after 31
December 2006 will only be eligible as collateral for Eurosystem operations if the NGN form is used.
Each Tranche of Covered Bonds in bearer form ("Bearer Bonds") will initially be in the form of a
temporary global covered bond (the "Temporary Global Covered Bond"), without interest coupons.
Each Temporary Global Covered Bond will be delivered on or prior to the original issue date of the
Tranche to a common safekeeper for Euroclear and Clearstream, Luxembourg.
On and after the date (the "Exchange Date") which is 40 days after a Temporary Global Covered Bond is
issued, interests in such Temporary Global Covered Bond will be exchangeable (free of charge) upon a
request as described therein for either (a) interests in a permanent global covered bond in bearer form (the
"Permanent Global Covered Bond") without receipts and interest coupons attached of the same Series
or (b) for Definitive Covered Bonds of the same Series with, where applicable, receipts, interest coupons
and talons attached (as indicated in the applicable Final Terms and subject, in the case of definitive
Covered Bonds, to such notice period as is specified in the applicable Final Terms), in each case against
certification of non U.S. beneficial ownership as described above unless such certification has already
been given. The holder of a Temporary Global Covered Bond will not be entitled to collect any payment
of interest, principal or other amount due on or after the Exchange Date unless, upon due certification,
exchange of the Temporary Global Covered Bond for an interest in a Permanent Global Covered Bond or
for Definitive Covered Bonds is improperly withheld or refused.
The applicable Final Terms will specify that a permanent global Covered Bond will be exchangeable (free
of charge), in whole but not in part, for Definitive Covered Bonds with, where applicable, receipts,
interest coupons and talons attached upon either (a) provided the Covered Bonds have a minimum
Specified Denomination, or integral multiples thereof, not less than 60 days' written notice from
Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of an interest in such
permanent global Covered Bond) to the Principal Paying Agent as described therein or (b) upon the
occurrence of an Exchange Event. For these purposes, "Exchange Event" means that:
(a)
(b)
either Euroclear or Clearstream, Luxembourg have been closed for business for a continuous
period of 14 days (other than by reason of holiday, whether statutory or otherwise) or have
announced an intention permanently to cease business or have in fact done so and no successor
clearing system is available; or
the Issuer has or will become subject to adverse tax consequences which would not be suffered
were the Global Covered Bond (and any interests therein) exchanged for Definitive Covered
Bonds.
The Issuer will promptly give notice to Covered Bondholders of each Series of Global Covered Bonds in
accordance with the Notices Condition if an Exchange Event occurs. In the event of the occurrence of an
Exchange Event, Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of
an interest in such Permanent Global Covered Bond) or the Trustee may give notice to the Principal
Paying Agent requesting exchange and, in the event of the occurrence of an Exchange Event as described
in (b) above, the Issuer may also give notice to the Principal Paying Agent requesting exchange. Any
such exchange shall occur not later than 45 days after the date of receipt of the first relevant notice by the
Principal Paying Agent.
The following legend will appear on all Bearer Bonds that have an original maturity of more than 365
days and on all receipts and interest coupons relating to such Bearer Bonds:
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"ANY UNITED STATES PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO
LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAWS, INCLUDING THE
LIMITATIONS PROVIDED IN SECTIONS 165(j) AND 1287(a) OF THE INTERNAL REVENUE
CODE."
The sections referred to provide that United States holders, with certain exceptions, will not be entitled to
deduct any loss on Bearer Bonds, receipts or interest coupons and will not be entitled to capital gains
treatment of any gain on any sale or other disposition in respect of such Bearer Bonds, receipts or interest
coupons.
Registered Bonds
Each Tranche of Registered Bonds will be in the form of either individual covered bond certificates in
registered form ("Individual Covered Bond Certificates") or a global note in registered form (a "Global
Registered Bond"), in each case as specified in the relevant Final Terms. Each Global Registered Bond
will be deposited on or around the relevant issue date with a depositary or a common depositary for
Euroclear and/or Clearstream, Luxembourg and/or any other relevant clearing system and registered in
the name of a nominee for such depositary and will be exchangeable for Individual Covered Bond
Certificates in accordance with its terms.
If the relevant Final Terms specifies the form of Bonds as being "Individual Covered Bond Certificates",
then the Bonds will at all times be in the form of Individual Covered Bond Certificates issued to each
Bondholder in respect of their respective holdings.
The applicable Final Terms will specify that a Global Registered Bond will be exchangeable (free of
charge), in whole but not in part, for Individual Covered Bond Certificates upon either (a) provided the
Covered Bonds have a minimum Specified Denomination, or integral multiples thereof, not less than 60
days' written notice from Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any
holder of an interest in such Global Registered Covered Bond) to the Principal Paying Agent as described
therein or (b) upon the occurrence of an Exchange Event. For these purposes, "Exchange Event" means
that:
(a)
(b)
either Euroclear or Clearstream, Luxembourg have been closed for business for a continuous
period of 14 days (other than by reason of holiday, whether statutory or otherwise) or have
announced an intention permanently to cease business or have in fact done so; or
the Issuer has or will become subject to adverse tax consequences which would not be suffered
were the Global Registered Covered Bond (and any interests therein) exchanged for Individual
Covered Bond Certificates.
The Issuer will promptly give notice to Covered Bondholders of each Series of Global Covered Bonds in
accordance with the Notices Condition if an Exchange Event occurs. In the event of the occurrence of an
Exchange Event, Euroclear and/or Clearstream, Luxembourg (acting on the instructions of any holder of
an interest in such Global Registered Covered Bond) or the Trustee may give notice to the Principal
Paying Agent requesting exchange and, in the event of the occurrence of an Exchange Event as described
in (b) above, the Issuer may also give notice to the Principal Paying Agent requesting exchange. Any
such exchange shall occur not later than 45 days after the date of receipt of the first relevant notice by the
Principal Paying Agent.
General
In addition, the Global Covered Bonds will contain provisions which modify the Terms and Conditions of
the Covered Bonds as they apply to the Global Covered Bonds. The following is a summary of certain of
those provisions:
Payments: Payments in respect of the Global Covered Bonds cannot be collected until certification of
non-U.S. beneficial ownership is received by the Principal Paying Agent. All payments in respect of the
Global Covered Bonds will be made against presentation and (in the case of payment of principal in full
with all interest accrued thereon) surrender of a Global Covered Bond at the Specified Office of any
Paying Agent and will be effective to satisfy and discharge the corresponding liabilities of the Issuer in
respect of the Global Covered Bonds.
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A record of each payment made on a Global Covered Bond, distinguishing between any payment of
interest and principal will be endorsed on such Global Covered Bond by the Principal Paying Agent to
which such Global Covered Bond was presented for the purpose of making such payment and such record
shall be prima facie evidence that the payment in question has been made.
Notices: Notwithstanding the Notices Condition, while any of the Covered Bonds are represented by a
Global Covered Bond and the Global Covered Bond is deposited with a common depositary for Euroclear
and Clearstream, Luxembourg, notices to Covered Bondholders may be given by delivery of the relevant
notice to Euroclear and Clearstream, Luxembourg and, in any case, such notices shall be deemed to have
been given to the Covered Bondholders in accordance with the Notices Condition on the date of delivery
to Euroclear and Clearstream, Luxembourg.
Transfers: For so long as the Covered Bonds are represented by the relevant Global Covered Bonds, they
will be transferable in accordance with the rules and procedures for the time being of Euroclear, or, as the
case may be, Clearstream, Luxembourg and the Issuer, the Principal Paying Agent and the Trustee may
treat each person who is for the time being shown in the records of Euroclear or of Clearstream,
Luxembourg as the holder of a particular principal amount of Covered Bonds, (in which regard any
certificate or other document issued by Euroclear or Clearstream, Luxembourg as to the principal amount
of the Covered Bonds standing to the account of any person shall be conclusive and binding for all
purposes) as the holder of such principal amount of such Covered Bonds for all purposes, other than with
respect to the payment of interest and repayment of principal on such Covered Bonds, the right to which
shall be vested solely in the bearer of the relevant Global Covered Bond and in accordance with its terms.
Exercise of put option: In order to exercise the option contained in Condition 8.4 (Redemption at the
option of the Covered Bondholders) the bearer of the Global Covered Bond or the holder of a Global
Registered Bond must, within the period specified in the Conditions for the deposit of the relevant
Covered Bond and put notice, give written notice of such exercise to the Principal Paying Agent
specifying the principal amount of Covered Bonds in respect of which such option is being exercised.
Any such notice will be irrevocable and may not be withdrawn.
Partial exercise of call option: In connection with an exercise of the option contained in Condition 8.3
(Redemption at the option of the Issuer) in relation to some only of the Covered Bonds, the Permanent
Global Covered Bond or Global Registered Bond may be redeemed in part in the principal amount
specified by the Issuer in accordance with the Conditions and the Covered Bonds to be redeemed will not
be selected as provided in the Conditions but in accordance with the rules and procedures of Euroclear
and Clearstream, Luxembourg (to be reflected in the records of Euroclear and Clearstream, Luxembourg
as either a pool factor or a reduction in principal amount, at their discretion).
Meetings: The holder of each Global Covered Bond will be treated as being two persons for the purposes
of any quorum requirement of, or the right to demand a poll at, a meeting of holders of the Covered
Bonds, as the case may be, and, at any such meeting, as having one vote in respect of each €50,000
principal amount of each Covered Bond for which the Global Covered Bond may be exchanged.
Further Series
The Principal Paying Agent shall arrange that, where a further Tranche of Covered Bonds is issued which
is intended to form a single Series with an existing Tranche of Covered Bonds, the Covered Bonds of
such further Tranche shall be assigned a common code and ISIN number which are different from the
common code and ISIN number assigned to Covered Bonds of any other Tranche of the same Series until
at least the Exchange Date applicable to the Covered Bonds of such further Tranche.
Any reference herein to Euroclear and/or Clearstream, Luxembourg shall, whenever the context so
permits, be deemed to include a reference to any successor operator and/or successor clearing system
and/or additional or alternative clearing system specified in the applicable Final Terms or as may
otherwise be approved by the Issuer, the Principal Paying Agent and the Trustee.
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TERMS AND CONDITIONS OF THE COVERED BONDS
If the Covered Bonds were to be issued in definitive form, the terms and conditions set out on the reverse
of each of such Covered Bonds would be as follows. While the Covered Bonds are represented by Global
Covered Bonds, they will be governed by the same terms and conditions except to the extent that such
terms and conditions are appropriate only to securities in definitive form or are expressly varied by the
terms of such Global Covered Bonds. The applicable Final Terms in relation to any Series of Covered
Bonds may specify other terms and conditions which shall, to the extent so specified or inconsistent with
the following Terms and Conditions, replace or modify the following Terms and Conditions for the
purpose of such Covered Bonds. The applicable Final Terms (or the relevant provisions thereof) will be
endorsed upon, or attached to, each Global Covered Bond and Definitive Covered Bond. Reference
should be made to "Form of Final Terms" for a description of the content of Final Terms which will
specify which of such terms are to apply in relation to the relevant Covered Bonds.
1. General
1.1 This Covered Bond is one of a Series of Covered Bonds issued by the Issuer pursuant to the Trust
Deed.
1.2 The Issuer has agreed to issue the Covered Bonds subject to the terms of the Trust Documents.
1.3 The Agency Agreement records certain arrangements in relation to the payment of interest and
principal in respect of the Covered Bonds.
1.4 Certain provisions of these Conditions are summaries of the Trust Documents and the Agency
Agreement and are subject to their detailed provisions.
1.5 The Instrumentholders are deemed to have notice of all the provisions of the Transaction
Documents.
1.6 Copies of the Transaction Documents are available for inspection by Covered Bondholders
during normal business hours at the principal office for the time being of the Trustee and at the
Specified Offices of each of the Paying Agents, the initial Specified Offices of which are set out
below.
1.7 The Final Terms for this Covered Bond are set out in Part A of the Final Terms attached to or
endorsed on this Covered Bond which supplement these Conditions and may specify other terms
and conditions which shall, to the extent so specified or inconsistent with the Conditions, replace
or modify the Conditions for the purposes of this Covered Bond.
2. Definitions
"Accrual Yield" has the meaning given in the relevant Final Terms;
"Additional Business Centre(s)" means the city or cities specified as such in the relevant Final
Terms;
"Additional Financial Centre(s)" means the city or cities specified as such in the relevant Final
Terms;
"Adjusted Outstanding Principal Balance" means in respect of each Loan, the lower of:
(i)
(ii)
(iii)
(iv)
the Outstanding Principal Balance of such Loan;
the Indexed Valuation relating to such Loan, in each case multiplied by 0.80, less the
Outstanding Principal Balance of any first-ranking Loan if such Loan is a secondranking
Loan, provided that such Loan can never be given a value of less than zero;
if such Loan is a first ranking loan with a loan-to-value at such time greater than 80 per
cent., 80 per cent. of the value of the relevant Property securing such Loan; and
if such Loan is in arrears of more than 90 days, zero;
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"Agency Agreement" means the agreement so named dated on or about the Programme Closing
Date between the Issuer, the Agents, and the Trustee;
"Agents" means the Calculation Agent, the Transfer Agent, the Registrar and the Paying Agents
and "Agent" means any one of them;
"Aggregate Adjusted Outstanding Principal Balance" means the aggregate of the Adjusted
Outstanding Principal Balance of each Loan;
"Arrears of Interest" means, in relation to a Loan as at any date, the aggregate of all interest and
expenses which are due and payable and unpaid on that date;
"Article 91" means Article 91 of Law No. 3601/2007 (published in the government gazette No
178/A/1-8-2007), as amended by Article 48 of Law No. 3693/2008 published in the government
gazette No 174/A/25-8-2008;
"Asset Monitor Agreement" means the agreement so named entered into, inter alia, by the
Issuer, the Asset Monitor and the Trustee on the Programme Closing Date;
"Asset Monitor" means PricewaterhouseCoopers S.A. in its capacity as asset monitor in respect
of the Covered Bonds;
"Athens Business Day" means any TARGET Settlement Day on which banks are open for
business in Athens;
"Authorised Investments" means:
(a)
(b)
(c)
(d)
Euro demand or time deposits, money market funds, certificates of deposit, long term
debt obligations and short-term debt obligations (including commercial paper), provided
that in all cases such investments will have matured before the next Programme Payment
Date, and the short-term, unsecured, unguaranteed and unsubordinated debt obligations
of the issuing or guaranteeing entity or the entity with which the demand or time
deposits are made are rated at least P-1/Aaa by Moody’s and F1+/AA by Fitch;
Euro denominated government and public debt securities, provided that such
investments will have matured before the next Programme Payment Date, and which are
rated Aaa by Moody’s and AAA by Fitch;
Euro denominated residential mortgage backed securities, provided that such
investments will have matured before the next Programme Payment Date, are actively
traded in a continuous, liquid market on a recognised stock exchange, are held widely
across the financial system, are available in an adequate supply and which are rated Aaa
by Moody’s and AAA by Fitch; or
guaranteed investment contracts (the terms of which have been approved in writing by
the Rating Agencies),
provided that such Authorised Investments (with the exception of any guaranteed investment
contracts) satisfy the requirements for eligible assets that can collateralise covered bonds under
Paragraph 8(b) of Section B of Bank of Greece Act No. 2588/20-8-2007;
"Bearer Bonds" means Covered Bonds issued in bearer form;
"Calculation Agent" means the Principal Paying Agent or such other Person specified in the
relevant Final Terms as the party responsible for calculating the Interest Rate(s) and Interest
Amount(s) and/or such other amount(s) as may be specified in the relevant Final Terms;
"Calculation Amount" has the meaning given in the applicable Final Terms;
"Calculation Date" means each date falling seven Athens Business Days prior to a Programme
Payment Date;
"Capitalised Arrears" means the amount of any Arrears of Interest in respect of which:
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(i)
(ii)
the Servicer has, by arrangement with the relevant Borrower, agreed to capitalise; and
have been capitalised and added, in the relevant accounts of the Issuer, to the principal
amount outstanding in respect of such Loan;
"Capitalised Expenses" means, in relation to a Loan, the amount of any expense, charge, fee,
premium or payment (excluding, however, any Arrears of Interest) capitalised and added to the
principal amount outstanding in respect of such Loan in accordance with the relevant Loan Asset
Agreement;
"Charged Property" means both the English Charged Property and the Greek Charged Property;
"Clearing Systems" means Clearstream, Luxembourg and Euroclear;
"Clearstream, Luxembourg" means Clearstream Banking, société anonyme, Luxembourg;
"Closing Arrangements Deed" means the deed so named entered into, inter alia, by the Issuer
and the Trustee on the Programme Closing Date;
"Conditions" means in relation to the Covered Bonds, the terms and conditions endorsed on the
Covered Bonds in the form set out in Schedule 5 to the Trust Deed as modified in accordance
with the Final Terms;
"continuing", in respect of an Event of Default, an Issuer Event or Test Event, shall be construed
as a reference to an Event of Default, an Issuer Event or Test Event, as the case may be, which
has not been waived in accordance with the terms of the Conditions or, as the case may be, the
relevant Transaction Document or which has not been remedied within the relevant grace period
(if any);
"Couponholders" means the holders of the Coupons;
"Coupons" means the interest coupons related to the Covered Bonds in or substantially in the
form set out in Part 2 of Schedule 3 to the Trust Deed and for the time being outstanding or, as
the context may require, a specific number of such coupons;
"Cover Event" means the Euro Equivalent of the Principal Amount Outstanding of all Series of
Covered Bonds, together with all accrued interest thereon, exceeds:
(a)
(b)
(c)
(d)
(e)
the Aggregate Adjusted Outstanding Principal Balance; plus
all interest accrued on Loans comprised in the Cover Pool; plus
the outstanding principal balance of the Marketable Assets in the Cover Pool and
accrued interest thereon; plus
the amount standing to the credit of the Transaction Account (other than the Hedge
Collateral Ledgers); less
the weighted average remaining maturity of all Covered Bonds (expressed in years) then
outstanding multiplied by the Euro Equivalent of the aggregate Principal Amount
Outstanding of the Covered Bonds multiplied by the Negative Carry Factor;
"Cover Pool Asset" means an asset which is part of the cover pool of the Covered Bonds
pursuant to the Greek Covered Bond Legislation (collectively, the "Cover Pool");
"Covered Bond Swap Agreements" means any swap agreements entered into between the
Issuer and a Covered Bond Swap Provider to hedge the Issuer against certain interest rate,
currency and/or other risks in respect of amounts received by the Issuer under the Loans and the
Interest Rate Swap Agreements (if any) and amounts payable by the Issuer under the Covered
Bonds;
"Covered Bond Swap Provider" means a provider of a covered bond swap to the Issuer to
hedge the Issuer against certain interest rate, currency and/or other risks in respect of amounts
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eceived by the Issuer under the Loans and the Interest Rate Swap Agreements (if any) and
amounts payable by the Issuer under the Covered Bonds;
"Covered Bondholder" means a holder of Covered Bonds;
"Covered Bonds" means the covered bonds issued by the Issuer constituted by the Trust Deed;
"Dealer Agreement" means the dealer agreement dated the Programme Closing Date and
entered into between the Issuer and the Dealers;
"Dealers" means Deutsche Bank Aktiengesellschaft, Barclays Bank PLC, acting through its
investment banking division, Barclays Capital, and any dealers appointed from time to time
pursuant to the terms of the Dealer Agreement;
"Definitive Covered Bonds" means any Covered Bonds issued in definitive bearer form;
"Determination Date" has the meaning given in the applicable Final Terms;
"Determination Period" means each period from (and including) a Determination Date to (but
excluding) the next Determination Date (including, where either the Interest Commencement
Date or the final Interest Payment Date is not a Determination Date, the period commencing on
the first Determination Date prior to, and ending on the first Determination Date falling after,
such date);
"Dual Currency Interest Covered Bonds" means Covered Bonds specified as such in the
relevant Final Terms;
"English Charged Property" means all the property of the Issuer which is subject to the English
Security;
"English Security" means the security created in favour of the Trustee by the Issuer pursuant to
the Security Deed;
"euro" means the single currency introduced at the start of the third stage of European economic
and monetary union pursuant to the Treaty;
"Euroclear" means Euroclear Bank S.A./N.V.;
"Euro Equivalent" means, in relation to a Series of Covered Bonds which is denominated in (a)
a currency other than Euro, the Euro equivalent of such amount ascertained using the relevant
Swap Rate relating to such Series of Covered Bonds and (b) Euro, such amount;
"Event of Default" means any one of the events specified in Condition 12 (Events of Default);
"Extended Final Maturity Date" has the meaning given in the relevant Final Terms;
"Extraordinary Resolution" means a resolution passed by the Covered Bondholders (or, as the
context requires, a particular Series thereof) by a majority of not less than three quarters of the
votes cast;
"Final Maturity Date" has the meaning given in the relevant Final Terms;
"Final Redemption Amount" has the meaning given in the relevant Final Terms;
"Final Terms" means the document as amending or supplementing the Conditions in relation to
a specific Series;
"Fitch" means Fitch Ratings Limited;
"Fixed Coupon Amount" has the meaning given in the relevant Final Terms;
"Fixed Rate Covered Bonds" means Covered Bonds specified as such in the relevant Final
Terms;
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"Floating Rate Covered Bonds" means Covered Bonds specified as such in the relevant Final
Terms;
"Global Covered Bonds" means Covered Bonds which are in temporary global or permanent
global form or which are Registered Bonds in global form;
"Global Registered Bond" means a global Covered Bond in registered form;
"Greek Charged Property" means all the property of the Issuer which is subject to the Greek
Security;
"Greek Covered Bond Legislation" means Article 91 together with the Secondary Covered
Bond Legislation;
"Greek Security" means the Statutory Pledge;
"Hedge Collateral Ledger" means a ledger in the books of the Issuer so named in respect of
each Hedging Agreement and maintained in relation to the Transaction Account;
"Hedging Counterparty" means any Interest Rate Swap Provider or Covered Bond Swap
Provider;
"Incorporated Terms Memorandum" means the memorandum so named dated on or about the
Programme Closing Date and made between each of the parties to the Transaction Documents;
"Indebtedness" means any indebtedness of any Person for money borrowed or raised including
(without limitation) any indebtedness for or in respect of:
(i)
(ii)
(iii)
(iv)
(v)
amounts raised by acceptance under any acceptance credit facility;
amounts raised under any note purchase facility or the issue of bonds, notes, debentures,
loan stock or any similar instrument;
the amount of any liability in respect of leases or hire purchase contracts which would, in
accordance with applicable law and generally accepted accounting principles, be treated
as finance or capital leases;
the amount of any liability in respect of any purchase price for assets or services the
payment of which is deferred for a period in excess of 60 days; and
amounts raised under any other transaction (including, without limitation, any forward
sale or purchase agreement) having the commercial effect of a borrowing;
"Index Linked Interest Covered Bonds" means Covered Bonds specified as such in the
relevant Final Terms;
"Indexed Valuation" means any valuation used by applying the Propindex, the Bank of Greece
Index or any other recognised indexation methods;
"Individual Covered Bond Certificate" means individual Covered Bond certificates in
registered form;
"Initial Advance" means the initial amount of the Loan advanced to the Borrower;
"Instalment Covered Bonds" means Covered Bonds which will be redeemed in the Instalment
Amounts and on the Instalment Dates specified in the applicable Final Terms;
"Instrumentholders" means the persons who for the time being are the holders of the
Instruments;
"Instruments" means the Temporary Global Covered Bonds, the Permanent Global Covered
Bonds, the Global Registered Bonds, the Individual Covered Bond Certificates, the Definitive
Covered Bonds, the Coupons, the Receipts and the Talons and "Instrument" means any of them;
- 50 -

"Interest Amount" means:
(a)
(b)
in respect of a Covered Bond for any Interest Period the amount of interest in respect of
such Covered Bond for such Interest Period; and
in relation to a Series of Covered Bonds for any Interest Period, the aggregate amount in
paragraph (a) above, for all Covered Bonds in such Series for such Interest Period;
"Interest Commencement Date" means in the case of interest bearing Covered Bonds, the date
specified in the applicable Final Terms from (and including) which the relevant Covered Bonds
will accrue interest;
"Interest Determination Date" has the meaning given in the relevant Final Terms;
"Interest Payment Date" means the Specified Interest Payment Date or if there is no Specified
Interest Payment Date, the date which falls in the Specified Period after the preceding Interest
Payment Date, or in the case of the first Interest Payment Date, the Interest Commencement
Date;
"Interest Period" means the period from (and including) an Interest Payment Date (or the
Interest Commencement Date) to (but excluding) the next (or first) Interest Payment Date;
"Interest Rate" means the interest rate payable from time to time in respect of Fixed Rate
Covered Bonds, Floating Rate Covered Bonds and Variable Interest Covered Bonds, as
determined in, or as determined in the manner specified in, the applicable Final Terms;
"Interest Rate Swap Agreements" means the interest rate swap agreements entered into
between the Issuer and an Interest Rate Swap Provider in relation to the Covered Bonds;
"Interest Rate Swap Provider" means a provider of an interest rate swap to the Issuer to hedge
the Issuer against certain interest rate risks;
"ISDA Definitions" means the 2006 ISDA Definitions, as published by the International Swaps
and Derivatives Association, Inc. and as amended and updated from time to time;
"Issue Date" has the meaning given in the relevant Final Terms;
"Issue Price" has the meaning given in the relevant Final Terms;
"Issuer" means Marfin Egnatia Bank S.A.;
"Issuer Insolvency Event" means any of the following events occurs:
(a)
(b)
(c)
the Issuer is declared insolvent by a court of competent jurisdiction or is unable or
admits its inability to pay its debts as they fall due (after taking into account any grace
period or permitted deferral) or suspends making payments on any of its debts; or an
administrator, receiver, receiver and manager, administrative receiver or liquidator of the
Issuer or of the assets and/or revenues of the Issuer is appointed (or application for any
such appointment is made); or the Issuer makes a general assignment or an arrangement
or composition with or for the benefit of its creditors or declares a moratorium in respect
of any of its indebtedness or any guarantee of any indebtedness given by it; or the Issuer
ceases to carry on all or substantially all of its business;
an order is made or an effective resolution is passed for the winding up, liquidation or
dissolution of the Issuer;
a petition is made for a declaration that the Issuer is bankrupt or to place it under
mandatory management or any action or step has been taken by any creditor or any other
person to initiate any collective insolvency enforcement procedure under the Greek
Bankruptcy Code (L. 3588/2007) and Art. 63 and 68 of the Greek Banking Act (L.
3601/2007) unless such petition is frivolous or vexatious being contested in good faith
by the Issuer, with due diligence, in appropriate proceedings, for which the Issuer can
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demonstrate that adequate reserves have been made and is discharged or struck out as
soon as practically possible after its commencement;
(d)
(e)
(f)
(g)
(h)
the value of the assets of the Issuer is less than the amount of its liabilities, taking into
account its contingent and prospective liabilities;
the commencement of negotiations with one or more creditors of the Issuer with a view
to rescheduling any indebtedness of the Issuer other than in connection with any
refinancing in the ordinary course of business;
the making of an arrangement, composition, or compromise (whether by way of
voluntary arrangement, scheme of arrangement or otherwise) with any creditor of the
Issuer, a reorganisation of the Issuer, a conveyance to or assignment for the creditors of
the Issuer generally or the making of an application to a court of competent jurisdiction
for protection from the creditors of the Issuer generally other than in connection with any
refinancing in the ordinary course of business;
any distress, execution, attachment or other process being levied or enforced or imposed
upon or against the whole or any part of the undertaking or assets of the Issuer; or
any event occurs which under the laws of any other jurisdiction has an analogous effect
to any of the events referred to in paragraphs (a) to (g) inclusive above;
"Liabilities" means in respect of any person, any losses, liabilities, damages, costs, awards,
expenses (including but not limited to properly incurred legal fees) and penalties incurred by that
person together with any VAT thereon;
"Loans" means any loans or credit facilities provided by the Issuer which are subject to the
statutory pledge under Greek law in favour of the Secured Creditors;
"Long Maturity Covered Bond" means a Fixed Rate Covered Bond (other than a Fixed Rate
Covered Bond which on issue had a Talon attached) whose nominal amount on issue is less than
the aggregate interest payable thereon provided that such Covered Bond shall cease to be a Long
Maturity Covered Bond on the Interest Payment Date on which the aggregate amount of interest
remaining to be paid after that date is less than the Principal Amount Outstanding of such
Covered Bond;
"Margin" has the meaning given in the relevant Final Terms;
"Marketable Assets" means marketable assets defined as such in the Act of the Monetary Policy
Council 54/27-2-2000 and being the securities included in the list of acceptable securities
published by the European Central Bank on its website, which are deemed as accepted by the
Bank of Greece and may be used as security for monetary policy transactions of any nature
whatsoever and the granting of daylight credits and which satisfy the requirements of the
Secondary Covered Bond Legislation;
"Master Execution Deed" means the deed so named entered into, inter alia, by the Issuer and
the Trustee on the Programme Closing Date;
"Maximum Interest Rate" has the meaning given in the relevant Final Terms;
"Maximum Redemption Amount" has the meaning given in the relevant Final Terms;
"Meeting" means a meeting of Covered Bondholders of one or more Series (whether originally
convened or resumed following an adjournment);
"Minimum Interest Rate" has the meaning given in the relevant Final Terms;
"Minimum Redemption Amount" has the meaning given in the relevant Final Terms;
"Moody's" means Moody's Investors Service Limited;
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"Moody's Issuer Downgrade Event" means the downgrading of the Issuer's rating below Baa2
by Moody's;
"Negative Carry Factor" means a percentage calculated by reference to the weighted average
margin of the Covered Bonds and will, in any event, not be less than 0.90 per cent;
"Notice of Default" means a notice delivered by the Trustee to the Issuer in accordance with
Condition 12 (Events of Default) which declares the Covered Bonds to be immediately due and
payable;
"Notices Condition" means Condition 21 (Notices);
"Optional Redemption Amount" has the meaning given in the relevant Final Terms;
"Optional Redemption Date" has the meaning given in the relevant Final Terms;
"Outstanding Principal Balance" means in relation to a Loan at any given date, the aggregate
(without double counting) of:
(a)
(b)
(c)
the Initial Advance;
Capitalised Expenses; and
Capitalised Arrears,
less any prepayment, repayment or payment of any of the foregoing made on or prior to such
date;
"Participating Member State" means a Member State of the European Communities which
adopts the euro as its lawful currency in accordance with the Treaty;
"Partly Paid Covered Bonds" means Covered Bonds specified as such in the relevant Final
Terms;
"Paying Agents" means the paying agents named in the Agency Agreement together with any
successor or additional paying agents appointed from time to time in connection with the
Covered Bonds under the Agency Agreement;
"Payments Priorities" means the Programme Payment Date Payments Priorities and the Post
Event of Default Priority of Payments, as the case may be;
"Permanent Global Covered Bonds" means the Covered Bonds in permanent global form;
"Person" means any individual, company, corporation, firm, partnership, joint venture,
association, organisation, state or agency of a state or other entity, whether or not having separate
legal personality;
"Post Event of Default Priority of Payments" means the provisions relating to the order of
priority of payments set out in Paragraph 21 of Schedule 1 to the Servicing Deed;
"Pre-Notation" means a judicial mortgage pre-notation under Articles 1274 et seq. of the Greek
Civil Code granted in respect of a Property;
"Principal Amount Outstanding" means in respect of a Covered Bond on any day the principal
amount of that Covered Bond on the relevant Issue Date thereof less principal amounts received
by the relevant Covered Bondholder in respect thereof on or prior to that day, and the Principal
Amount Outstanding of a Covered Bond that has been cancelled by the Issuer shall be zero and
in the case of a Zero Coupon Bond it shall be an amount equal to the sum of:
(a)
the Reference Price; and
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(b)
the product of the Accrual Yield (compounded annually) being applied to the Reference
Price on the basis of the relevant Day Count Fraction from (and including) the Issue
Date to (but excluding) the relevant date;
"Principal Financial Centre" means, in relation to any currency, the principal financial centre
for that currency provided, however, that:
(a)
(b)
in relation to euro, it means the principal financial centre of such Member State of the
European Communities as is selected (in the case of a payment) by the payee or (in the
case of a calculation) by the Calculation Agent; and
in relation to Australian dollars, it means either Sydney or Melbourne and, in relation to
New Zealand dollars, it means either Wellington or Auckland; in each case as is selected
(in the case of a payment) by the payee or (in the case of a calculation) by the
Calculation Agent;
"Principal Paying Agent" means The Bank of New York Mellon, London Branch in its capacity
as the principal paying agent in respect of the Covered Bonds;
"Programme" means the Issuer's programme for the issuance of Covered Bonds;
"Programme Closing Date" means 17 November 2008;
"Programme Payment Date" means the 18th day of February, May, August and November
commencing on 18 February 2009 and if such day is not an Athens Business Day the first Athens
Business Day thereafter;
"Programme Payment Date Payments Priorities" means the provisions relating to the order of
priority of payments set out in Paragraph 20 of Schedule 1 to the Servicing Deed;
"Property" means the property or properties securing each Loan and which is, under the terms of
the relevant Loan Asset Agreement to be subject to a Pre-Notation in favour of the Issuer;
"Rating Agencies" means Fitch and Moody's;
"Rating Agency Confirmation"" means written confirmation from the Rating Agencies that any
particular action proposed to be taken will not adversely affect or cause to be withdrawn the then
current ratings of the Covered Bonds;
"Receiptholders" means the holders of the Receipts;
"Receipts" means the principal receipts related to the Covered Bonds;
"Receiver" means any receiver, manager, receiver and manager or administrative receiver
appointed in respect of the Issuer by the Trustee;
"Redemption Amount" means, as appropriate, the Final Redemption Amount, the Early
Redemption Amount, the Optional Redemption Amount or such other amount in the nature of a
redemption amount as may be specified in, or determined in accordance with the provisions of,
the relevant Final Terms;
"Reference Price" has the meaning given in the relevant Final Terms;
"Reference Banks" has the meaning given in the relevant Final Terms or, if none, four major
banks selected by the Calculation Agent in the market that is most closely connected with the
Reference Rate;
"Reference Rate" has the meaning given in the relevant Final Terms;
"Registered Bonds" means Covered Bonds issued in registered form;
"Registrar" means The Bank of New York (Luxembourg) S.A. in its capacity as the registrar in
respect of the Covered Bonds;
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"Relevant Date" means, in relation to any payment, whichever is the later of (a) the date on
which the payment in question first becomes due and (b) if the full amount payable has not been
received in the Principal Financial Centre of the currency of payment by the Principal Paying
Agent on or prior to such due date, the date on which (the full amount having been so received)
notice to that effect has been given to the Covered Bondholders;
"Relevant Financial Centre" has the meaning given in the relevant Final Terms;
"Relevant Time" has the meaning given in the relevant Final Terms;
"Reserved Matter" means any proposal:
(a)
(b)
(c)
(d)
(e)
(f)
to change any date fixed for payment of principal or interest in respect of the Covered
Bonds, to reduce the amount of principal or interest payable on any date in respect of the
Covered Bonds or to alter the method of calculating the amount of any payment in
respect of the Covered Bonds;
(except in accordance with Condition 22 (Substitution of Issuer)) to effect the exchange,
conversion or substitution of the Covered Bonds of any Series for, or the conversion of
such Covered Bonds into, shares, bonds or other obligations or securities of the Issuer or
any other person or body corporate formed or to be formed;
to change the currency of payments under the Covered Bonds;
to alter the priority of payment of interest or principal or any other amount in respect of
the Covered Bonds under the Payments Priorities;
to change the quorum requirements relating to meetings or the majority required to pass
an Extraordinary Resolution; or
to amend this definition.
"Screen" means the page, section or other part of a particular information service (including,
without limitation, Reuters) specified as the Screen in the relevant Final Terms, or such other
page, section or other part as may replace it on that information service or such other information
service, in each case, as may be nominated by the entity providing or sponsoring the information
appearing there for the purpose of displaying rates or prices comparable to the Reference Rate;
"Screen Rate Determination" means, if specified as applicable in the applicable Final Terms
Document, the manner in which the Interest Rate on Floating Rate Covered Bonds is to be
determined in accordance with Condition 7.7(b) (Screen Rate Determination);
"Secondary Covered Bond Legislation" means the Act of the Governor of the Bank of Greece
No. 2598/2007;
"Secured Amount" means the aggregate of all monies and Liabilities which from time to time
are or may become due, owing or payable by the Issuer to each of the Secured Creditors under
the Covered Bonds or the Transaction Documents;
"Secured Creditors" means the Trustee (in its capacity as a creditor of the Issuer), the Covered
Bondholders, any Receiver or liquidator of the Issuer (in its capacity as a creditor of the Issuer),
the Hedging Counterparties, the Agents, the Transaction Account Bank, the Servicer, the Credit
Facility Provider and the Asset Monitor and any successor(s) to such parties from time to time;
"Security" means the security created in favour of the Trustee by the Issuer pursuant to the
Security Deed and the Greek Covered Bond Legislation;
"Security Deed" means the deed so named dated on or about the Programme Closing Date
between the Issuer and the Trustee;
"Series" means a Tranche of Covered Bonds together with any further Tranche or Tranches of
Covered Bonds expressed to be consolidated and form a single series with the Covered Bonds of
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the original Tranche and the terms of which are identical (save for the Issue Date and/or the
Interest Commencement Date but including as to whether or not the Covered Bonds are listed);
"Servicer" means Marfin Egnatia Bank S.A. or any other entity acting as servicer in accordance
with the terms of the Servicing Deed;
"Servicing Deed" means the deed so named entered into by the Issuer, the Servicer and the
Trustee on the Programme Closing Date;
"Specified Currency" has the meaning given in the relevant Final Terms;
"Specified Denomination(s)" has the meaning given in the relevant Final Terms;
"Specified Interest Payment Date" has the meaning given in the relevant Final Terms;
"Specified Office" means in relation to any Agent:
(a)
(b)
the office specified against its name in Schedule 3 (Notices Details) to the Incorporated
Terms Memorandum; or
such other office as such Agent may specify in accordance with Clause 17.9 (Changes in
Specified Offices) of the Agency Agreement;
"Specified Period" has the meaning given in the relevant Final Terms;
"Statutory Pledge" means a statutory pledge pursuant to paragraph 4 of Article 91, created over
the Cover Pool;
"Statutory Tests" means the tests set out in the Secondary Covered Bond Legislation;
"Stock Exchange" means the Irish Stock Exchange;
"Swap Rate" means in relation to a Covered Bond or Series thereof, the exchange rate specified
in the relevant Covered Bond Swap Agreement if applicable or otherwise the prevailing market
spot rate at such time as determined by the Calculation Agent;
"Talons" means the talons for further Receipts and further Coupons attached to the Definitive
Covered Bonds on issue;
"TARGET2" means the Trans-European Automated Real-Time Gross Settlement Express
Transfer payment system which utilises a single shared platform and which was launched on 19
November 2007;
"TARGET Settlement Day" means any day on which TARGET2 is open for the settlement of
payments in euro;
"Tax" shall be construed so as to include any present or future tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature whatsoever (including any penalty or interest payable
in connection with any failure to pay or any delay in paying any of the same, but excluding taxes
on net income) imposed or levied by or on behalf of any tax authority and "Taxes", "taxation",
"taxable" and comparable expressions shall be construed accordingly;
"Temporary Global Covered Bonds" means the Covered Bonds in temporary global form;
"Test Event" means any failure to satisfy any Statutory Test on any Calculation Date, or on the
monthly date when checked by the Servicer, which is not remedied within 5 Business Days;
"Tranche" means Covered Bonds which are identical in all respects;
"Transaction Account" means the account so named in the name of the Issuer and maintained at
the Transaction Account Bank (or such other bank to which the Transaction Account may be
transferred and operated by the Servicer) or such other account or accounts as may for the time
- 56 -

eing be in addition thereto or substituted therefor in accordance with the provisions of the
Transaction Account Agreement;
"Transaction Account Agreement" means the agreement to be entered into on the Programme
Closing Date and made between the Transaction Account Bank, the Issuer, the Servicer and the
Trustee;
"Transaction Account Bank" means The Bank of New York Mellon, London Branch, in its
capacity as Transaction Account Bank under the Transaction Account Agreement;
"Transaction Documents" means the Trust Deed, the Security Deed, the Agency Agreement,
the Dealer Agreement, the Incorporated Terms Memorandum, the Transaction Account
Agreement, the Interest Rate Swap Agreements, the Covered Bond Swap Agreements, the
Closing Arrangements Deed, the Master Execution Deed, the Servicing Deed, the Asset Monitor
Agreement, the Credit Facility Agreement and any other agreement or document entered into
from time to time by the Issuer pursuant thereto;
"Transaction Parties" means the Issuer, the Servicer, the Trustee, the Arrangers, the Dealers,
the Credit Facility Provider, each Hedging Counterparty, the Transaction Account Bank, the
Calculation Agent, the Transfer Agent, the Principal Paying Agent, the Asset Monitor, the
Registrar and any successor(s) to such parties from time to time;
"Transfer Agent" means The Bank of New York Mellon, London Branch in its capacity as the
transfer agent in respect of the Covered Bonds;
"Treaty" means the Treaty establishing the European Community, as amended.
"Trust Deed" means the deed so named dated on or about the Programme Closing Date between
the Issuer and the Trustee;
"Trust Documents" means the Trust Deed, the Security Deed and (unless the context otherwise
requires) includes any deed or other document executed in accordance with the provisions of the
Trust Deed or the Security Deed and expressed to be supplemental thereto;
"Trustee" means The Bank of New York Mellon (International) Limited, in its capacity as
trustee for the Covered Bondholders and the other Secured Creditors under the Trust Documents
and any successor from time to time;
"Variable Interest Covered Bonds" means Index Linked Interest Covered Bonds, Dual
Currency Interest Covered Bonds and other Covered Bonds (excluding Floating Rate Covered
Bonds) where the Interest Rate is variable; and
"Zero Coupon Covered Bonds" means Covered Bonds specified as such in the relevant Final
Terms;
3. Form, Denomination and Title
3.1 Bearer Bonds: Bearer Bonds are in the Specified Denomination(s) with Coupons and, if
specified in the relevant Final Terms, Talons attached at the time of issue. In the case of a Series
of Bearer Bonds with more than one Specified Denomination, Bearer Bonds of one Specified
Denomination will not be exchangeable for Bearer Bonds of another Specified Denomination.
3.2 Title to Bearer Bonds: Title to Bearer Bonds and the Coupons will pass by delivery. In the case
of Bearer Bonds, "Holder" means the holder of such Bearer Bond and "Covered Bondholder"
and "Couponholder" shall be construed accordingly.
3.3 Registered Bonds: Registered Bonds are in the Specified Denomination(s), which may include a
minimum denomination specified in the relevant Final Terms and higher integral multiples of a
smaller amount specified in the relevant Final Terms.
3.4 Title to Registered Bonds: The Registrar will maintain the register in accordance with the
provisions of the Agency Agreement. A certificate (each, a "Bond Certificate") will be issued to
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each Holder of Registered Bonds in respect of its registered holding. Each Bond Certificate will
be numbered serially with an identifying number which will be recorded in the Register. In the
case of Registered Bonds, "Holder" means the person in whose name such Registered Bond is
for the time being registered in the Register (or, in the case of a joint holding, the first named
thereof) and "Covered Bondholder" shall be construed accordingly.
3.5 Ownership: The Holder of any Covered Bond or Coupon shall (except as otherwise required by
law) be treated as its absolute owner for all purposes (whether or not it is overdue and regardless
of any notice of ownership, trust or any other interest therein, any writing thereon or, in the case
of Registered Bonds, on the Bond Certificate relating thereto (other than the endorsed form of
transfer) or any notice of any previous loss or theft thereof) and no Person shall be liable for so
treating such Holder. No person shall have any right to enforce any term or condition of any
Bond under the Contracts (Rights of Third Parties) Act 1999.
3.6 Transfers of Registered Bonds: Subject to Conditions 3.9 (Closed periods) and 3.10 (Regulations
concerning transfers and registration) below, a Registered Bond may be transferred upon
surrender of the relevant Bond Certificate, with the endorsed form of transfer duly completed, at
the Specified Office of the Registrar or any Transfer Agent, together with such evidence as the
Registrar or (as the case may be) such Transfer Agent may reasonably require to prove the title of
the transferor and the authority of the individuals who have executed the form of transfer;
provided, however, that a Registered Bond may not be transferred unless the principal amount of
Registered Bonds transferred and (where not all of the Registered Bonds held by a Holder are
being transferred) the principal amount of the balance of Registered Bonds not transferred are
Specified Denominations. Where not all the Registered Bonds represented by the surrendered
Bond Certificate are the subject of the transfer, a new Bond Certificate in respect of the balance
of the Registered Bonds will be issued to the transferor.
3.7 Registration and delivery of Bond Certificates: Within five business days of the surrender of a
Bond Certificate in accordance with Condition 3.6 (Transfers of Registered Bonds) above, the
Registrar will register the transfer in question and deliver a new Bond Certificate of a like
principal amount to the Registered Bonds transferred to each relevant Holder at its Specified
Office or (as the case may be) the Specified Office of any Transfer Agent or (at the request and
risk of any such relevant Holder) by uninsured first class mail (airmail if overseas) to the address
specified for the purpose by such relevant Holder. In this paragraph, "business day" means a
day on which commercial banks are open for general business (including dealings in foreign
currencies) in the city where the Registrar or (as the case may be) the relevant Transfer Agent has
its Specified Office.
3.8 No charge: The transfer of a Registered Bond will be effected without charge by or on behalf of
the Issuer or the Registrar or any Transfer Agent but against such indemnity as the Registrar or
(as the case may be) such Transfer Agent may require in respect of any tax or other duty of
whatsoever nature which may be levied or imposed in connection with such transfer.
3.9 Closed periods: Holders of Registered Bonds may not require transfers to be registered during
the period of 15 days ending on the due date for any payment of principal or interest in respect of
the Registered Bonds.
3.10 Regulations concerning transfers and registration: All transfers of Registered Bonds and entries
on the Register are subject to the detailed regulations concerning the transfer of Registered Bonds
scheduled to the Agency Agreement. The regulations may be changed by the Issuer with the
prior written approval of the Registrar. A copy of the current regulations will be mailed (free of
charge) by the Registrar to any Covered Bondholder who requests in writing a copy of such
regulations.
4. Status and Ranking of the Covered Bonds
4.1 Status: The Covered Bonds constitute secured obligations of the Issuer.
4.2 Ranking: The Covered Bonds of all Series will at all times rank without preference or priority
pari passu amongst themselves.
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4.3 Sole Obligations: The Covered Bonds and the Coupons are obligations solely of the Issuer and
not the obligations of or guaranteed by any other party.
4.4 Payments Priorities: Prior to the delivery of a Notice of Default, the Issuer is required to make
any payments in connection with the Covered Bonds in accordance with the Programme Payment
Date Payments Priorities and thereafter in accordance with the Post Event of Default Priority of
Payments.
5. Security
5.1 Security: As continuing security for the payment or discharge of the Secured Amounts, and
subject always to the right of redemption of the Issuer, the Issuer will, with full title guarantee
create in favour of the Trustee, for itself and on trust for the Secured Creditors, in accordance
with the terms of the Security Deed:
(a)
(b)
(c)
(to the extent not subject to the Statutory Pledge) a first fixed charge over the benefit of
each Authorised Investment and each Marketable Asset (which may take effect as a
floating charge);
a first fixed charge over the benefit of the Transaction Account to the extent such
account is maintained in England (which may take effect as a floating charge); and
an assignment by way of first fixed security of the benefit of each Transaction Document
governed by English law (other than the Trust Documents and the Dealer Agreement).
5.2 Statutory Pledge: In addition the Statutory Pledge also provides continuing security for the
payment or discharge of the Secured Amounts.
5.3 Enforcement: The Security shall become enforceable upon the delivery by the Trustee of a Notice
of Default in accordance with and subject to Condition 13 (Enforcement).
6. Covenants of the Issuer
So long as any Covered Bond remains outstanding, the Issuer shall comply with all the covenants
of the Issuer, as set out in the Transaction Documents.
7. Interest
7.1 Accrual: Each Covered Bond (other than Zero Coupon Covered Bonds) bears interest on its
Principal Amount Outstanding from (and including) the Interest Commencement Date. Interest
(if any) will cease to accrue on each Covered Bond (or in the case of the redemption of part only
of a Covered Bond, that part of such Covered Bond) on the due date for redemption thereof
unless, upon due presentation thereof, payment of principal is improperly withheld or refused or
default is otherwise made in respect of payment, in which event, interest will continue to accrue
(both before and after judgment) until whichever is the earlier of:
(a)
(b)
the day on which all sums due in respect of such Covered Bond up to that day are
received by or on behalf of the relevant Covered Bondholder; and
the day which is seven days after the Principal Paying Agent or the Trustee has notified
the Covered Bondholders of such class that it has received all sums due in respect of the
Covered Bonds of such class up to such seventh day (except to the extent that there is
any subsequent default in payment).
7.2 Interest Payments: Interest on each Covered Bond (other than Zero Coupon Covered Bonds) is
payable in arrear on each Interest Payment Date, in an amount equal to the Interest Amount in
respect of such Covered Bond for the Interest Period ending on the day immediately preceding
such Interest Payment Date.
7.3 Interest Rate: The Interest Rate payable from time to time in respect of the Covered Bonds will
be determined in the manner specified in the applicable Final Terms.
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7.4 Calculation period of less than 1 year: Whenever it is necessary to compute an amount of
interest in respect of any Covered Bond for a period of less than a full year, such interest shall be
calculated on the basis of the applicable Day Count Fraction, rounding the resulting figure to the
nearest sub-unit of the Specified Currency (half a sub-unit being rounded upwards).
7.5 Fixed Coupon Amount: The amount of interest payable in respect of each Fixed Rate Covered
Bond:
(a)
(b)
(c)
for any Interest Period shall be the relevant Fixed Coupon Amount and, if the Fixed Rate
Covered Bonds are in more than one Specified Denomination, shall be the relevant
Fixed Coupon Amount in respect of the relevant Specified Denomination;
for any period for which a Fixed Coupon Amount is not specified, the Interest Amount
will be determined by applying the Interest Rate to the Calculation Amount, multiplying
the product by the relevant Day Count Fraction, rounding the resulting figure to the
nearest sub-unit of the Specified Currency (half a sub-unit being rounded upwards) and
multiplying such rounded figure by a fraction equal to the Specified Denomination of
such Covered Bond divided by the Calculation Amount. For this purpose a "sub-unit"
means, in the case of any currency other than euro, the lowest amount of such currency
that is available as legal tender in the country of such currency and, in the case of euro,
means one cent; and
will on any Interest Payment Date, if so specified in the applicable Final Terms, amount
to the broken amount specified in the relevant Final Terms.
7.6 Partly Paid Covered Bond Provisions: In the case of Partly Paid Covered Bonds (other than
Partly Paid Covered Bonds which are Zero Coupon Covered Bonds), interest will accrue on the
paid up nominal amount of such Covered Bonds or as otherwise specified in the applicable Final
Terms.
7.7 Floating Rate Covered Bond Interest Rate Provisions: The Interest Rate payable from time to
time in respect of Floating Rate Covered Bonds will be determined as follows:
(a)
ISDA Determination: Where "ISDA Determination" is specified in the applicable Final
Terms, the Interest Rate will be the relevant ISDA Rate plus or minus the Margin (if
any). For the purposes of this subparagraph (A), "ISDA Rate" for an Interest Period
means a rate equal to the Floating Rate (as defined in the ISDA Definitions) that would
be determined by the Principal Paying Agent or other person specified in the applicable
Final Terms under an interest rate swap transaction if that person were acting as
Calculation Agent for that swap transaction under the terms of an agreement
incorporating the ISDA Definitions and under which:
(i)
(ii)
(iii)
the Floating Rate Option (as defined in the ISDA Definitions) is as specified in
the applicable Final Terms;
the Designated Maturity is as specified in the applicable Final Terms; and
the relevant Reset Date (as defined in the ISDA Definitions) is either (I) if the
applicable Floating Rate Option is based on the London inter-bank offered rate
("LIBOR") or on the Euro-zone inter-bank offered rate ("EURIBOR"), the first
day of that Interest Period or (II) in any other case, as specified in the applicable
Final Terms.
(b) Screen Rate Determination: Where Screen Rate Determination is specified in the
applicable Final Terms, the Interest Rate for each Interest Period will be the Reference
Rate plus or minus the Margin (if applicable as indicated in the Final Terms).
The Reference Rate will be determined on the following basis:
(i)
if the Reference Rate is a composite quotation or customarily supplied by one
entity, the Calculation Agent will determine the Reference Rate as being the rate
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which appears on the Screen as of the Relevant Time on the relevant Interest
Determination Date;
(ii)
(iii)
in any other case, the Calculation Agent will determine the Reference Rate as
being the arithmetic mean of the rates which appear on the Screen as of the
Relevant Time on the relevant Interest Determination Date;
if, in the case of (i) above, such rate does not appear on that page or, in the case
of (ii) above, fewer than two such rates appear on that page or if, in either case,
the Screen is unavailable, the Calculation Agent will:
(A)
(B)
request the principal Relevant Financial Centre office of each of the
Reference Banks to provide a quotation of the Reference Rate at
approximately the Relevant Time on the Interest Determination Date to
prime banks in the Relevant Financial Centre interbank market in an
amount that is representative for a single transaction in that market at
that time; and
determine the arithmetic mean of such quotations; and
(iv)
if fewer than two such quotations are provided as requested, the Calculation
Agent will determine the arithmetic mean of the rates (being the nearest to the
Reference Rate, as determined by the Calculation Agent) quoted by major banks
in the Principal Financial Centre of the Specified Currency, selected by the
Calculation Agent, at approximately 11.00 a.m. (local time in the Principal
Financial Centre of the Specified Currency) on the first day of the relevant
Interest Period for loans in the Specified Currency to leading European banks
for a period equal to the relevant Interest Period and in an amount that is
representative for a single transaction in that market at that time,
provided, however, that if the Calculation Agent is unable to determine a rate or (as the
case may be) an arithmetic mean in accordance with the above provisions in relation to
any Interest Period, the Reference Rate applicable to the Covered Bonds during such
Interest Period will be the Reference Rate in respect of the preceding Interest Period.
7.8 Determination of Interest Rate and calculation of Interest Amounts: The Principal Paying Agent,
or the Calculation Agent in the case of Variable Interest Covered Bonds, will on or as soon as
practicable after each Interest Determination Date, determine the Interest Rate and Interest
Amount for the relevant Interest Period by applying the Interest Rate to the Calculation Amount,
multiplying the product by the relevant Day Count Fraction, rounding the resulting figure to the
nearest sub-unit of the Specified Currency (half a sub-unit being rounded upwards) and
multiplying such rounded figure by a fraction equal to the Specified Denomination of such
Covered Bond divided by the Calculation Amount. For this purpose a "sub-unit" means, in the
case of any currency other than euro, the lowest amount of such currency that is available as legal
tender in the country of such currency and, in the case of euro, means one cent. In the case of
Variable Interest Covered Bonds, the Calculation Agent will notify the Principal Paying Agent of
the Interest Rate and Interest Amount for the relevant Interest Period as soon as practicable after
calculating the same.
7.9 Minimum Interest Rate: If the applicable Final Terms for a Floating Rate Covered Bond or a
Variable Interest Covered Bond specifies a Minimum Interest Rate, then, in the event that the
Interest Rate determined in accordance with the provisions above is less than such Minimum
Interest Rate for the relevant Interest Period, the Interest Rate shall be such Minimum Interest
Rate.
7.10 Maximum Interest Rate: If the applicable Final Terms for a Floating Rate Covered Bond or a
Variable Interest Covered Bond specifies a Maximum Interest Rate, then, in the event that the
Interest Rate determined in accordance with the provisions above is greater than such Maximum
Interest Rate for the relevant Interest Period, the Interest Rate shall be such Maximum Interest
Rate.
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7.11 Notification of Interest Rate and Interest Amounts: The Calculation Agent will cause the Interest
Rate and Interest Amount for each Interest Period and the relevant Interest Payment Date to be
notified to the Issuer, the Trustee, the Paying Agents and to any stock exchange or other relevant
competent authority or quotation system on which the relevant Covered Bonds are for the time
being listed, quoted and/or traded or by which they have been admitted to listing or trading and to
be published in accordance with the Notices Condition as soon as possible after their
determination but in no event later than the first day of the relevant Interest Period. Each Interest
Amount and Interest Payment Date so notified may subsequently be amended (or appropriate
alternative arrangements made by way of adjustment) without notice in the event of an extension
or shortening of the Interest Period. Any such amendment or alternative arrangements will be
promptly notified to the Trustee and each stock exchange or other relevant authority on which the
relevant Covered Bonds are for the time being listed, quoted and/or traded or by which they have
been admitted to listing or trading and to Covered Bondholders in accordance with the Notices
Condition.
7.12 Determination or Calculation by Trustee: If for any reason at any relevant time after the Issue
Date, the Principal Paying Agent or, as the case may be, the Calculation Agent defaults in its
obligation to determine the Interest Rate or the Principal Paying Agent defaults in its obligation
to calculate any Interest Amount, the Trustee may, without any liability accruing as a result,
determine the Interest Rate and the Interest Amount as, in its absolute discretion (having such
regard as it shall think fit to the foregoing provisions of this Condition, but subject always to any
Minimum Interest Rate or Maximum Interest Rate specified in the applicable Final Terms), it
shall deem fair and reasonable in all the circumstances. In making any such determination or
calculation, the Trustee may appoint and rely on a determination or calculation by a calculation
agent (which shall be an investment bank or other suitable entity of international repute). Each
such determination or calculation shall be deemed to have been made by the Principal Paying
Agent or the Calculation Agent, as the case may be.
7.13 Certificates to be final: All certificates, notifications, communications, opinions, determinations,
calculations, quotations and decisions given, expressed, made or obtained for the purposes of the
provisions of this Condition, whether by the Principal Paying Agent, the Calculation Agent or the
Trustee shall (in the absence of wilful default, gross negligence, fraud or manifest error) be
binding on the Issuer, the Principal Paying Agent, the Calculation Agent, the other Paying
Agents, the Trustee and all Instrumentholders and (in the absence of wilful default, gross
negligence or fraud) no liability to the Issuer or the Instrumentholders shall attach to the Principal
Paying Agent, the Calculation Agent or the Trustee in connection with the exercise or non
exercise by it of its powers, duties and discretions pursuant to such provisions.
7.14 Business Day, Business Day Convention, Day Count Fractions and other adjustments
(a)
In these Conditions, "Business Day" means a day which is both:
(i)
(ii)
a day on which commercial banks and foreign exchange markets settle
payments and are open for general business (including dealing in foreign
exchange and foreign currency deposits) in London and Athens and any
Additional Business Centre specified in the applicable Final Terms; and
in relation to any sum (A) payable in euro, a TARGET Settlement Day and a
day on which commercial banks and foreign exchange markets settle payments
generally in each (if any) Additional Business Centre; or (B) payable in a
currency other than euro, a day on which commercial banks and foreign
exchange markets settle payments generally in the Principal Financial Centre of
the relevant currency and in each (if any) Additional Business Centre.
(b)
If a "Business Day Convention" is specified in the applicable Final Terms and (x) if
there is no numerically corresponding day in the calendar month in which an Interest
Payment Date should occur or (y) if any Interest Payment Date would otherwise fall on a
day which is not a Business Day, then, if the Business Day Convention specified is:
(i)
the "Floating Rate Convention", such Interest Payment Date (1) in the case of
(x) above, shall be the last day that is a Business Day in the relevant month and
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the provisions of (II) below shall apply, or (2) in the case of (y) above, shall be
postponed to the next day which is a Business Day unless it would thereby fall
into the next calendar month, in which event (I) such Interest Payment Date
shall be brought forward to the immediately preceding Business Day, and (II)
each subsequent Interest Payment Date shall be the last Business Day in the
month which falls the Specified Period after the preceding applicable Interest
Payment Date; or
(ii)
(iii)
(iv)
(v)
the "Following Business Day Convention", such Interest Payment Date shall
be postponed to the next day which is a Business Day; or
the "Modified Following Business Day Convention", such Interest Payment
Date shall be postponed to the next day which is a Business Day unless it would
thereby fall into the next calendar month, in which event such Interest Payment
Date shall be brought forward to the immediately preceding Business Day; or
the "Preceding Business Day Convention", such Interest Payment Date shall
be brought forward to the immediately preceding Business Day; or
"No Adjustment", such Interest Payment Date shall not be adjusted in
accordance with any Business Day Convention.
(c)
"Day Count Fraction" means, in respect of the calculation of an amount of interest for
any Interest Period:
(i)
if Actual/Actual (ICMA) is specified in the applicable Final Terms:
(A)
(B)
where the Interest Period is equal to or shorter than the Determination
Period during which the Interest Period ends, the number of days in
such Interest Period divided by the product of (I) the number of days in
such Determination Period and (II) the number of Determination Dates
(as specified in the applicable Final Terms) that would occur in one
calendar year; or
where the Interest Period is longer than the Determination Period
during which the Interest Period ends, the sum of (I) the number of days
in such Interest Period falling in the Determination Period in which the
Interest Period begins divided by the product of (x) the number of days
in such Determination Period and (y) the number of Determination
Dates that would occur in one calendar year; and (II) the number of
days in such Interest Period falling in the next Determination Period
divided by the product of (x) the number of days in such Determination
Period and (y) the number of Determination Dates that would occur in
one calendar year;
(ii)
(iii)
(iv)
(v)
if Actual/Actual or Actual/Actual (ISDA) is specified in the applicable Final
Terms, the actual number of days in the Interest Period divided by 365 (or, if
any portion of that Interest Period falls in a leap year, the sum of (i) the actual
number of days in that portion of the Interest Period falling in a leap year
divided by 366, and (ii) the actual number of days in that portion of the Interest
Period falling in a non leap year divided by 365);
if Actual/365 (Fixed) is specified in the applicable Final Terms, the actual
number of days in the Interest Period divided by 365;
if Actual/365 (Sterling) is specified in the applicable Final Terms, the actual
number of days in the Interest Period divided by 365 or, in the case of an
Interest Payment Date falling in a leap year, 366;
if Actual/360 is specified in the applicable Final Terms, the actual number of
days in the Interest Period divided by 360;
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(vi)
if 30/360, 360/360 or Bond Basis is specified in the applicable Final Terms, the
number of days in the Interest Period divided by 360, calculated on a formula
basis as follows:
[360x(Y2 − Y1)] + [30x(M2 − M1)] + (D2 − D1)
Day Count Fraction =
360
where:
"Y1" is the year, expressed as a number, in which the first day of the Interest
Period falls;
"Y2" is the year, expressed as a number, in which the day immediately
following the last day of the Interest Period falls;
"M1" is the calendar month, expressed as a number, in which the first day of the
Interest Period falls;
"M2" is the calendar month, expressed as a number, in which the day
immediately following the last day of the Interest Period falls;
"D1" is the first calendar day, expressed as a number, of the Interest Period,
unless such number is 31, in which case D1 will be 30; and
"D2" is the calendar day, expressed as a number, immediately following the last
day included in the Interest Period, unless such number would be 31 and D1 is
greater than 29, in which case D2 will be 30;
(vii)
if 30E/360 or Eurobond Basis is specified in the applicable Final Terms, the
number of days in the Interest Period divided by 360, calculated on the above
formula basis except where:
"D1" is the first calendar day, expressed as a number, of the Interest Period,
unless such number would be 31, in which case D1 will be 30; and
"D2" is the calendar day, expressed as a number, immediately following the last
day included in the Interest Period, unless such number would be 31, in which
case D2 will be 30;
(viii)
if 30E/360 (ISDA) is specified in the applicable Final Terms, the number of
days in the Interest Period divided by 360, calculated on the above formula basis
except where:
"D1" is the first calendar day, expressed as a number, of the Interest Period,
unless (i) that day is the last day of February or (ii) such number would be 31, in
which case D1 will be 30; and
"D2" is the calendar day, expressed as a number, immediately following the last
day included in the Interest Period, unless (i) that day is the last day of February
but not the Final Maturity Date or (ii) such number would be 31 and D2 will be
30; or
(ix)
such other Day Count Fraction as may be specified in the applicable Final
Terms.
(d)
If "adjusted" is specified in the applicable Final Terms against the Day Count Fraction,
interest in respect of the relevant Interest Period shall be payable in arrear on the relevant
Interest Payment Date and calculated from (and including) an Interest Payment Date (or
the Interest Commencement Date) to (but excluding) the next (or first) Interest Payment
Date, as such Interest Payment Date shall, where applicable, be adjusted in accordance
with the Business Day Convention.
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(e)
(f)
If "not adjusted" is specified in the applicable Final Terms against the Day Count
Fraction, interest in respect of the relevant Interest Period shall be payable in arrear on
the relevant Interest Payment Date and calculated from (and including) an Interest
Payment Date (or the Interest Commencement Date) to (but excluding) the next (or first)
Interest Payment Date, but such Interest Payment Dates shall not be adjusted in
accordance with any Business Day Convention.
"sub-unit" means, with respect to any currency other than euro, the lowest amount of
such currency that is available as legal tender in the country of such currency and, with
respect to euro, euro 0.01.
7.15 Floating Rate Covered Bonds Interest Rate after Notice of Default: If Floating Rate Covered
Bonds become immediately due and repayable under Condition 13.1 (Consequences of delivery
of Notice of Default) the rate and/or amount of interest payable in respect of them will be
calculated at the same intervals as if such Covered Bonds had not become due and repayable, the
first of which will commence on the expiry of the Interest Period during which the Covered
Bonds become so due and repayable in accordance with Condition 13.1 (Consequences of
delivery of Notice of Default) (with consequential amendments as necessary) except that the rates
of interest need not be published.
8. Redemption and Purchase
8.1 Final redemption
(a)
(b)
(c)
Unless previously redeemed or purchased and cancelled as specified below, each
Covered Bond will be redeemed by the Issuer at its Final Redemption Amount on the
Final Maturity Date.
If an Extended Final Maturity Date is specified in the applicable Final Terms for a Series
of Covered Bonds and the Issuer has failed to pay the Final Redemption Amount on the
Final Maturity Date, then this shall not constitute an Event of Default and (subject as
provided below) payment of the unpaid amount by the Issuer shall be deferred until the
Extended Final Maturity Date, provided that any amount representing the Final
Redemption Amount due and remaining unpaid on the Final Maturity Date may be paid
by the Issuer on any Interest Payment Date occurring thereafter up to (and including) the
relevant Extended Final Maturity Date.
The Issuer shall confirm to the Rating Agencies, any relevant Hedging Counterparty, the
Trustee, the Clearing Systems and the Principal Paying Agent as soon as reasonably
practicable and in any event at least four Business Days prior to the Final Maturity Date
if the Issuer will not pay in full the Final Redemption Amount in respect of a Series of
Covered Bonds on the Final Maturity Date.
8.2 Redemption for taxation reasons: The Covered Bonds may be redeemed at the option of the
Issuer in whole, but not in part, at any time (if the relevant Covered Bond is not a Floating Rate
Covered Bond or a Variable Interest Covered Bond) or on any Interest Payment Date (if the
relevant Covered Bond is a Floating Rate Covered Bond or a Variable Interest Covered Bond):
(a)
(b)
on giving not less than 30 nor more than 60 days' notice to the Trustee and, in
accordance with the Notices Condition, the Covered Bondholders (which notice shall be
irrevocable); and
if the Issuer satisfies the Trustee immediately before the giving of such notice that on the
occasion of the next date for payment of interest on the relevant Covered Bonds, that the
Issuer is or would be required to pay additional amounts as provided or referred to in
Condition 10 (Taxation).
Covered Bonds redeemed pursuant to this Condition will be redeemed at their Early Redemption
Amount together (if appropriate) with interest accrued to (but excluding) the date of redemption,
provided the Issuer has sufficient funds to discharge any amounts due in priority to the Covered
Bondholders in the relevant Payments Priorities.
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8.3 Redemption at the option of the Issuer: If an Issuer Call is specified in the applicable Final
Terms (an "Issuer Call"), the Issuer may, having given:
(a)
(b)
not less than 15 nor more than 30 days' notice to the Covered Bondholders in accordance
with the Notices Condition; and
not less than 15 days before the giving of the notice referred to in (a), notice to the
Principal Paying Agent and to the Trustee,
(which notice shall be irrevocable) redeem all or some only of the Covered Bonds then
outstanding on any Optional Redemption Date and at the Optional Redemption Amount(s)
specified in, or determined in the manner specified in, the applicable Final Terms together, if
applicable, with interest accrued to (but excluding) the relevant Optional Redemption Date,
provided the Issuer has sufficient funds to discharge any amounts due in priority to the Covered
Bondholders in the relevant Payments Priorities. Any such redemption must be of a nominal
amount not less than the Minimum Redemption Amount and not more than the Maximum
Redemption Amount (if any). In the case of a partial redemption of Covered Bonds, the Covered
Bonds to be redeemed (the "Redeemed Covered Bonds") will be selected individually by lot in
the case of Redeemed Covered Bonds represented by Definitive Covered Bonds or Individual
Covered Bond Certificates, and in accordance with the rules of Euroclear and/or Clearstream,
Luxembourg, (to be reflected in the records of Euroclear and Clearstream, Luxembourg as either
a pool factor or a reduction in nominal amount, at their discretion) in the case of Redeemed
Covered Bonds represented by a Global Covered Bond, in each case, not more than 30 days prior
to the date fixed for redemption (such date of selection being hereinafter called the "Selection
Date"). In the case of Redeemed Covered Bonds represented by Definitive Covered Bonds or
Individual Covered Bond Certificates, a list of the serial numbers of such Redeemed Covered
Bonds will be published in accordance with the Notices Condition not less than 15 days (or such
shorter period as may be specified in the applicable Final Terms) prior to the Optional
Redemption Date. The aggregate nominal amount of Redeemed Covered Bonds represented by
Definitive Covered Bonds, Individual Covered Bond Certificates or Global Covered Bonds shall
be pro rata to the aggregate nominal amount of Definitive Covered Bonds, Individual Covered
Bond Certificates or Global Covered Bonds outstanding on the Selection Date, provided that
such nominal amounts shall, if necessary, be rounded downwards to the nearest integral multiple
of the Specified Denomination.
No exchange of the relevant Global Covered Bond will be permitted during the period from (and
including) the Selection Date to (and including) the date fixed for redemption pursuant to this
Condition and notice to that effect shall be given by the Issuer to the Covered Bondholders in
accordance with the Notices Condition at least five days (or such shorter period as is specified in
the applicable Final Terms) prior to the Selection Date.
8.4 Redemption at the option of the Covered Bondholders:
(a)
(b)
If an Investor Put is specified in the Final Terms (the "Investor Put"), then if and to the
extent specified in the applicable Final Terms, upon the holder of this Covered Bond
giving to the Issuer, a Put Notice, not less than 30 nor more than 60 days' prior to the
Optional Redemption Date (or such other period specified in the applicable Final Terms)
(which notice shall be irrevocable), the Issuer will redeem subject to, and in accordance
with, the terms specified in the applicable Final Terms, such Covered Bond on the
Optional Redemption Date and at the relevant Optional Redemption Amount as
specified in, or determined in the manner specified in, the applicable Final Terms,
together, if applicable, with interest accrued to (but excluding) the relevant Optional
Redemption Date, provided the Issuer has sufficient funds to discharge any amounts due
in priority to the Covered Bondholders in the relevant Payments Priorities.
To exercise such right of redemption the holder of this Covered Bond must deliver, to
the specified office of any Paying Agent, at any time during normal business hours of
such Paying Agent falling within the notice period, a duly completed and signed notice
of exercise in the form (for the time being current) obtainable from any specified office
of any Paying Agent or the Transfer Agent or the Registrar (a "Put Notice") and in
which the holder must specify a bank account (or, if payment is required to be made by
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cheque, an address) to which payment is to be made under this Condition. If this
Covered Bond is in definitive form, this Covered Bond or evidence that this Covered
Bond will, following delivery of the Put Notice, be held to its order or under its control
must be provided satisfactory to the Paying Agent, Transfer Agent or the Registrar
concerned.
(c)
Before an Investor Put can be exercised, certain conditions and/or circumstances set out
in the applicable Final Terms may need to be satisfied.
8.5 Early Redemption Amounts
(a)
"Early Redemption Amount" means:
(i)
(ii)
(iii)
in the case of a Covered Bond with a Final Redemption Amount equal to the
Issue Price, the Final Redemption Amount thereof;
in the case of a Covered Bond other than a Zero Coupon Covered Bond, with a
Final Redemption Amount which is not or may not be the Issue Price or which
is payable in a Specified Currency other than that in which it is denominated, at
the amount specified in, or determined in the manner specified in, the applicable
Final Terms or, if no such amount or manner is so specified in the applicable
Final Terms, at its Principal Amount Outstanding, together with interest accrued
to (but excluding) the date fixed for redemption; and
in the case of a Zero Coupon Covered Bond, at an amount (the "Amortised
Face Amount") equal to the sum of:
(A)
(B)
the Reference Price; and
the product of the Accrual Yield (compounded annually) being applied
to the Reference Price from (and including) the Issue Date to (but
excluding) the date fixed for redemption or (as the case may be) the
date upon which such Covered Bond becomes due and repayable.
(b)
Where such calculation in paragraph (iii) above is to be made for a period which is not a
whole number of years, it shall be made (A) in the case of a Zero Coupon Covered Bond
payable in a Specified Currency other than euro, on the basis of a 360 day year
consisting of 12 months of 30 days each, or (B) in the case of a Zero Coupon Covered
Bond payable in euro, on the basis of the actual number of days elapsed divided by 365
(or, if any of the days elapsed falls in a leap year, the sum of (x) the number of those
days falling in a leap year divided by 366 and (y) the number of those days not falling in
a leap year divided by 365) or (C) on such other calculation basis as may be specified in
the applicable Final Terms.
8.6 Instalment Covered Bonds: Instalment Covered Bonds will be redeemed in instalment amounts
as specified in the Final Terms (the "Instalment Amount") and on the date specified in the Final
Terms (the "Instalment Date"). In the case of early redemption, the Early Redemption Amount
will be determined pursuant to Condition 8.5 (Early Redemption Amounts).
8.7 Partly Paid Covered Bonds: Partly Paid Covered Bonds will be redeemed at maturity in
accordance with the provisions of the applicable Final Terms. In the case of early redemption,
the Early Redemption Amount will be determined pursuant to Condition 8.5 (Early Redemption
Amounts).
8.8 Purchases: The Issuer or any subsidiary holding company or affiliate of the Issuer may at any
time acquire Covered Bonds (provided that, in the case of Definitive Covered Bonds, all
unmatured Receipts, Coupons and Talons appertaining thereto are attached or surrendered
therewith) at any price in the open market or otherwise either by tender or private agreement or
otherwise. Such Covered Bonds may be held, reissued, resold or, at the option of the Issuer,
surrendered to any Paying Agent and/or the Registrar for cancellation.
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8.9 Cancellation: All Covered Bonds which are redeemed will forthwith be cancelled (together with,
in the case of definitive Covered Bonds, all unmatured Receipts, Coupons and Talons attached
thereto or surrendered therewith). All Covered Bonds so cancelled and any Covered Bonds
purchased and cancelled pursuant to Condition 8.8 (Purchases) (together with, in the case of
Definitive Covered Bonds, all unmatured Receipts, Coupons and Talons cancelled therewith)
shall be forwarded to the Principal Paying Agent and cannot be reissued or resold.
8.10 Late Payment: If any amount payable in respect of any Covered Bond is improperly withheld or
refused upon its becoming due and repayable or is paid after its due date, the amount due and
repayable in respect of such Covered Bond (the "Late Payment") shall itself accrue interest
(both before and after any judgment or other order of a court of competent jurisdiction) from (and
including) the date on which such payment was improperly withheld or refused or, as the case
may be, became due, to (but excluding) the Late Payment Date in accordance with the following
provisions:
(a)
(b)
in the case of a Covered Bond other than a Zero Coupon Covered Bond or a Variable
Interest Covered Bond at the Interest Rate;
in the case of a Variable Interest Covered Bond, at a rate calculated by the Calculation
Agent so as to compensate reasonably the holder of the Covered Bond for the cost of
funding the delay in receiving the Late Payment,
in each case on the basis of the Day Count Fraction specified in the applicable Final Terms or, if
none is specified, on a 30/360 basis.
For the purpose of this Condition and Condition 8.11 (Zero Coupon Covered Bond Provisions),
the "Late Payment Date" shall mean the earlier of:
(a)
(b)
the date which the Principal Paying Agent determines to be the date on which, upon
further presentation of the relevant Covered Bond, payment of the full amount (including
interest as aforesaid) in the relevant currency in respect of such Covered Bond is to be
made; and
the seventh day after notice is given to the relevant Covered Bondholder (whether
individually or in accordance with the Notices Condition) that the full amount (including
interest as aforesaid) in the relevant currency in respect of such Covered Bond is
available for payment,
provided that in the case of both (i) and (ii), upon further presentation thereof being duly made,
such payment is made.
8.11 Zero Coupon Covered Bond Provisions: If the Redemption Amount payable in respect of any
Zero Coupon Covered Bond is improperly withheld or refused upon its becoming due and
repayable or is paid after its due date, the Redemption Amount shall thereafter be an amount
equal to the sum of:
(a)
(b)
the Reference Price; and
the product of the Accrual Yield (compounded annually) being applied to the Reference
Price on the basis of the relevant Day Count Fraction, from (and including) the Issue
Date to (but excluding) the Late Payment Date.
9. Payments
9.1 Principal - Bearer Bonds: Payments of principal on Bearer Bonds shall be made only against:
(a)
(b)
in the case of final redemption, provided that payment is made in full, presentation and
surrender of the relevant Bearer Bonds; and
in respect of any other principal payment, presentation and (in the case of payment in
full) surrender of the appropriate Receipts.
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at the specified office of any Paying Agent outside the United States.
9.2 Principal - Registered Bonds: Payments of principal on Registered Bonds shall be made on
application by a Holder of a Registered Bond to the Specified Office of any Paying Agent not
later than the fifteenth day before the due date for any such payment and (in the case of
redemption) upon surrender (or, in the case of part payment only, endorsement) of the relevant
Registered Bond at the Specified Office of any Paying Agent.
9.3 Interest on Coupons: Payments of interest shall be made only against presentation and (provided
that payment is made in full) surrender of the appropriate Coupons at the specified office of any
Paying Agent outside the United States.
9.4 Interest - Registered Bonds: Payments of interest on Registered Bonds shall be made on
application by a Holder of a Registered Bond to the Specified Office of any Paying Agent not
later than the fifteenth day before the due date for any such payment and (in the case of interest
payable upon redemption) upon surrender (or, in the case of part payment only, endorsement) of
the relevant Registered Bond at the Specified Office of any Paying Agent.
9.5 Method of payment:
(a)
(b)
(c)
payments in euro will be made by credit or transfer to a euro account (or any other
account to which euro may be credited or transferred) specified by the payee;
payments in U.S. Dollars will be made by transfer to a U.S. Dollar account maintained
by the payee with a bank outside of the United States; and
payments in another Specified Currency will be made by credit or transfer to an account
in the relevant Specified Currency (which, in the case of a payment in Yen to a non
resident of Japan, shall be a non resident account) maintained by the payee with, or, at
the option of the payee, by a cheque in such Specified Currency drawn on, a bank in the
principal financial centre of the country of such Specified Currency (which, if the
Specified Currency is Australian dollars or New Zealand dollars, shall be Sydney and
Auckland, respectively);
All payments of interest in respect of Covered Bonds will be made to accounts located outside
the United States except as may be permitted by United States tax law in effect at the time of
such payment without detriment to the Issuer.
9.6 Payments in United States:
Notwithstanding the foregoing provisions of this Condition, payments of principal and/or interest
in respect of Bearer Bonds in U.S. Dollars will only be made at the specified office of a Paying
Agent in the United States if:
(a)
(b)
(c)
the Issuer has appointed Paying Agents with specified offices outside the United States
with the reasonable expectation that such Paying Agents would be able to make payment
in U.S. Dollars at such specified offices outside the United States of the full amount of
principal and/or interest on the Bearer Bonds in the manner provided above when due;
payment of the full amount of such principal and interest at such specified offices
outside the United States is illegal or effectively precluded by exchange controls or other
similar restrictions on the full payment or receipt of principal and interest in U.S. Dollars;
and
such payment is then permitted under United States law without involving, in the
opinion of the Issuer adverse tax consequences to the Issuer.
9.7 Payments subject to fiscal laws: All payments in respect of the Covered Bonds are subject in all
cases to any applicable fiscal or other laws and regulations, but without prejudice to the
provisions of Condition 10 (Taxation), no commissions or expenses shall be charged to the
Covered Bondholders or Couponholders in respect of such payments.
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9.8 Unmatured Receipts Void: On the due date for final redemption of any Covered Bond, all
unmatured Receipts relating thereto (whether or not still attached) shall become void and no
payment will be made in respect thereof.
9.9 Unmatured Coupons Void: On the due date for final redemption of any Floating Rate Covered
Bond, Variable Interest Covered Bond or Long Maturity Covered Bond, all unmatured Coupons
relating thereto (whether or not still attached) shall become void and no payment will be made in
respect thereof.
9.10 Deductions for unmatured Coupons: Fixed Rate Covered Bonds in definitive bearer form (other
than Long Maturity Covered Bonds) should be presented for payment together with all
unmatured Coupons appertaining thereto (which expression shall include Coupons falling to be
issued on exchange of matured Talons), failing which an amount equal to the face value of any
missing unmatured Coupon (or, in the case of payment not being made in full, the same
proportion of the amount of such missing unmatured Coupon as the sum so paid bears to the total
amount due) will be deducted from the amount due for payment. Each amount of principal so
deducted will be paid in the manner mentioned above against surrender of the related missing
Coupon at any time before the expiry of ten years after the Relevant Date in respect of such
principal (whether or not such Coupon would otherwise have become void) or, if later, five years
from the date on which such Coupon would otherwise have become due but in no event
thereafter.
9.11 Payments on Payment Business Days: If the due date for payment of any amount in respect of
any Covered Bonds or Coupon is not a payment business day in the place of presentation or
payment, the holder shall not be entitled to payment in such place of the amount due until the
next succeeding payment business day in the place of presentation or payment on which banks
are open for business in such place of presentation or payment and shall not be entitled to any
further interest or other payment in respect of any such delay.
9.12 Payment Business Days: In this Condition, "payment business day" means:
(i)
if the currency of payment is euro, any day which is:
(A)
(B)
a day on which banks in the relevant place of presentation are open for
presentation and payment of bearer debt securities and for dealings in foreign
currencies; and
in the case of payment by transfer to an account, a TARGET Settlement Day
and a day on which dealings in foreign currencies may be carried on in each (if
any) Additional Financial Centre; or
(ii)
if the currency of payment is not euro, any day which is:
(A)
(B)
a day on which banks in the relevant place of presentation are open for
presentation and payment of bearer debt securities and for dealings in foreign
currencies; and
in the case of payment by transfer to an account, a day on which dealings in
foreign currencies may be carried on in the Principal Financial Centre of the
currency of payment and in each (if any) Additional Financial Centre.
9.13 Payments other than in respect of matured Coupons: Payments of interest other than in respect of
matured Coupons shall be made only against presentation of the relevant Covered Bonds at the
specified office of any Paying Agent outside the United States (unless permitted by Condition 9.6
(Payments in United States)).
9.14 Endorsement of payments: If a Paying Agent makes a payment in respect of any Covered Bond
(otherwise than against presentation and surrender of a Coupon) or a partial payment in respect
of any Coupon presented to it for payment, such Paying Agent will endorse on such Covered
Bonds or Coupon (as the case may be) a statement indicating the amount and date of such
payment.
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9.15 Exchange of Talons: On or after the Interest Payment Date of the final Coupon which is (or was
at the time of issue) part of a coupon sheet relating to the Covered Bonds (each, a "Coupon
Sheet"), the Talon forming part of such Coupon Sheet may be exchanged at the Specified Office
of the Principal Paying Agent for a further Coupon Sheet (including a further Talon but
excluding any Coupons in respect of which claims have already become void pursuant to
Condition 15 (Prescription)). Upon the due date for redemption of any Covered Bond, any
unexchanged Talon relating to such Covered Bond shall become void and no Coupon will be
delivered in respect of such Talon.
9.16 Record date: Each payment in respect of a Registered Bond will be made to the person shown as
the Holder in the Register at the opening of business in the place of the Registrar's Specified
Office on the fifteenth day before the due date for such payment (the "Record Date"). Where
payment in respect of a Registered Bond is to be made by cheque, the cheque will be mailed to
the address shown as the address of the Holder in the Register at the opening of business on the
relevant Record Date.
9.17 Notifications to be final: All notifications, opinions, determinations, certificates, calculations,
quotations and decisions given, expressed, made or obtained for the purposes of this Condition,
whether by the Reference Banks (or any of them), the Paying Agents, the Calculation Agent or
the Trustee shall (in the absence of any gross negligence, wilful default, fraud or manifest error)
be binding on the Issuer and all Covered Bondholders and Couponholders and (in the absence of
any gross negligence, wilful default or fraud) no liability to the Trustee, the Covered
Bondholders or the Couponholders shall attach to the Reference Banks, the Agents, or the
Trustee in connection with the exercise or non-exercise by them or any of them of their powers,
duties and discretions under this Condition.
9.18 Interpretation of principal and interest: Any reference in these Conditions to principal in respect
of the Covered Bonds shall be deemed to include, as applicable:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
any additional amounts which may be payable with respect to principal under Condition
10 (Taxation) or under any undertakings or covenants given in addition thereto, or in
substitution therefor, pursuant to the Trust Deed;
the Final Redemption Amount of the Covered Bonds;
the Early Redemption Amount of the Covered Bonds but excluding any amount of
interest referred to therein;
the Optional Redemption Amount(s) (if any) of the Covered Bonds;
in relation to Zero Coupon Covered Bonds, the Amortised Face Amount (as defined in
Condition 8.5(iii));
any premium and any other amounts (other than interest) which may be payable under or
in respect of the Covered Bonds; and
in relation to any Dual Currency Interest Covered Bonds, the principal payable in any
relevant Specified Currency.
Any reference in these Conditions to interest in respect of the Covered Bonds shall be deemed to
include, as applicable, any additional amounts which may be payable with respect to interest
under Condition 10 (Taxation) or under any undertakings given in addition thereto, or in
substitution therefor, pursuant to the Trust Deed.
10. Taxation
10.1 Gross up: All payments of principal and interest in respect of the Instrument (if any) by or on
behalf of the Issuer shall be made free and clear of, and without withholding or deduction for,
any taxes, duties, assessments or governmental charges of whatsoever nature imposed, levied,
collected, withheld or assessed by the Hellenic Republic or any political subdivision or any
authority thereof or therein having power to tax, unless such withholding or deduction is required
by law. In that event, prior to the occurrence of an Issuer Insolvency Event but not afterwards,
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the Issuer shall pay such additional amounts to Instrumentholders as will result in the receipt by
the Instrumentholders of such amounts as would have been received by them if no such
withholding or deduction had been required, except that no such additional amounts shall be
payable in respect of any Instrument presented for payment:
(a)
(b)
(c)
(d)
(e)
(f)
in the Hellenic Republic;
by or on behalf of a holder which is liable to such Taxes in respect of such Instrument by
reason of its having some connection with the Hellenic Republic other than the mere
holding of such Covered Bond or Coupon;
more than 30 days after the Relevant Date except to the extent that the relevant holder
would have been entitled to such additional amounts if it had presented such Covered
Bond or Coupon on the last day of such period of 30 days;
by or on behalf of a holder who would not be liable or subject to such withholding or
deduction if it were to comply with a statutory requirement or to make a declaration of
non residence or other similar claim for exemption but fails to do so;
where such withholding or deduction is imposed on a payment to an individual and is
required to be made pursuant to European Council Directive 2003/48/EC or any other
Directive or law implementing the conclusions of the ECOFIN Council meeting of 26–
27 November 2000 on the taxation of savings income or any law implementing or
complying with, or introduced in order to conform to, such Directive; or
by or on behalf of a holder who would have been exempted from such withholding or
deduction by presenting the relevant Covered Bond or Coupon to another Paying Agent
in a Member State of the European Union.
10.2 Taxing jurisdiction: If the Issuer becomes subject at any time to any taxing jurisdiction other
than the Hellenic Republic references in the Conditions to the Hellenic Republic shall be
construed as references to the Hellenic Republic and/or such other jurisdiction.
As used herein, the "Relevant Date" means the date on which payment in respect of the Covered
Bond, Receipt or Coupon first becomes due and payable but, if the full amount of the moneys
payable on such date has not been received by the Principal Paying Agent on or prior to such
date, the Relevant Date shall be the date on which such moneys shall have been so received and
notice to that effect has been given to Covered Bondholders in accordance with the Notices
Condition.
11. Issuer Events
If any of the following events (each, an "Issuer Event") occurs:
(a)
(b)
(c)
an Issuer Insolvency Event;
any present or future Indebtedness of the Issuer becomes due and payable prior to the
stated maturity thereof as extended by any grace period originally applicable thereto; or
any present or future guarantee of, or indemnity given by the Issuer in respect of,
indebtedness is not honoured when called upon or within any grace period originally
applicable thereto, provided that the amount of Indebtedness referred to in this paragraph
(b) individually or in the aggregate exceeds €10,000,000 (or its equivalent in any other
currency or currencies);
the Issuer defaults in the performance or observance of any of its other obligations,
which in the opinion of the Trustee would have a materially prejudicial effect on the
interests of the Covered Bondholders, under or in respect of the Covered Bonds or the
Transaction Documents and such default (i) is, in the opinion of the Trustee, incapable
of remedy or (ii) is, in the opinion of the Trustee, capable of remedy and remains
unremedied for 30 days or such longer period as the Trustee may agree after the Trustee
has given written notice thereof to the Issuer;
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(d)
(e)
(f)
(g)
it is or will become unlawful for the Issuer to perform or comply with any of its
obligations, which in the opinion of the Trustee would have a materially prejudicial
effect on the interests of the Covered Bondholders, under or in respect of the Covered
Bonds or the Transaction Documents;
a Test Event; or
there is a failure to pay the Final Redemption Amount on the Final Maturity Date in
respect of any Series for which an Extended Final Maturity Date is specified in the
applicable Final Terms, which shall constitute an Issuer Event only for so long as the
Final Redemption Amount has not been paid in full; or
there is a failure to pay any amount of interest in respect of any Series of Covered Bonds
on the due date for payment of such (disregarding any grace period),
then for so long as such Issuer Event is continuing, (i) no further Covered Bonds will be issued
and (ii) all collections of principal and interest on the Cover Pool Assets will be dedicated
exclusively to the payment of interest and repayment of principal on the Covered Bonds and to
the fulfilment of the obligations of the Issuer to the Secured Creditors in accordance with the
relevant Payments Priorities.
12. Events of Default
12.1 Events of Default: The following shall each be an Event of Default in respect of the Covered
Bonds:
(a)
(b)
Non-payment: there is a failure to pay any amount of principal or interest in respect of
any Series of Covered Bonds within seven days of the due date for payment of such
(subject to Condition 8.1(b) (Final Redemption)); or
Cover Event: following the occurrence of an Issuer Insolvency Event, the Trustee is
notified by, or on behalf of, the Servicer of the occurrence of a Cover Event.
12.2 Delivery of Notice of Default: If the Trustee is satisfied that an Event of Default has occurred and
is continuing, the Trustee may at its discretion and shall:
(a)
(b)
if so requested in writing by the holders of at least 25 per cent. of the aggregate Principal
Amount Outstanding of the Covered Bonds then outstanding as if they were a single
Series (with any non-euro amounts converted into euro at the Swap Rate); or
if so directed by an Extraordinary Resolution passed at a joint meeting of the holders of
all the outstanding Covered Bonds;
deliver a Notice of Default to the Issuer.
12.3 Conditions to delivery of Notice of Default: Notwithstanding Conditions 12.1(a) and 12.1(b)
above, the Trustee shall not be obliged to deliver a Notice of Default unless it shall have been
indemnified and/or secured to its satisfaction against all Liabilities to which it may thereby
become liable or which it may incur by so doing.
13. Enforcement
13.1 Consequences of delivery of Notice of Default: Upon the delivery of a Notice of Default, the
Covered Bonds of each Series shall become immediately due and payable without further action
or formality at their Principal Amount Outstanding together with any accrued interest thereon.
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13.2 Proceedings: The Trustee may at its discretion and without further notice, institute such
proceedings as it thinks fit to enforce its rights under the Statutory Pledge, the Security Deed,
these Conditions and the Trust Deed in respect of the Covered Bonds of each Series and under
the other Transaction Documents, but it shall not be bound to do so unless it is:
(a)
(b)
so requested in writing by the holders of at least 25 per cent. of the Principal Amount
Outstanding of the Covered Bonds then outstanding as if they were a single Series (with
any non-euro amounts converted into euro at the Swap Rate); or
so directed by an Extraordinary Resolution passed at a joint meeting of the holders of all
the outstanding Covered Bonds;
and, in any such case, only if it shall have been indemnified and/or secured to its satisfaction
against all Liabilities to which it may thereby become liable or which it may incur by so doing.
13.3 Restrictions on disposal of Charged Property: If a Notice of Default has been delivered by the
Trustee otherwise than in connection with Condition 12.1(a), the Trustee will not be entitled to
dispose of the Charged Property or any part thereof unless either:
(a)
(b)
a sufficient amount would be realised to allow payment in full of all amounts owing to
the Covered Bondholders and the Couponholders of each Series after payment of all
other claims ranking in priority to the Covered Bonds in accordance with the Post Event
of Default Priority of Payments; or
the Trustee is of the opinion, which shall be binding on the Covered Bondholders and
the other Secured Creditors, reached after considering at any time and from time to time
the advice of an investment bank or other financial adviser selected by the Trustee, (and
if the Trustee is unable to obtain such advice having made reasonable efforts to do so
this Condition shall not apply) that the cash flow prospectively receivable by the Issuer
will not (or that there is a significant risk that it will not) be sufficient, having regard to
any other relevant actual, contingent or prospective liabilities of the Issuer, to discharge
in full in due course all amounts owing to the Covered Bondholders and Couponholders
after payment of all other claims ranking in priority to the Covered Bonds in accordance
with the Post Event of Default Priority of Payments; and
the Trustee shall not be bound to make the determination contained in Condition 13.3(a) or (b)
above unless the Trustee shall have been indemnified and/or secured to its satisfaction against all
Liabilities to which it may thereby become liable or which it may incur by so doing.
14. No action by Covered Bondholders and Couponholders
No Covered Bondholder or Couponholder may proceed directly against the Issuer unless the
Trustee, having become bound to do so, fails to do so within a reasonable time and such failure is
continuing.
15. Prescription
Claims against the Issuer for payment of principal and interest in respect of the Covered Bonds
will be prescribed and become void unless made, in the case of principal, within ten years or, in
the case of interest, five years after the Relevant Date.
16. Replacement of Covered Bonds Receipts, Coupons and Talons
If any Bond Certificate, Receipt, Talon or Coupon is lost, stolen, mutilated, defaced or destroyed,
it may be replaced at the Specified Office of the Principal Paying Agent (and, if the Covered
Bonds are then listed on any stock exchange which requires the appointment of a Paying Agent
in any particular place, the Paying Agent having its Specified Office in the place required by
such stock exchange), subject to all applicable laws and stock exchange requirements, upon
payment by the claimant of the expenses incurred in connection with such replacement and on
such terms as to evidence, security, indemnity and otherwise as the Issuer may reasonably
require. Any mutilated or defaced Bond Certificate, Receipt, Talon or Coupons must be
surrendered before replacements will be issued.
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17. Trustee and Agents
17.1 Trustee's Right to indemnity: Under the Transaction Documents, the Trustee is entitled to be
indemnified and relieved from responsibility in certain circumstances and to be paid its costs and
expenses in priority to the claims of the Instrumentholders. In addition, the Trustee is entitled to
enter into business transactions with the Issuer and any entity relating to the Issuer without
accounting for any profit.
17.2 Trustee not responsible for loss or for monitoring: The Trustee will not be responsible for any
loss, expense or liability which may be suffered as a result of the Charged Property or any
documents of title thereto being uninsured or inadequately insured or being held by or to the
order of any person on behalf of the Trustee. The Trustee shall not be responsible for monitoring
the compliance by any of the other Transaction Parties with their obligations under the
Transaction Documents, and shall be entitled to assume that no Event of Default, Cover Event,
Issuer Event, Moody's Issuer Downgrade Event or Servicer Event has happened until it has actual
notice to the contrary.
17.3 Regard to Covered Bondholders as if they were a single Series: Save as provided in the
Transaction Documents, in the exercise of its powers and discretions under these Conditions and
the Trust Deed, the Trustee will:
(a)
(b)
have regard to the interests of all Covered Bondholders as if they were a single Series
and will not be responsible for any consequence for individual Instrumentholders as a
result of such holders being domiciled or resident in, or otherwise connected in any way
with, or subject to the jurisdiction of, a particular territory or taxing jurisdiction; and
will not have regard to the interests of the other Secured Creditors except to ensure the
application of the Issuer's funds after the delivery of a Notice of Default in accordance
with the Post Event of Default Priority of Payments.
17.4 Paying Agents solely agents of Issuer: In acting under the Agency Agreement and in connection
with the Instruments, the Paying Agents act solely as agents of the Issuer and (to the extent
provided therein) the Trustee and do not assume any obligations towards or relationship of
agency or trust for or with any of the Instrumentholders.
17.5 Initial Paying Agents: The initial Paying Agents and their initial Specified Offices are listed
below. The Issuer reserves the right (with the prior written approval of the Trustee) to vary or
terminate the appointment of any Agent and to appoint a successor principal paying agent or
agent bank and additional or successor paying agents at any time, having given not less than 30
days notice to such Agent.
17.6 Maintenance of Agents: The Issuer shall at all times maintain a paying agent with its Specified
Office in any city where a stock exchange on which the Covered Bonds are listed requires there
to be a paying agent, a principal paying agent and an agent bank. Notice of any change in any of
the Agents or in their Specified Offices shall promptly be given to the Covered Bondholders in
accordance with the Notices Condition.
17.7 EU Paying Agent: The Issuer shall at all times maintain a paying agent in an EU member state
that will not be obliged to withhold or deduct tax pursuant to European Council Directive
2003/48/EC or any other Directive or law implementing the conclusions of the ECOFIN Council
meeting of 26–27 November 2000 or any law implementing or complying with, or introduced in
order to conform to, such Directive.
18. Meetings of Covered Bondholders
18.1 Meetings of Covered Bondholders: The Trust Deed contains provisions for convening meetings
of Covered Bondholders to consider matters relating to the Covered Bonds, including the
modification of any provision of these Conditions or the Trust Deed. Any such modification may
be made if sanctioned by an Extraordinary Resolution.
18.2 Request of Covered Bondholders: A meeting of Covered Bondholders may be convened by the
Trustee or the Issuer at any time and must be convened by the Trustee (subject to its being
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indemnified to its satisfaction) upon the request in writing of Covered Bondholders holding not
less than ten per cent. of the aggregate Principal Amount Outstanding of the outstanding Covered
Bonds of all Series (with any non-euro amounts converted into euro at the Swap Rate).
18.3 Quorum: The quorum at any meeting convened to vote on:
(a)
(b)
an Extraordinary Resolution other than regarding a Reserved Matter will be two or more
persons holding or representing more than one half of the aggregate Principal Amount
Outstanding of the outstanding Covered Bonds or, at any adjourned meeting, two or
more persons being or representing Covered Bondholders whatever the Principal
Amount Outstanding of the Covered Bonds held or represented (with any non-euro
amounts converted into euro at the Swap Rate);
an Extraordinary Resolution in relation to a Reserved Matter will be two or more
persons holding or representing not less than in the aggregate 75 per cent. or, at any
adjourned meeting, 33⅓ per cent. of the aggregate Principal Amount Outstanding of the
outstanding Covered Bonds (with any non-euro amounts converted into euro at the Swap
Rate).
Any Extraordinary Resolution duly passed at any such meeting shall be binding on all the
Covered Bondholders and Couponholders whether present or not.
18.4 Separate Meetings for each Series: Where more than one Series is outstanding, business which
in the opinion of the Trustee affects (a) only one Series will be transacted at a separate meeting of
the holders of that Series, (b) more than one Series but does not give rise to an actual or potential
conflict of interest between the holders of Covered Bonds of one such Series and the holders of
Covered Bonds of any other such Series shall be transacted either at separate meetings of the
holders of each Series or at a single meeting of the holders of all those Series, as the Trustee shall
in its absolute discretion determine and (c) more than one Series and gives rise to an actual or
potential conflict of interest between the holders of those Series shall be transacted at separate
meetings of the holders of each Series.
19. Modification and Waiver
19.1 Modification: The Trustee may, at any time and from time to time, without the consent or
sanction of the Instrumentholders or any other Secured Creditors, concur with the Issuer and any
other relevant parties in making:
(a)
(b)
any modification to these Conditions, the Trust Documents, the Covered Bonds or the
other Transaction Documents (other than in respect of a Reserved Matter or any
provisions of the Trust Documents, Conditions, Covered Bonds or other Transaction
Documents referred to in the definition of a Reserved Matter) in relation to which its
consent is required which, in the sole opinion of the Trustee, will not be materially
prejudicial to the interests of the holders of the outstanding Covered Bonds; or
any modification to these Conditions, the Trust Documents and the other Transaction
Documents in relation to which its consent is required if, in the sole opinion of the
Trustee, such modification is of a formal, minor or technical nature or is made to correct
a manifest error or is necessary or desirable for the purposes of clarification,
provided that, in relation to Condition 19.1(a), any modification is notified by or on behalf of the
Issuer to the Rating Agencies.
19.2 Waiver: In addition, the Trustee may, without the consent or sanction of the Instrumentholders or
any other Secured Creditor waive any proposed breach or breach of the covenants or provisions
contained in the Trust Documents, the Instruments, the other Transaction Documents (other than
in respect of a Reserved Matter), or determine that any Event of Default shall not be treated as
such or to make any determination in respect of an Issuer Event or a Servicer Event for the
purposes of the Trust Documents, the Instruments or any of the other Transaction Documents if,
in the opinion of the Trustee, the interests of the holders of the Covered Bonds then outstanding
will not be materially prejudiced by such waiver, provided that the Issuer shall notify the Rating
Agencies of any such waiver.
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19.3 Restriction on power to waive: The Trustee shall not exercise any powers conferred upon it by
Condition 19.2 (Waiver) in contravention of any express direction by an Extraordinary
Resolution of the holders of the Covered Bonds then outstanding or of a request or direction in
writing made by the holders of not less than 25 per cent. in aggregate Principal Amount
Outstanding of all the Covered Bonds then outstanding, but so that no such direction or request (a)
shall affect any authorisation, waiver or determination previously given or made or (b) shall
authorise or waive any such proposed breach or breach relating to a Reserved Matter unless the
holders of all Covered Bonds outstanding have, by Extraordinary Resolution, so authorised its
exercise.
19.4 Notification: Unless the Trustee otherwise agrees, the Issuer shall cause any such authorisation,
waiver, modification or determination to be notified to the Covered Bondholders, the other
Secured Creditors and the Rating Agencies in accordance with the Notices Condition and the
Transaction Documents, as soon as practicable after it has been made.
19.5 Binding Nature: Any authorisation, waiver, determination or modification referred to in
Condition 19.1 (Modification) or Condition 19.2 (Waiver) shall be binding on the
Instrumentholders and the other Secured Creditors.
20. Further Issues
20.1 Further Tranches: The Issuer may from time to time, without the consent of the Covered
Bondholders or the Couponholders, create and issue further bonds having the same terms and
conditions as the Covered Bonds in all respects (or in all respects except for the first payment of
interest) so as to form a single series with the Covered Bonds.
20.2 Further Series: The Issuer may from time to time, without the consent of the Covered
Bondholders or the Couponholders, create and issue other Series of Covered Bonds.
20.3 Conditions Precedent: It is a condition precedent to the issuance of a new Series or Tranche of
Covered Bonds that:
(a)
(b)
(c)
(d)
(e)
(f)
there is no Issuer Event which is continuing and that such issuance would not cause an
Issuer Event;
the Statutory Tests are satisfied and that such issuance would not cause a breach of the
Statutory Tests;
the Rating Agencies have confirmed the then current rating of all Covered Bonds
outstanding under the Programme and that the ratings of such Covered Bonds will not be
adversely affected or withdrawn as a result of such issuance;
such issuance has been approved by the Bank of Greece in accordance with paragraph
II.3 of the Secondary Covered Bond Legislation;
if applicable, in respect of any Series or Tranche, a Hedging Agreement is entered into;
and
the other conditions precedent specified in the Dealer Agreement are satisfied and/or
waived by the mandated Dealer.
21. Notices
Any notice to Covered Bondholders in respect of Covered Bonds represented by a Global
Covered Bond shall be deemed to have been validly given if:
(a)
sent to Euroclear and/or Clearstream, Luxembourg (as applicable) in such manner as
approved by the Principal Paying Agent and Euroclear and/or Clearstream, Luxembourg
(as applicable) (any such notice shall be deemed to have been given on the date it is sent
provided that this is within normal business hours); or
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(b)
published in a leading English language daily newspaper having a general circulation in
London (any such notice shall be deemed to have been given on the date of first
publication).
With regard to Covered Bonds which are listed on the Irish Stock Exchange and for so long as
the rules of that exchange so require, all notices shall be published on the website of the Irish
Stock Exchange (www.ise.ie) or in such other manner as required by the Irish Stock Exchange
from time to time. Any such notice shall be deemed to have been given on the date of such
publication. Receiptholders and Couponholders shall be deemed for all purposes to have notice
of the contents of any notice given to the Covered Bondholders.
22. Substitution of the Issuer
22.1 Substitution of Issuer: The Issuer may, subject to notifying the Rating Agencies but without the
consent of the holders of the Covered Bonds of any Series or any Receipts or Coupons relating
thereto, or any other Secured Creditor consolidate with, merge or amalgamate into any other
entity incorporated anywhere in the world and substitute such successor entity as the debtor in
respect of the Covered Bonds and other Secured Amounts (the "Substituted Obligor"), provided
that the conditions specified in the Trust Deed are satisfied.
22.2 Further Substitutions: After a substitution pursuant to Condition 22.1 the Substituted Obligor
may, subject to notifying the Rating Agencies but without the consent of any Covered
Bondholder or Couponholder, effect a further substitution. All the provisions specified in this
Conditions 22 shall apply mutatis mutandis, and references in these Conditions to the Issuer shall,
where the context so requires, be deemed to be or include references to any such further
Substituted Obligor.
22.3 Notice of Substitution of Issuer: Not later than fourteen days after any substitution of the Issuer in
accordance with this Condition, the Substituted Obligor shall cause notice of such substitution to
be given to the Covered Bondholders and the other Secured Creditors in accordance with the
Notices Condition.
22.4 Change of Law: In connection with any proposed substitution pursuant to this Condition, the
Trustee may in its absolute discretion and without the consent of the Instrumentholders or the
other Secured Creditors, agree to a change of the law from time to time governing the
Instruments and/or any of the Transaction Documents provided that such change of law would
not, in the opinion of the Trustee, be materially prejudicial to the interests of the Covered
Bondholders, and the Rating Agencies are notified.
22.5 No indemnity: No Instrumentholder shall, in connection with any such substitution, be entitled to
claim from the Issuer or the Trustee any indemnification or payment in respect of any tax
consequence of any such substitution upon individual Instrumentholders.
23. Rounding
For the purposes of any calculations referred to in these Conditions (unless otherwise specified in
these Conditions or the relevant Final Terms), (a) all percentages resulting from such calculations
will be rounded, if necessary, to the nearest one hundred thousandth of a percentage point (with
0.000005 per cent., being rounded up to 0.00001 per cent.), (b) all United States dollar amounts
used in or resulting from such calculations will be rounded to the nearest cent (with one half cent
being rounded up), (c) all Japanese Yen amounts used in or resulting from such calculations will
be rounded downwards to the next lower whole Japanese Yen amount, and (d) all amounts
denominated in any other currency used in or resulting from such calculations will be rounded to
the nearest two decimal places in such currency, with 0.005 being rounded upwards.
24. Governing Law and Jurisdiction
24.1 Governing law: The Covered Bonds and all non-contractual obligations arising out of or in
connection with the Covered Bonds are governed by, and shall be construed in accordance with,
English law.
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24.2 Jurisdiction: the Issuer has in the Trust Deed (i) submitted irrevocably to the jurisdiction of the
courts of England for the purposes of hearing and determining any suit, action or proceedings or
settling any disputes arising out of or in connection with the Trust Documents or the Covered
Bonds, (ii) waived any objection which it might have to any such courts being nominated as the
forum to hear and determine any such suit, action or proceedings or to settle any such disputes
and agreed not to claim that any such court is not a convenient or appropriate forum and (iii)
designated a person in England to accept service of any process on its behalf.
25. Third Parties
No person shall have any right to enforce any term or condition of this Covered Bond under the
Contracts (Rights of Third Parties) Act 1999 but this does not affect any right or remedy of any
person which exists or is available apart from that Act.
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FORM OF FINAL TERMS
Set out below is the form of Final Terms which, subject to any necessary amendment, will be completed
for each Tranche of Covered Bonds issued under the Programme. Text in this section appearing in italics
does not form part of the Final Terms but denotes directions for completing the Final Terms.
[Date]
MARFIN EGNATIA BANK S.A.
Issue of [Aggregate Nominal Amount of Tranche] [Title of Covered Bonds]
Under the €3 billion
Residential Mortgage Loans Covered Bond Programme
The Base Prospectus referred to below (as completed by these Final Terms) has been prepared on the
basis that any offer of Covered Bonds in any Member State of the European Economic Area which has
implemented the Prospectus Directive (2003/71/EC) (each, a "Relevant Member State") will be made
pursuant to an exemption under the Prospectus Directive, as implemented in that Relevant Member State,
from the requirement to publish a prospectus for offers of the Covered Bonds. Accordingly any person
making or intending to make an offer in that Relevant Member State of the Covered Bonds may only do
so in circumstances in which no obligation arises for the Issuer or any Dealer to publish a prospectus
pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the
Prospectus Directive, in each case, in relation to such offer. Neither the Issuer nor any Dealer has
authorised, nor do they authorise, the making of any offer of Covered Bonds in any other circumstances.
PART A – CONTRACTUAL TERMS
Terms used herein shall be deemed to be defined as such for the purposes of the Terms and Conditions set
forth in the Base Prospectus dated [date] [and the supplemental Prospectus dated [date]] which [together]
constitute[s] a base prospectus for the purposes of the Prospectus Directive (2003/71/EC) (the
"Prospectus Directive"). This document constitutes the final terms of the Covered Bonds described
herein for the purposes of Article 5.4 of the Prospectus Directive and must be read in conjunction with the
Base Prospectus [as so supplemented]. Full information on the Issuer and the offer of the Covered Bonds
is only available on the basis of the combination of these Final Terms and the Base Prospectus. Copies of
the Base Prospectus [and the supplement to the Base Prospectus] are available free of charge to the public
at the registered office of the Issuer and from the specified office of each of the Paying Agents.
[The following alternative language applies if the first Tranche of an issue which is being increased was
issued under a Prospectus with an earlier date.
Terms used herein shall be deemed to be defined as such for the purposes of the Conditions (the
"Conditions") set forth in the Base Prospectus dated [original date] [and the supplemental Base
Prospectus dated [date]]. This document constitutes the final terms of the Covered Bonds described
herein for the purposes of Article 5.4 of the Prospectus Directive (2003/71/EC) (the "Prospectus
Directive") and must be read in conjunction with the Base Prospectus dated [current date] [and the
supplemental Prospectus dated [date]], which [together] constitute[s] a base prospectus for the purposes
of the Prospectus Directive, save in respect of the Terms and Conditions which are extracted from the
Base Prospectus dated [original date] and are attached hereto. Full information on the Issuer and its
subsidiaries (together the "Group") and the offer of the Covered Bonds is only available on the basis of
the combination of this Final Terms and the Base Prospectus dated [original date] and [current date] [and
the supplement to the Base Prospectus dated [date]]. Copies of such Base Prospectuses are available free
of charge to the public at the registered office of the Issuer and from the specified office of each of the
Paying Agents.]
[Include whichever of the following apply or specify as "Not Applicable" (N/A). Note that the numbering
should remain as set out below, even if "Not Applicable" is indicated for individual paragraphs or
subparagraphs.]
[When completing any final terms or adding any other final terms or information including final terms at
items 9, 10, 15, 16, 17 or 28 of Part A or in relation to disclosure relating to the interests of natural and
legal persons involved in the issue/offer in Part B consideration should be given as to whether such terms
- 80 -

or information constitute "significant new factors" and consequently trigger the need for a supplement to
the Base Prospectus under Article 16 of the Prospectus Directive.]
1. Issuer: Marfin Egnatia Bank S.A.
2. (i) Series Number: [•]
(ii) Tranche Number: [•]
3. Specified Currency or Currencies: [•]
(If fungible with an existing Series, details of
that Series, including the date on which the
Covered Bonds become fungible).
4. Aggregate Nominal Amount of Covered
Bonds:
[•]
[(i)] Series: [•]
[(ii) Tranche: [•]
5. Issue Price: [•] per cent. of the Aggregate Nominal
Amount [plus accrued interest from [insert
date] (if applicable)]
6. (i) Specified Denominations: [•]
(ii) Calculation Amount: [•]
(N.B. Where multiple denominations above
€50,000 or equivalent are being used the
following sample wording should be followed:
€50,000 and integral multiples of [€1,000] in
excess thereof up to and including [€99,000].
No Covered Bonds in definitive form will be
issued with a denomination above [€99,000].)
(N.B. If an issue of Covered Bonds is (i) NOT
admitted to trading on a regulated market
within the European Economic Area
exchange; and (ii) only offered in the
European Economic Area in circumstances
where a prospectus is not required to be
published under the Prospectus Directive, the
[€50,000] minimum denomination is not
required.)
7. (i) Issue Date: [•]
(ii) Interest Commencement Date: [•]
8. (i) Final Maturity Date: [Fixed rate — specify date/Floating Rate —
Interest Payment Date falling in or nearest to
the relevant month and year]
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(ii) Extended Final Maturity Date: [Fixed rate – specify date/Floating rate –
Interest Payment Date falling in or nearest to
[specify month and year, in each case falling
one year after the Final Maturity Date]]
[If an Extended Final Maturity Date is
specified and the Final Redemption Amount is
not paid in full on the Final Maturity Date,
payment of the unpaid amount will be
automatically deferred until the Extended Final
Maturity Date, provided that any amount
representing the Final Redemption Amount
due and remaining unpaid on the Final
Maturity Date may be paid by the Issuer on
any Interest Payment Date occurring thereafter
up to (and including) the relevant Extended
Final Maturity Date. See Condition 8.1(b)
(Final Redemption)]
N.B. Zero Coupon Covered Bonds are not to
be issued with an Extended Final Maturity
Date unless otherwise agreed with the Dealers
and the Trustee
9. (i) Interest Basis: [[•] per cent. Fixed Rate]
[Specify reference rate] [•] per cent.
[Floating Rate]
[Zero Coupon]
[Index Linked Interest]
[Dual Currency Interest]
10. Redemption/Payment Basis: [Redemption at par]
[specify other](further particulars specified
below)
[Partly Paid]
[Instalment]
[specify other]
[N.B. If the Final Redemption Amount is other
than 100 per cent. of the nominal value, the
Covered Bonds will be derivative securities for
the purposes of the Prospectus Directive and
the requirements of Annex XII to the
Prospectus Directive Regulation will apply.
This pro forma has been annotated to indicate
where the key additional requirements of
Annex XII are dealt with.]
11. Change of Interest Basis or Redemption/
Payment Basis:
[Specify details of any provision for
convertibility of covered bonds into another
interest or redemption/payment basis]
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12. Put/Call Options: [Investor Put]
[Issuer Call]
[(further particulars specified below)]
13. (i) Status of the Covered Bonds: Senior
(ii)
[Date [Board] approval for issuance of
Covered Bonds obtained:]
[•]
(N.B Only relevant where Board (or similar)
authorisation is required for the particular
tranche of Covered Bonds)
14. Method of distribution: [Syndicated/Non syndicated]
PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE
15. Fixed Rate Covered Bond Provisions [Applicable/Not Applicable]
(If not applicable, delete the remaining subparagraphs
of this paragraph)
(i) Interest Rate(s): [•] per cent. per annum [payable
[annually/semi annually/quarterly/monthly/
other (specify)] in arrear]
(ii) Interest Payment Date(s): [[•] in each year up to and including the Final
Maturity Date, or the Extended Final Maturity
Date, if applicable]/[specify other]
(iii) Business Day Convention: Following Business Day Convention/Modified
Following Business Day
Convention/Preceding Business Day
Convention/[specify other]
(iv) Business Day(s): [•]
(v) Additional Business Centre(s): [•]
(vi)
(vii)
Fixed Coupon Amount[(s)]:
(Applicable to Covered Bonds in
definitive form)
Broken Amount(s):
(Applicable to Covered Bonds in
definitive form)
[•] per Calculation Amount
[•] per Calculation Amount payable on the
Interest Payment Date falling [in/on] [•]
(viii) Day Count Fraction: [30/360/Actual/Actual [(ICMA/ISDA)]
/[specify other]] [adjusted/not adjusted] (N.B.
If interest is not payable on a regular basis
(for example, if Broken Amounts are specified)
Actual/Actual (ICMA) may not be a suitable
Day Count Fraction)
(ix) Determination Date: [•] in each year
[Insert regular interest payment dates,
ignoring issue date or maturity date in the case
of a long or short first or last coupon] (This
will need to be amended in the case of regular
interest payment dates which are not of equal
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(x)
Other terms relating to the method of
calculating interest for Fixed Rate
Covered Bonds:
durations)
(N.B. Only relevant where Day Count Fraction
is Actual/Actual (ICMA))
[Not Applicable/Specify details]
16. Floating Rate Covered Bond Provisions [Applicable/Not Applicable]
(i) Interest Period(s): [•]
(If not applicable, delete the remaining sub
paragraphs of this paragraph)
(ii)
Specified Period(s)/Specified Interest
Payment Dates:
[•]
(iii) First Interest Payment Date: [•]
(iv) Business Day Convention: [Floating Rate Convention/Following Business
Day Convention/ Modified Following
Business Day Convention/ Preceding Business
Day Convention/[specify other]]
(v) Business Day(s): [•]
(vi) Additional Business Centre(s): [•]
(vii)
(viii)
(ix)
Manner in which the Interest Rate(s)
is/are to be determined:
Party responsible for calculating the
Interest Rate and Interest Amount (if
not the Principal Paying Agent):
Screen Rate Determination:
[Screen Rate Determination / ISDA
Determination / [specify other]]
[•] shall be the Calculation Agent
• Reference Rate: [•] (Either LIBOR, EURIBOR or other. If
other, provide additional information,
including amendment to fallback provisions in
the Agency Agreement)
• Interest Determination Date(s): [•] (Second London business day prior to the
start of each Interest Period if LIBOR (other
than Sterling or Euro LIBOR or EURIBOR),
first day of each Interest Period if Sterling
LIBOR and the second day on which the
TARGET2 System is open prior to the start of
each Interest Period if EURIBOR or Euro
LIBOR)
• Relevant Screen Page: [•]
N.B. Specify the Interest Determination
Date(s) up to and including the Extended Final
Maturity Date, if applicable
(In the case of EURIBOR, if not Reuters
EURIBOR 01 ensure it is a page which shows
a composite rate or amend the fallback
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provisions appropriately)
• Relevant Time: [For example, 11.00 a.m. London
time/Brussels time]
• Relevant Financial Centre: [For example, London/Euro zone (where Euro
zone means the region comprised of the
countries whose lawful currency is the euro)]
(x)
ISDA Determination:
• Floating Rate Option: [•]
• Designated Maturity: [•]
• Reset Date: [•]
(xi) Margin(s): [+/-][•] per cent. per annum
(xii) Minimum Interest Rate: [•] per cent. per annum
(xiii) Maximum Interest Rate: [•] per cent. per annum
(xiv) Day Count Fraction: [Actual/ Actual (ISDA)
Actual/365 (Fixed)
Actual/365 (Sterling)
Actual/360
30/360
30E/360
30E/360 (ISDA)
Other]
(See Condition 7.13(c)(Business Day, Business
Day Convention, Day Count Fractions and
other adjustments) for alternatives)
[adjusted/not adjusted]
(xv) Fall back provisions, rounding
provisions, denominator and any other
terms relating to the method of
calculating interest on Floating Rate
Covered Bonds, if different from
those set out in the Conditions:
[•]
17. Zero Coupon Covered Bond Provisions [Applicable/Not Applicable]
(i) [Amortisation/Accrual] Yield: [•] per cent. per annum
(ii) Reference Price: [•]
(If not applicable, delete the remaining sub
paragraphs of this paragraph)
(iii)
Any other formula/basis of
determining amount payable:
(Consider applicable Day Count Fraction)
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(iv) Business Day Convention: [Floating Rate Convention/Following Business
Day Convention/ Modified Following
Business Day Convention/Preceding Business
Day Convention/[specify other]]
(v) Business Day(s): [•]
(vi) Additional Business Centre(s): [•]
(vii)
Day Count Fraction in relation to the
determination of the Principal Amount
Outstanding at any time, Early
Redemption Amounts and late
payments:
[Conditions 2 (Definitions), 8.5(a)(iii) (Early
Redemption Amounts) and 8.11 (Zero Coupon
Covered Bond Provisions) apply/specify other]
18. Variable Interest Covered Bond Provisions [Applicable/Not Applicable]
(i) Index/Formula/other variable: [give or annex details]
(If not applicable, delete the remaining subparagraphs
of this paragraph)
(ii)
(iii)
Calculation Agent responsible for
calculating the interest due:
Provisions for determining Coupon
where calculated by reference to
Index and/or Formula and/or other
variable:
[•]
[•]
(iv) Interest Determination Date(s): [•]
(v)
Provisions for determining Coupon
where calculation by reference to
Index and/or Formula and/or other
variable is impossible or impracticable
or otherwise disrupted:
[•] (Include a description of market disruption
or settlement disruption events and adjustment
provisions)
(vi) Interest or Calculation Period(s)/
Specified Interest Payment Dates:
[•]
(vii) Business Day Convention: [Floating Rate Convention/Following Business
Day Convention/Modified Following Business
Day Convention/Preceding Business Day
Convention/other (give details)]
(viii) Business Day(s): [•]
(ix) Additional Business Centre(s): [•]
(x) Minimum Interest Rate: [•] per cent. per annum
(xi) Maximum Interest Rate: [•] per cent. per annum
(xii) Day Count Fraction: [•] [adjusted/not adjusted]
19. Dual Currency Covered Bond Provisions [Applicable/Not Applicable]
[•]
(If not applicable, delete the remaining subparagraphs
of this paragraph)
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(i)
(ii)
(iii)
(iv)
Rate of Exchange/method of
calculating Rate of Exchange:
Calculation Agent, if any, responsible
for calculating the principal and/or
interest due (if not the Principal
Paying Agent):
Provisions applicable where
calculation by reference to Rate of
Exchange impossible or
impracticable:
Person at whose option Specified
Currency(ies) is/are payable:
[give or annex details]
[•]
(Include a description of market disruption or
settlement disruption events and adjustment
provisions)
[•]
(v) Business Day(s): [•]
(vi) Additional Business Centre(s): [•]
PROVISIONS RELATING TO REDEMPTION
20. Issuer Call [Applicable/Not Applicable]
(i) Optional Redemption Date(s): [•]
(If not applicable, delete the remaining subparagraphs
of this paragraph)
(ii)
(iii)
Optional Redemption Amount(s) of
each Covered Bond and method, if
any, of calculation of such amount(s):
(If redeemable in part:
[•] per Calculation Amount
(a)
(b)
Minimum Redemption
Amount:
Maximum Redemption
Amount:
[•] per Calculation Amount
[•] per Calculation Amount
(iv)
Notice period (if other than as set out
in the Terms and Conditions):
[•]
(N.B. If setting notice periods which are
different to those provided in the Terms and
Conditions, the Issuer is advised to consider
the practicalities of distribution of information
through intermediaries for example, clearing
systems and custodians, as well as any other
notice requirements which may apply, for
example, as between the Issuer and the
Principal Paying Agent and the Trustee)
21. Investor Put [Applicable/Not Applicable]
(i) Optional Redemption Date(s): [•]
(If not applicable, delete the remaining sub
paragraphs of this paragraph)
(ii)
Optional Redemption Amount(s) of
each Covered Bond and method, if
[•] per Calculation Amount
- 87 -

any, of calculation of such amount(s):
(iii) Notice period: [•]
(N.B. If setting notice periods which are
different to those provided in the Terms and
Conditions, the Issuer is advised to consider
the practicalities of distribution of information
through intermediaries for example, clearing
systems and custodians, as well as any other
notice requirements which may apply, for
example, as between the Issuer and the
Principal Paying Agent and the Trustee)
22. Final Redemption Amount of each Covered
Bond
[•] per Calculation Amount/specify other/see
Appendix
(N.B. If the Final Redemption Amount is other
than 100 per cent. of the nominal value, the
Covered Bonds will be derivative securities for
the purposes of the Prospectus Directive and
the requirements of Annex XII to the
Prospectus Directive Regulation will apply.
This proforma has been annotated to indicate
where the key additional requirements of
Annex XII are dealt with.)
In cases where the Final Redemption Amount
is Index Linked or other variable linked:
(i) Index/Formula/variable: [give or annex details]
(ii)
Party responsible for calculating the
Final Redemption Amount (if not the
Principal Paying Agent):
[•]
(iii) Provisions for determining Final
Redemption Amount where calculated
by reference to Index and/or Formula
and/or other variable:
(iv) Date for determining Final
Redemption Amount where
calculation by reference to Index
and/or Formula and/or other variable:
(v) Provisions for determining Final
Redemption Amount where
calculation by reference to Index
and/or Formula and/or other variable
is impossible or impracticable or
otherwise disrupted:
[•]
[•]
[•]
(vi) Minimum Final Redemption Amount: [•] per Calculation Amount
(vii) Maximum Final Redemption Amount: [•] per Calculation Amount
23. Early Redemption Amount
Early Redemption Amount(s) per Calculation
Amount payable on redemption for taxation
reasons or on event of default or other early
[•]
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edemption and/or the method of calculating
the same (if required or if different from that
set out in the Conditions):
GENERAL PROVISIONS APPLICABLE TO THE COVERED BONDS
24. Form of Covered Bonds: Bearer Bonds:
[Temporary Global Covered Bond
exchangeable for a Permanent Global Covered
Bond which is exchangeable for Definitive
Covered Bonds [on 60 days' notice given at
any time/only upon an Exchange Event]]
[Temporary Global Covered Bond
exchangeable for Definitive Covered Bond on
[•] days' notice]
[Permanent Global Covered Bond
exchangeable for Definitive Covered Bonds on
[60] days' notice given at any time/only upon
an Exchange Event]]
(N.B. The exchange upon notice should not be
expressed to be applicable if the Specified
Denomination of the Covered Bonds in
paragraph 6 includes language substantially to
the following effect: "[€50,000] and integral
multiples of [€1,000] in excess thereof up to
and including [€99,000].")
Registered Bonds
25. New Global Note Form: [Yes]/[No]
26. Additional Financial Centre(s) or other special
provisions relating to payment dates:
27. Talons for future Coupons or Receipts to be
attached to Definitive Covered Bonds (and
dates on which such Talons mature):
28. Details relating to Partly Paid Covered Bonds:
amount of each payment comprising the Issue
Price and date on which each payment is to be
made and consequences (if any) of failure to
pay, including any right of the Issuer to forfeit
the Covered Bonds and interest due on late
payment:
[Not Applicable/give details]. Note that this
item relates to the date and place of payment,
and not interest period end dates, to which
items [15(ii), 16(vi) and 18(ix)] relates]
[Yes/No. If yes, give details]
[Not Applicable/give details]
(N.B. a new form of Temporary Global
Covered Bond and/or Permanent Global
Covered Bond may be required for Partly Paid
issues)
29. [Details relating to Instalment Covered
Bonds:]
(i) Instalment Amount(s): [Not Applicable/give details]
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(ii) Instalment Date(s): [Not Applicable/give details]
30. Redenomination, renominalisation and
reconventioning provisions:
[Not Applicable]]
31. Consolidation provisions: [Not Applicable/The provisions [in Condition
20 (Further Issues) apply]
32. Other terms or special conditions: [Not Applicable/give details]
DISTRIBUTION
(When adding any other final terms
consideration should be given as to whether
such terms constitute a "significant new
factor" and consequently trigger the need for a
supplement to the Base Prospectus under
Article 16 of the Prospectus Directive.)
33. (i) If syndicated, names of Managers: [Not Applicable/give names, addresses and
underwriting commitments]
(ii) Stabilising Manager(s) (if any): [Not Applicable/give name]
34. If non-syndicated, name of Dealer: [Not Applicable/give name]
35. (i) U.S. Selling Restrictions: [Reg. S Compliance Category; TEFRA C/
TEFRA D/ TEFRA not applicable]
(ii) Additional selling restrictions: [Not Applicable/give details]
PURPOSE OF FINAL TERMS
These Final Terms comprise the final terms required for issue and admission to trading on the regulated
market of the [specify relevant regulated market] of the Covered Bonds described herein pursuant to the
€3 billion Residential Mortgage Loans Covered Bond Programme of Marfin Egnatia Bank S.A.
RESPONSIBILITY
The Issuer accepts responsibility for the information contained in these Final Terms. [(Relevant third
party information) has been extracted from (specify source). The Issuer confirms that such information
has been accurately reproduced and that, so far as it is aware, and is able to ascertain from information
published by (specify source), no facts have been omitted which would render the reproduced information
inaccurate or misleading.]
Signed on behalf of Marfin Egnatia Bank S.A.:
By: ............................................
Duly authorised
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PART B – OTHER INFORMATION
1. LISTING
(i) Admission to trading: [Application has been made by the Issuer (or
on its behalf) for the Covered Bonds to be
admitted to trading on the regulated market of
the [specify relevant regulated market (for
example the Bourse de Luxembourg, the
London Stock Exchange's Gilt Edged and
Fixed Interest Market or the Regulated Market
of the Irish Stock Exchange) and if relevant,
admission to an official list (for example, the
Official List of the U.K. Listing Authority)]
with effect from [•].] [Application is expected
to be made by the Issuer (or on its behalf) for
the Covered Bonds to be admitted to trading
on the [specify relevant regulated market (for
example the Bourse de Luxembourg, the
London Stock Exchange's Gilt Edged and
Fixed Interest Market or the Regulated Market
of the Irish Stock Exchange) and if relevant,
admission to an official list (for example, the
Official List of the U.K. Listing Authority)]
with effect from [•].] [Application has been
made to the Irish Stock Exchange for the
Covered Bonds to be admitted to the Official
List and trading on its regulated market.] [Not
Applicable.]
(Where documenting a fungible issue need to
indicate that original Covered Bonds are
already admitted to trading.)
(ii)
Estimate of total expenses related to
admission to trading:
[•]
2. RATINGS
Ratings:
The Covered Bonds to be issued have been
rated:
[S & P: [•]]
[Moody's: [•]]
[[Fitch: [•]]
[[Other]: [•]]
(The above disclosure should reflect the rating
allocated to Covered Bonds of the type being
issued under the Programme generally or,
where the issue has been specifically rated,
that rating.)
N.B. Consult the relevant Rating Agencies in
relation to Covered Bonds which may have a
Final Redemption Amount of less than 100 per
cent. of the nominal value.
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3. [SWAPS
Interest Rate Swap Provider:
Covered Bond Swap Provider:
Nature of Covered Bond Swap:
[•]
[•]
[Forward Starting/Non-Forward Starting]
4. [INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE
ISSUE/OFFER]
Include a description of any interest, including conflicting ones, that is material to the issue/offer,
detailing the persons involved and the nature of the interest. May be satisfied by the inclusion of
the following statement:
"Save as discussed in ["Subscription and Sale"], so far as the Issuer is aware, no person involved
in the offer of the Covered Bonds has an interest material to the offer."]
[(When adding any other description, consideration should be given as to whether such matters
described constitute "significant new factors" and consequently trigger the need for a
supplement to the Prospectus under Article 16 of the Prospectus Directive.)]
5. [REASONS FOR THE OFFER, ESTIMATED NET PROCEEDS AND TOTAL
EXPENSES
(i) [Reasons for the offer: [•]
(ii) [Estimated net proceeds:] [•]
(iii) [Estimated total expenses: [•]
6. YIELD (Fixed Rate Covered Bonds only)
(See ["Use of Proceeds"] wording in Base
Prospectus – if reasons for offer differ from
making profit and/or hedging certain risk,
those reasons will need to be included.)]
(If proceeds are intended for more than one
use will need to split out and present in order
of priority. If proceeds insufficient to fund all
proposed uses state amount and sources of
other funding.)
(Expenses are required to be broken down into
each principal intended "use" and presented in
order of priority of such "uses".)
(If the Covered Bonds are derivative securities
for which Annex XII of the Prospectus
Directive Regulation applies it is only
necessary to include disclosure of net proceeds
and total expenses at (ii) and (iii) above where
disclosure is included at (i) above.)
Indication of yield:
[•]
[The yield is calculated at the Issue Date on
the basis of the Issue Price. It is not an
indication of future yield.]
7. HISTORIC INTEREST RATES: (Floating Rate Covered Bonds only)
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Details of historic [LIBOR/EURIBOR/other] rates can be obtained from [Reuters]
8. PERFORMANCE OF INDEX/FORMULA/OTHER VARIABLE AND OTHER
INFORMATION CONCERNING THE UNDERLYING
Need to include details of where past and future performance and volatility of the
index/formula/other variable can be obtained. Where the underlying is an index need to include
the name of the index and a description if composed by the Issuer and if the index is not
composed by the Issuer need to include details of where the information about the index can be
obtained. Where the underlying is not an index need to include equivalent information. Include
other information concerning the underlying required by Paragraph 4.2 of Annex XII of the
Prospectus Directive Regulation.]
[(When completing this paragraph, consideration should be given as to whether such matters
described constitute "significant new factors" and consequently trigger the need for a
supplement to the Prospectus under Article 16 of the Prospectus Directive.)]
The Issuer [intends to provide post issuance information [specify what information will be
reported and where it can be obtained]] [does not intend to provide post issuance information].
9. PERFORMANCE OF RATE[S] OF EXCHANGE (Dual Currency Covered Bonds only)
[Need to include details of where past and future performance and volatility of the relevant
rate[s] can be obtained and a clear and comprehensive explanation of how the value of the
investment is affected by the underlying and the circumstances when the risks are most evident.]
[(When completing this paragraph, consideration should be given as to whether such matters
described constitute "significant new factors" and consequently trigger the need for a
supplement to the Base Prospectus under Article 16 of the Prospectus Directive.)]
10. TRADEABLE AMOUNTS
So long as the Covered Bonds are represented by a Global Covered Bond and [specify relevant
clearing system(s)] so permit, the Global Covered Bond shall be tradeable in minimum principal
amounts of [€50,000]/[specify equivalent to €50,000 if Global Covered Bond not denominated in
Euro] and integral multiples of [•] in addition thereto.
[If item 24 of Part A indicates that the Global Covered Bond is exchangeable for definitive
Covered Bonds at the option of the Covered Bondholders, the Covered Bonds will be tradeable
only in principal amounts of at least the Specified Denomination.]
11. OPERATIONAL INFORMATION
(i) ISIN Code: [•]
(ii) Common Code: [•]
(iii)
(iv)
(insert here any other relevant codes
such as CUSIP and CINS codes):
Any clearing system(s) other than
Euroclear Bank S.A./N.V. and
Clearstream Banking, société
anonyme and the relevant
identification number(s):
[•]
[Not Applicable/give name(s) and number(s)]
(v) Delivery: Delivery [against/free of] payment
(vi)
Names and addresses of initial Paying
Agent(s):
[•]
(vii) Names and addresses of additional [•]
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(viii)
Paying Agent(s) (if any):
Intended to be held in a manner which
would allow Eurosystem eligibility:
[Yes][No] [Note that the designation "yes"
simply means that the Covered Bonds are
intended upon issue to be deposited with one
of the ICSDs as common safekeeper and does
not necessarily mean that the Covered Bonds
will be recognised as eligible collateral for
Eurosystem monetary policy and intra day
credit operations by the Eurosystem either
upon issue or at any or all times during their
life. Such recognition will depend upon the
ECB being satisfied that Eurosystem eligibility
criteria have been met.] [Include this text if
"yes" selected in which case the Covered
Bonds must be issued in NGN form] *
* Required for derivative securities to which Annex XII to the Prospectus Directive Regulation applies.
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USE OF PROCEEDS
The net proceeds from each issue of Covered Bonds will be applied by the Issuer for its general corporate
purposes. If, in respect of any particular issue, there is a particular identified use of proceeds, this will be
stated in the applicable Final Terms.
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SUMMARY OF THE GREEK COVERED BOND LEGISLATION
The following is a summary of the provisions of the Greek Covered Bond Legislation relevant to the
transactions described in this Base Prospectus and of which prospective Covered Bondholders should be
aware. This summary is not a complete description of all aspects of the Greek legislative and regulatory
framework pertaining to covered bonds and prospective Covered Bondholders should also read the
detailed information set out elsewhere in this Base Prospectus.
Introduction
The transactions described in this Base Prospectus are the subject of the Greek Covered Bond Legislation.
The Greek Covered Bond Legislation includes Article 91 of law 3601/2007 (such law being published in
the Government Gazette No. 178/A/1-8-2007 and dealing with, inter alia, the capital adequacy of
investment firms and credit institutions, by implementation of Directive 2006/48/EC and Directive
2006/49/EC), as amended by Article 48 of law 3693/2008 (published in the Government Gazette No.
174/A/25-8-2008) and the Act of the Governor of the Bank of Greece No. 2598/2007 entitled "Regulatory
framework for covered bonds issued by credit institutions" and published in the Government Gazette No.
2236/B/21-11-2007 (the "Secondary Covered Bond Legislation"). The Greek Covered Bond Legislation
has been enacted, with a view to, inter alia, complying with the standards of article 22(4) of Directive
85/611/EEC, and entitles credit institutions to issue (directly or through a special purpose vehicle)
covered bonds with preferential rights in favour of the holders thereof and certain other creditors over a
cover pool comprised by certain assets discussed in further detail below.
Article 91
Covered bonds may be issued by credit institutions pursuant to the provisions of Article 91 and the
general provisions of Greek law on bonds (articles 1-9, 12 and 14 of law 3156/2003).
In deviation from the Greek general bond law provisions, the bondholders' representative (also referred to
as the trustee) may be a credit institution or a subsidiary company of a credit institution entitled to provide
services in the European Economic Area. Unless otherwise set out in the terms and conditions of the
bonds the trustee is liable towards bondholders for wilful misconduct and gross negligence.
Cover Pool – composition of assets
Paragraph 3 of Article 91 provides that the assets forming part of the cover pool may include receivables
deriving from loans and credit facilities of any nature and, on a supplementary basis, receivables deriving
from financial instruments (such as, but not limited to, receivables deriving from interest rate swap
contracts), deposits with credit institutions and securities, as specified by a decision of the Bank of
Greece.
In the Secondary Covered Bond Legislation, the Bank of Greece has defined the cover pool eligible assets
as follows:
(a)
(b)
certain eligible assets set out in paragraph 8(b) of Section B of the Bank of Greece Act No.
2588/20-8-2007 ("Calculation of Capital Requirements for Credit Risk according to the
Standardised Approach"), including claims deriving from loans and credit facilities of any nature
secured by residential real estate, commercial properties, ships and Government debt securities;
and
derivative financial instruments satisfying certain requirements as to the scope thereof and the
capacity of the counterparty.
The Bank of Greece has also set out requirements as to the substitution and replacement of cover pool
assets by other eligible assets (including, inter alia, marketable assets, as defined in the Act of the
Monetary Policy Council No. 54/27-2-2000).
Benefit of a prioritised claim by way of statutory pledge
Claims comprised in the cover pool are named in a Registration Statement signed by the issuer and the
trustee and registered in a summary form including the material features thereof, in accordance with
article 3 of law 2844/2000. The form of the Registration Statement has been enacted by Ministerial
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Decree No. 95630/2006, published in the Greek Government Gazette section B (issue number
1858/12.9.2008) of the Minister of Justice. Receivables forming part of the cover pool may be substituted
with others and receivables may be added to the cover pool in the same manner.
Holders of covered bonds and certain other creditors having claims relating to the issuance of the covered
bonds (such as, inter alia, the trustee, the servicer and financial derivatives counterparties) named as
secured creditors in the terms and conditions of the covered bonds are secured (by operation of paragraph
4 of Article 91) by a statutory pledge over the cover pool, or, where a cover pool asset is governed by
foreign law, by a security in rem created under applicable law.
With respect to the preferential treatment of covered bondholders and other secured creditors, pursuant to
paragraph 6 of Article 91, claims that are subject to a statutory pledge rank ahead of claims referred to in
article 975 of the Code of Civil Procedure (a general provision of Greek law on creditors' ranking), unless
otherwise set out in the terms and conditions of the covered bonds. It is also clarified that in the event of
bankruptcy of the issuer, covered bond holders and other creditors secured by the statutory pledge shall be
satisfied in respect of the portion of their claims that is not paid off from the cover pool in the same
manner as unsecured creditors from the remaining assets of the issuer.
To ensure bankruptcy remoteness of the assets in the cover pool, paragraph 7 of Article 91 provides that
upon registration of the Registration Statement with the public registry, the validity of the issue of the
covered bonds, the creation of the statutory pledge and the real security governed by foreign law, if any,
the payments to covered bondholders and other creditors secured by the statutory pledge, as well as of the
entry into of any agreement relating to the issue of covered bonds will not be affected by the
commencement of insolvency proceedings in respect of the issuer.
Paragraph 8 of Article 91 safeguards the interests of covered bondholders and other secured creditors in
providing that assets included in the cover pool may not be attached/seized or disposed of by the issuer
without the written consent of the trustee, unless otherwise set out in the terms and conditions of the
covered bonds.
Paragraph 9 of Article 91 deals with the servicing of the cover pool. In particular, it provides that the
terms and conditions of the covered bonds may specify that either from the beginning or following the
occurrence of certain events, such as, but not limited to, the commencement of insolvency proceedings in
respect of the issuer, the trustee may assign to third parties or carry out itself the collection and servicing
of the cover pool assets by virtue of an analogous application of the Greek provisions on servicing
applicable to securitisations (paragraphs 14 through 16 of article 10 of law 3156/2003). In the event of
the issuer's insolvency the Bank of Greece may appoint a servicer, if the trustee fails to do so. Sums
deriving from the collection of the receivables that are covered by the statutory pledge and the liquidation
of other assets covered thereby are required to be applied towards the payment of the covered bonds and
other claims secured by the statutory pledge pursuant to the terms and conditions of the covered bonds.
Paragraph 11 of Article 91 confirms that covered bonds may be listed on a regulated market within the
meaning of paragraph 14 of article 2 of law 2396/1996 (GG 73 A), as in force, and offered to the public
pursuant to applicable provisions.
Article 91 authorises the Bank of Greece to deal both with specific issues, such as the definition of the
cover pool, the ratio between the value of the cover pool assets and that of the covered bonds, the method
for the evaluation of cover pool assets and requirements to ensure adequacy of the cover pool and any
details in general for the implementation of Article 91.
The Secondary Covered Bond Legislation
The Secondary Covered Bond Legislation sets out certain requirements in relation to the issuer's risk
management and internal control systems; the minimum amount of regulatory own funds on a
consolidated basis and capital adequacy ratio; make-up and eligibility criteria of the initial cover pool and
the substitution and replacement of cover pool assets; the ratio between the value of the cover pool assets
and the value of the covered bonds, the ratio between the net present value of liabilities under the covered
bonds and the net present value of the cover assets, the ratio between interest payments on the covered
bonds and interest payments on cover pool assets and the revaluation of the real estate property which is
security for any mortgage loans in the cover pool; the performance of quarterly reviews by the servicer
and annual audits thereof by independent chartered accountants; the appointment of a trustee; measures to
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e taken in the event of insolvency of the issuer; the submission of documents to obtain approval by the
Bank of Greece in respect of the issuance of covered bonds; the risk weighting of covered bonds; and data
reporting and disclosure requirements.
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INSOLVENCY OF THE ISSUER
The Greek Covered Bond Legislation contains provisions relating to the protection of the Covered
Bondholders and other Secured Creditors upon the insolvency of the Issuer.
In the event of insolvency of the Issuer, the Greek Covered Bond Legislation (in conjunction with certain
provisions of law 3588/2007 on bankruptcy) provides that the Cover Pool will at all times remain
segregated from the insolvency estate of the Issuer until payment of any amounts due to the Secured
Creditors has been made in full. Upon registration of the Registration Statements with the public registry,
the issue of the Covered Bonds, the creation of the Statutory Pledge and the security governed by foreign
law, the payments to Covered Bondholders and other Secured Creditors and the entry into of any
agreement relating to the issue of Covered Bonds will not be affected by the commencement of
insolvency proceedings in respect of the Issuer. All collections from the Cover Pool Assets shall be
applied solely towards payment of amounts due to the Covered Bondholders and other Secured Creditors.
Pursuant to the Greek Covered Bond Legislation, both before and after the commencement of insolvency
proceedings in respect of the Issuer the Cover Pool may be autonomously managed until full payment of
the amounts due to the Covered Bondholders and the other Secured Creditors has been made. To ensure
continuation of the servicing in the event of insolvency of the Issuer, the Greek Covered Bond Legislation
provides for the substitution of the Servicer upon the insolvency of the Issuer.
In the event that no substitute servicer is appointed pursuant to the Transaction Documents, continuation
of the servicing is ensured as follows:
(a)
(b)
in the event of the Issuer’s insolvency under law 3601/2007, the servicing of the Cover Pool will
be carried out by a person appointed by the Bank of Greece. Such person may either be (i) an
administrator or a liquidator (under articles 63 or 68 respectively of law 3601/2007), and in such
an event servicing of the Cover Pool will be included in their general powers over the Issuer’s
assets; or (ii) in addition to such persons, a person specifically appointed as servicer to carry out
the servicing of the Cover Pool. Any such person appointed in as described in paragraph (i) or (ii)
above shall be obliged to servicer the Cover Pool in accordance with the terms of the Servicing
Deed; and
in the event of the Issuer’s insolvency under the provisions of the Greek Bankruptcy Code (law
3588/2007), a bankruptcy trustee will be appointed by the court. In this case the Trustee or the
Bank of Greece may appoint a third party to service the Cover Pool. It should also be noted that
commencement of insolvency proceedings under law 3601/2007 will result in the postponement
and/or cancellation of the insolvency proceedings under law 3588/2007, if such proceedings have
already been commenced.
Any of the aforementioned parties performing the role of servicer will be required to treat the Cover Pool
as a segregated pool of assets on the basis of the segregation provisions of Article 91 and in accordance
with the Servicing Deed, the terms of which, including, inter alia, the termination, substitution and
replacement provisions, will at all times apply.
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DESCRIPTION OF THE ISSUER
1. Overview of Marfin Egnatia Bank S.A. and the Marfin Egnatia Bank Group
Marfin Egnatia Bank S.A. (registration no. 6072/06/B/86/11) (the "Bank"), operates as a société anonyme
in compliance with Greek legislation, and in particular with the requirements of Company Law
2190/1920, the requirements of the Law 3601/2007 on credit institutions as well as the requirements of
other similar legislation. The Bank's registered office is in Greece and its shares are traded on the Athens
Stock Exchange. The corporate registered office of the Bank is 4, Danaidon Street, 546 26 Thessaloniki
Greece and its telephone no. is +30 817 0000. The auditors of the Bank are Grant Thornton, being a
member of the Institute of Certified Public Accountants of Greece and also registered with PCAOB
(Public Company Accounting Oversight Board).
The Bank and its subsidiaries (together the "Group”), operate mainly in the financial sector and provide a
broad range of financial and banking services to individuals and businesses.
The Group’s primary activities are in Greece, but it also has subsidiaries that operate in Romania. As of
30 June 2008, the Group employed a total of 3,401 people.
The Bank, (S.A. Records N. 6072/06/Β/86/11), which is the parent company of the Group, was created
following the merger of Marfin Bank S.A. (R. No. 6079/06/Β/86/18) and Laiki Bank (Hellas) S.A. (R.
No. 27084/06/Β/92/16) with Egnatia Bank S.A. (together the "Merged Banks"). The merger took effect
from 29 June 2007 which is the date of the registration in the Registry of Societe Anonyme companies of
decision No. K-2 9985/29.06.2007 of the Ministry of Development, which approved the merger.
Furthermore, in accordance with the aforementioned decision of the Ministry of Development, a
modification to Article 1 of the Bank’s Charter of Incorporation was approved pursuant to which the
name and distinctive title of the Bank were changed to Marfin Egnatia Bank S.A., under the distinctive
titles Marfin Εγνατια Τραπεζα and Marfin Egnatia Bank. The Bank’s Credit Committee approved the N.
245/3/08.06.2007 decision validating the merger.
The date of incorporation of the Bank is 22 July 1991, which is the date of incorporation of the former
Egnatia Bank S.A. as the first incorporated of the Merged Banks.
Following the completion of the Merger the Bank has assumed, in every legal respect and without
needing any further action, all the rights and liabilities of the Merged Banks which have each legally
ceased to operate as independent legal entities, automatically without the need for liquidation proceedings
(Article 75 of the Law 2190/1920).
The objective of the Bank, in accordance with Article 3 of its Charter of Incorporation, is to operate in
Greece or abroad to provide banking services (as recognised by Greek law), on its own behalf and on the
behalf of third parties.
The consolidated financial statements of the Group are prepared in accordance with International
Financial Reporting Standards (I.F.R.S), as these have been adopted by the European Union, including all
amendments issued by the International Accounting and Auditing Board (I.A.S.B.)
The Bank is a subsidiary of Marfin Popular Bank Public Co. Ltd., which owns 97% of the Bank’s
ordinary shares. None of the Bank’s shares carry any special rights of control and the Bank's Articles of
Association make no provision for any limitations on voting rights. The Bank is not aware of any
agreements among shareholders entailing limitations on the transfer of shares or limitations on voting
rights, nor is there any provision in the Articles of Association providing for the possibility of such
agreements to occur.
The Bank is listed on the ATHEX, and, as a listed entity, is supervised by the HCMC (Hellenic Capital
Markets Committee), and, being a bank, by the Bank of Greece. The Bank is subject to the general
Corporate Governance rules for banks and listed companies, and in addition to all the minority protection
rules of Greek Company Law.
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1.1 History of Individual Banks prior to the Merger
1.1.1 Marfin Bank
1981 Incorporation of Banque Franco – Hellenique de Commerce International et
Maritime, Societe Anonyme (S.A.).
1994 Banque Franco – Hellenique de Commerce International et Maritime, Societe
Anonyme (S.A.) is renamed Credit Lyonnais Grece S.A.
1998 Credit Lyonnais Grece S.A. is acquired by Piraeus Group and renamed Piraeus
Prime Bank S.A.
2002 Piraeus Prime Bank S.A. is renamed Marfin Bank S.A. on the next change of
ownership.
2004 Marfin Financial Group Holdings S.A (the "Marfin Group") was created
through the merger of Comm Group Mass Media and Communications
Holdings S.A, Marfin Classic Closed End Funds S.A and Maritime and
Financial Investments Holdings S.A. The Marfin Group participates actively in
the local banking market through its ownership of Marfin Bank S.A.
2006 As part of its declared strategy for consolidation in the local banking sector, the
Marfin Group acquires 9.98% of Marfin Popular Bank Public Co Ltd's
(formerly known as Cyprus Popular Bank Public Company Ltd) share capital in
February 2006. In March 2006, it acquires a controlling interest of 34.45% in
Egnatia Bank S.A.. This is subsequently increased to 44.95%. In May 2006,
Dubai Financial LLC acquires 31.5% of the Marfin Group's total share capital.
With regard to the Marfin Group's operational restructuring, Marfin Popular
Bank Public Co Ltd submits public tender offers for the acquisition of 100% of
the Marfin Group's share capital, 100% of Egnatia Bank S.A.'s shares and
convertible bonds and 19.79% of Laiki Bank (Hellas) share capital. It also
manages to acquire 95.30% of the share capital of the Marfin Group, 86.25% of
that of Egnatia Bank S.A., and 19.79% of that of Laiki Bank (Hellas).
2007 The Marfin Group is renamed Marfin Investment Group Holdings S.A. (MIG)
following a shareholders' meeting on 29 March 2007. Its objectives are to focus
on buy outs and equity investments in the South Eastern Region. Following a
meeting of its board of directors on 10 January 2007, the Marfin Group transfers
its 100% stake in Marfin Bank S.A. to Marfin Popular Bank Public Co Ltd. The
transaction is concluded on 4 May 2007.
1.1.2 Egnatia Bank
1936 Krokomouzelis Bank is incorporated in Lamia.
1975 Krokomouzelis Bank is renamed Bank of Central Greece S.A.
1991 Incorporation of Egnatia Bank S.A.
1999 The Bank of Central Greece S.A. merges with Egnatia Bank S.A. The new
company is named Egnatia Bank S.A. and has a combined network of 46
branches throughout Greece. The shares of Egnatia Bank S.A. are listed on the
Athens Stock Exchange.
2000 Egnatia Bank S.A acquires BNP-Dresdner (Romania) S.A. The latter is renamed
Egnatia Bank (Romania) S.A.
2005 The Marfin Group acquires a 10.07% stake in Egnatia Bank S.A.. The latter’s
network consists of 69 branches and 9 business centres.
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2006 The Marfin Group increases its stake in Egnatia Bank S,A. to 44.94%
throughout the year 2006. Following Marfin Popular Bank Public Co Ltd's
submission of its public tender offer to acquire Egnatia Bank S.A.'s total share
capital, the Marfin Group fully liquidates its investment in Egnatia Bank S.A.
1.1.3 Laiki Bank
1992 Incorporation of European Popular Bank. Cyprus Popular Bank owns 58% of
European Popular Bank's share capital. Its other shareholders include HSBC
(6%), Greek and Cypriot investors.
1999 European Popular Bank is renamed Laiki Bank (Hellas) S.A.
2006 In December 2006, Marfin Popular Bank Public Co Ltd acquires 95.30% of
Marfin Financial Group Holdings S.A. including Marfin Bank S.A., 86.25% of
Egnatia Bank S.A. and increases its shareholding in Laiki Bank (Hellas) to
100%.
2007 The three way merger of the three Greek banks is completed and takes effect
from 29 June 2007 which is the date of registration in the Registry of Societe
Anonyme companies of decision No. K-2 9985/29.06.07 of the Ministry of
Development which approved the merger.
1.2 Summary Financial Information
As of 30 June 2008, the Group’s consolidated total assets totalled €16.9 billion, compared to
€13.7 billion as of 31 December 2007. The Group's distributable profit for the first six months of
the year ended 30 June 2008 was €61 million compared to €62 million for the corresponding
period in 2007. As of 30 June 2008, the Group’s shareholders' funds were €846 million.
The following table shows a summary of the Group's financial results for the first six months
ended 30 June 2007 and 2008, as well as the Group's summary balance sheet figures as of 31
December 2007 and 30 June 2008. These figures are taken from the financial report published for
the first half of 2008.
The Group 2008 2007
(€'000)
Operating Income……………………………………………………... 240,392 227,232
Profit before tax……………………………………………………….. 85,545 86,433
Profit after tax distributed to the Shareholders……………………….. 60,761 61,727
Loans and advances to customers (net of impairment)……………... 11,756,468 9,648,282
Deposits from customers……………………………………………… 11,006,913 9,300,747
Total Assets 16,880,162 13,714,961
2. Strategy
The key strategy of the Bank is to leverage on the recently completed three-way merger where emphasis
is placed on sectors with high growth prospects, such as retail banking, credit cards, asset management,
private banking and international business banking. Demographics and other socio-economic trends are
the key guides for the long-term business development of the Bank.
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The range of services provided by the Bank will be expanded to include new products that satisfy the
needs of customers and reflect changing market conditions, as well as plain vanilla products for retail
customers. The Bank expects to see a greater focus on its sales efforts with the introduction of
performance-related remuneration schemes for its employees.
The Bank aims to rapidly develop its operations through
• Significantly improving utilisation of existing distribution channels.
• Increasing marketing budget.
• Product launching accompanied by improved customer segmentation.
• Expanding distribution capacity through increased number of branches, from 160 at the end of
2007 to 295 by the end of 2010.
• Leveraging on Marfin Popular Bank’s strong investment banking services through increasing the
focus on structured finance lending.
• Increasing its market share through product innovation.
3. Marfin Egnatia Bank Group Structure
The main subsidiary companies of the Marfin Egnatia Bank Group, as of 31 December, 2007, were as
follows:
Company Name
Effective
Shareholding
Country of
incorporation
Issued Capital
Activity Sector
Investment Bank
of Greece S.A
92.04% Greece EUR107,421,587 Banking &
Brokerage
Services
Laiki Attalos S.A. 97.51% Greece EUR3,005,440 Brokerage
Services
Marfin Global
Asset
Management
Mutual Funds
Management S.A.
Marfin Leasing
S.A.
Marfin Factors &
Forfaiters S.A.
98.57% Greece EUR8,573,100 Mutual Funds &
Private Portfolios
Management &
Investment
Counselling
100.00% Greece EUR35,366,075 Financing leasing
of property &
equipment
100.00% Greece EUR10,870,300 Brokerage of
business's
accounts
receivable
Marfin Life S.A. 100.00% Greece EUR2,750,000 Life Insurance
Services
Marfin Insurance
Brokers S.A.
Marfin Egnatia
Fin S.A.
100.00% Greece EUR480,000 Insurance services
according to
article 2, law
1569/85
99.00% Greece EUR293,000 Auto dealing,
motocycles,
yachts, machinery,
agencies, auto-
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enting, promotion
of products and
services of
financial and
tourism divisions
IBG Management
Mutual Funds &
Venture Capital
S.A.
92.04% Greece EUR860,000 Management of
Mutual Funds &
Venture Capital
IBG Capital S.A. 92.03% Greece EUR1,467,500 Holding & Real
Estate Company
Egnatia Bank
Travel Ltd
Obafemi Holdings
Ltd
Egnatia Properties
SRL
Marfin Securities
(Cyprus) Ltd
Egnatia Bank
Romania S.A.
Egnatia Leasing
Romania S.A.
99.00% Greece EUR18,000 Tourism business
& services
100.00% Cyprus EUR1,741 Holding company
100.00% Romania EUR10,000 Real estate
92.04% Cyprus EUR3,044,993 Brokerage
Services
98.98% Romania EUR21,919,771 Banking Services
99.00% Romania EUR208,524 Financing leasing
of property &
equipment
IBG Investments
S.A.
92.04% British Virgin
Islands
EUR450,000
Investing Services
Egnatia Finance
Plc
MFG Capital
Partners Ltd
100.00% United Kingdom EUR18,250 SPV for the issue
of bond loans
70% (Ordinary) United Kingdom EUR809,967 Hedge Fund
Management
Source: Annual Report of the Group for the year 2007.
4. Structure of Shareholder’s Capital *
As at 31 December 2007 the Bank’s share capital amounted to €366,555,865.82 divided into 288,626,666
ordinary nominal shares with voting rights, and nominal value per share of €1.27.
The fluctuations in share capital during the year 2007 were as follows:
According to Egnatia Bank’s Board of Directors’ decisions of 8 January 2007, 7 February 2007, and 7
March 2007, and as a result of the conversion of 1,330 convertible bonds to ordinary nominal shares, and
10 convertible bonds to preference nominal shares, the share capital of the Bank for the period 1 January
2007 to 26 March 2007 reached the amount of €122,173,345.71, divided into 93,288,059 ordinary
nominal shares and 11,133,604 preference nominal shares each of nominal value €1,17. Altogether
totalling 104,421,663 ordinary and preference nominal shares.
* Taken from the Explanatory Report of the Board of Directors of the Bank addressed to the Annual
General Assembly of the Shareholders.
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Following the decision on 21 June 2007 of the Extraordinary General Assembly of the Shareholders of
Egnatia Bank, the merger with the other Merged Banks was approved in accordance with articles 68 par.
2 and 69 par. 77 of Law 2190/1920, article 16 of Law 2515/1997, articles 1 to 5 of Law 2166/1993 and
general commercial law. As a result the total share capital increase was €244,380,488.11.
Following such decision: (a) the nominal value of each of the Bank’s shares was increased from €1.17 to
€1.27 and (b) the cancellation of preference shares with no voting rights and their conversion to ordinary
shares with voting rights, and the corresponding amendment of article 7 par. 1 of the company’s Articles
of Association was approved. As a result of these developments the Bank’s share capital was
€366,553,833.82 divided into 288,625,066 ordinary nominal shares with nominal value per share of
€1.27.
Furthermore, in accordance with the decision of the Board of Directors on 31 December 2007 and due to
the conversion of 1,600 convertible bonds into ordinary nominal shares with nominal value per share of
€1.27, the share capital of the Bank for the period 27 March 2007 to 6 December 2007 increased by the
amount of €2.032. As a result the Bank’s share capital amounted to €366,555,865.82 divided into
288,626,666 ordinary nominal shares with nominal value per share of €1.27.
It should be noted that following the conversion of the convertible bonds into ordinary nominal shares, on
31 December 2007 the remaining (Athens Stock Exchange listed) bonds amounted to 300,680 with
nominal value per bond of €3.20 convertible into 300,680 ordinary nominal shares of the Bank with
voting rights.
The Bank’s shares are ordinary, nominal and undivided, registered and listed for trading under the Special
Stock Exchange Characteristics category on the Athens Stock Exchange, and have been issued in
accordance with Law 2190/1920 and the Bank’s Articles of Association.
Each share provides privileges prescribed by the Law and the Articles of Association. In particular, every
shareholder is entitled to the receipt of a minimum mandatory dividend distributed annually in accordance
with the Law and the Articles of Association of the Bank and decisions of the General Assemblies of the
Bank’s Shareholders.
Shareholders are also entitled to return of paid up capital from the proceeds of the liquidation of the
Bank’s assets in the event of the Bank being wound up, in accordance with Law provisions and the
Articles of Association.
Shareholders exercise their rights in connection with the Bank’s Management only through the General
Assembly. Each share entitles the holder to a single vote. The liability of the Shareholders is limited to
the nominal value of the shares they hold.
Recent Developments
Increase in share capital of the Bank's subsidiary EGNATIA BANK ROMANIA S.A.: In June 2008, further
to the implementation of Egnatia Bank Romania S.A.'s business plan, its share capital was increased by
EUR 20,000,000 following the issue of 729,500,000 new shares.
The Bank's Share capital: In the first 6-month period that ended on 30 June 2008, the share capital and
share premium of the Bank increased by EUR 290,000 and EUR 490,000 respectively following the
conversion of 228,470 ordinary bonds of the Convertible Bond Loan issued on 21 January 2003 into
ordinary shares.
5. Management of Marfin Egnatia Bank S.A.
The Board of Directors at its meeting on 29 February 2008 reorganized its body as follows:
The Chairman (Non executive member):
The Vice Chairman (Non executive member):
The Managing Director (Executive member):
Vassilios N. Theocharakis
Alexandros K. Mpakatselos
Konstantinos Vassilakopoulos
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Executive members:
Andreas E. Vgenopoulos
Efthimios T. Bouloutas
Androniki. D. Plakomichelaki
Fotios D. Karatzenis
Non executive members:
Panagiotis I. Theocharakis
Despina V. Theocharaki
Non executive independent members:
Panagiotis Κ. Throuvalas
Markos A. Foros
VASSILIOS THEOCHARAKIS - CHAIRMAN OF THE BOARD OF DIRECTORS
Mr. Vassilios Theocharakis is a founding member, one of the major shareholders and President of Egnatia
Bank S.A. Born in Piraeus, Greece in 1930, Mr. Theocharakis is a graduate of the Law Faculty of Athens
University. He is fluent in both English and French. He served in the Greek Army as an officer. In
parallel with his studies at the University, he attended painting classes for five years at the atelier of the
reputed painter Spiros Papaloukas. He joined the family business at the age of 17. Since 1980 he has been
the President and Managing Director of the Theocharakis Group of Companies. Under his leadership and
management, the Group has grown and expanded rapidly and several new companies have been
established. For more than 40 years now Mr. Vassilios Theocharakis has maintained a continuous and
consistent business and artistic presence in Greece, enjoying several distinctions. He has participated in
several Government Committees and is a member of the Industrial & Commercial Chamber as well as the
Fine Arts Chamber.
ALEXANDROS BAKATSELOS - DEPUTY CHAIRMAN
Mr. Alexandros Bakatselos is a founding member and Deputy Chairman of Egnatia Bank S.A. Born in
Thessaloniki, he studied Economics at Brussels University and the University of Thessaloniki. He is a
self-made businessman, with a broad range of activities being: the main shareholder and Managing
Director of Pyramis S.A.; a member of the Board of Directors and owner of one third of the capital of D.
Bakatselos & Sons S.A.; Managing Director and owner of one third of the capital of Ekdotiki Voriou
Ellados S.A.; president and Managing Director of the family real estate company Delfini S.A.; and
president and Managing Director of the Shipping Company Delfini II S.A. Mr. Alexandros Bakatselos
has held positions in numerous associations including President of the “Northern Greece Industrial
Association”, Vice-President of Olympic Airways (1989-1993) and President of the Thessaloniki
International Fair - HELEXPO.
KONSTANTINOS VASILAKOPOULOS – MANAGING DIRECTOR
Mr. Konstantinos Vasilakopoulos was born in 1943 and studied at the Athens University of Economics
and Business (AUEB). He continued his studies in Business Management at the Education Institute. In
1970 he moved to the Financial Department of Emporiki Bank and in 1975 he became a member of the
team that incorporated Ergasias Bank, where he worked as Head of the Lending Department till 1990,
when he became General Manager of the Bank. From 1993 to 2000, he was a member in the Bank’s
Board of Directors. From 2001 to 2004 he was the Head of Small Medium Enterprises and Retailers in
Bank of Cyprus in Greece, as well as the Chairman of Cyprus Securities. On 1 January 2005 he was
appointed General Manager of the Bank of Cyprus group in Greece. In October 2007 he became Deputy
Chief Executive Officer of Marfin Egnatia Bank. At present he holds the position of Chief Executive
Officer of Marfin Egnatia Bank.
ANDREAS VGENOPOULOS – BOARD MEMBER
Mr. Vgenopoulos was born in 1953. He is a graduate of the Law School of Athens University. He served
as a Human Resources Manager for Thenamaris Shipping, and is an Attorney of Law and founder of the
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Law Firm Vgenopoulos & Partners. He is presently Chairman of the Board of Directors of Marfin Bank
S.A., and Vice Chairman of Marfin Financial Group Holdings S.A. Andreas Vgenopoulos speaks English
and French.
EFTHIMIOS BOULOUTAS – BOARD MEMBER
Mr. Efthimios Bouloutas was born in 1961. He holds a Civil Engineering Diploma from the National
Technical University of Athens, a MSc in Civil Engineering from Stanford University and a Ph.D degree
in Computational Fluid Mechanics from MIT. He has also conducted post doctorate studies at Princeton
University. He worked as consultant with Epsilon Ltd and Athens Tech Centre. He established Mutual
Funds where he worked for 8 years as Managing Director. He was also member of the Board at Ionian
Mutual Funds and at Alpha Mutual Funds. Since 2000 he worked at EFG Eurobank Ergasias holding
various positions, the latest being General Manager, member of the Executive Committee and Chief
Executive Officer of Eurobank Asset Management. He was also a member of the board at EFG Private
Bank Luxembourg. In 2006 he was appointed Chief Executive Officer of Marfin Bank and member of the
Board of Directors of Marfin Financial Group. In November 2006 he was appointed Managing Director
of Laiki Bank (Hellas) S.A. He is also the Chief Executive Officer of Marfin Popular Bank Public Co Ltd.
NIKI PLAKOMICHELAKI – BOARD MEMBER
Mrs. Niki Plakomichelaki is a member of the Board of Directors of Marfin Egnatia Bank. Mrs.
Plakomichelaki holds a degree in Economics and possesses a total of 33 years banking experience. She
has acquired various management positions in Citibank, Barclays, Chios Bank and Alpha Bank. In
December 2003 she joined the Marfin Group and has held ever since the position of Deputy Chairman of
the Board of Directors of both Marfin Bank and Investment Bank of Greece.
FOTIOS KARATZENIS – BOARD MEMBER
Dr. Fotios Karatzenis was born in 1964. He graduated from the Law School of the University of Athens
and received a Legum Magister (LL.M.) as well as a Doktor Juris (Dr. Jur.) from the University of
Freiburg i. Br. (F.R. Germany). He has been a Research Fellow in the University of Freiburg i. Br. And a
Deputy Managing Partner in a reputable Athens Law Firm. Today he is Legal Advisor – Head of the
Legal Department of Marfin Group. Dr Karatzenis has given seminars and made a series of publications
in the area of Capital Markets, damages, unfair contract terms and private international Law. Dr. Fotios
Karatzenis speaks English and German.
PANAGIOTIS THEOCHARAKIS - BOARD MEMBER
Mr Panagiotis Theocharakis was born in Athens in 1958. He holds a BSc in Mechanical Engineering from
the National Technical University of Athens and a BA in Business Administration from the Athens
University of Economics & Business. Mr Theocharakis was Assistant Managing Director of Teocar S.A.
from 1984 until 1995. Since 1984, he holds the position of Deputy Managing Director at Nik. I.
Theocharakis S.A. and he is a Member of the Board of Directors of Nik. I. Theocharakis S.A., Teocar
S.A. and Tecom S.A.
DESPOINA THEOCHARAKI - BOARD MEMBER
Mrs. Despoina Theocharaki was born in Athens, Greece. She is a graduate of the Department of
Economics at the University of Athens and she holds a Masters in Business Administration (major
finance) from the New York University. She worked part-time at Teo Shipping Corporation for two years.
She has been a Deputy Managing Director of Nik. I. Theocharakis S.A. and Theocharakis S.A. since
1989.
PANAGIOTIS THROUVALAS - BOARD MEMBER
Mr. Panagiotis Throuvalas was born in Athens in 1956. He studied Economics at the University of Athens
on a scholarship and he continued his studies at the University of Manitoba (MA in Economics). He is
currently the Financial Director of the Theocharakis Group.
MARKOS FOROS - BOARD MEMBER
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Mr Markos Foros was born in Chios and moved to Athens in 1960. He studied at the London School of
Economics and received a Masters in Business Administration from Harvard Graduate School of
Business Administration in 1974. From 1974 to 1976 he worked in the International Credit Division of
the First National Bank of Chicago. From 1976 to 1997 he held various managerial positions in the
Chandris Group of Companies. From 1987 to 1998 he was the Managing Director of Celebrity Cruises
Inc. Mr Foros is currently the Managing Director of Chandris (Hellas) Inc, and is actively involved in the
International Shipping Finance and Managing of Real Estate Portfolios, Insurance Subsidiaries, Fund
Management and venture capital activities of the Group in Greece.
There are no potential conflicts of interest between the duties to the Issuer of each of the members of the
Board of Directors and their private interests or other duties. The business address of the Board of
Directors is the same as the corporate registered office of the Bank, being 4, Danaidon Street, 546 26
Thessaloniki Greece.
6. Activities of Marfin Egnatia Bank S.A.
6.1 Geographical Sectors
As of 30 June 2008, the Group operates mainly in Greece. Its network of banks consists of 184
branches, of which 162 operate in Greece and 22 operate in Romania. Greek assets comprise 96
per cent. of the Group's total assets.
6.2 Business Sectors
The Bank provides a wide range of banking products and services to its retail and corporate
customers. The Bank is active in retail banking, corporate banking, shipping, investment
banking, financing of small and medium size enterprises, leasing and factoring and forfeiting.
Further to the above banking services, the Group provides services in equity brokerage, asset
management and bancassurance.
The Group is organized into the following business sectors:
• Retail Banking
• Investment and Corporate Banking
• Treasury
• Asset Management
• Investments and Participations
6.2.1 Customer Deposits
The Bank offers a wide range of depositary and investment products suited for
individual clients as well as for corporate clients in all major foreign currencies. Total
deposits have been increasing supported by the merger related publicity and expanding
branch network.
In the first 6 months of 2008, the deposit market share of the Bank has increased to
approximately 4.9 per cent from 4.0 per cent at the beginning of 2007. Of which the
Bank currently holds an estimated 7.4 per cent market share in term deposits and 2.5 per
cent. market share in current deposits (source: the Bank's own data and market statistics
published by the Bank of Greece).
Deposits of the Group on a consolidated basis as of 31 December 2007 excluding the
Romanian Operations:
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(December 31,
EUR M)
2005 % 2006 % 2007 %
By depositor
Customers, thereof
Short-term (< 12
months)
Long-term (>
12 months)
6,011,657 94.77% 6,837,826 90.04% 8,550,505 81.86%
20,922 0.33% 16,965 0.22% 150,431 1.44%
Banks, thereof 310,800 4.90% 739,300 9.74% 1,744,320 16.70%
Total deposits 6,343,379 7,594,091 10,445,256
By maturity (Total Liabilities)
Short-term (< 12
months)
Long-term (>
12 months)
4,858,443 68.71% 7,343,617 80.03% 10,743,245 84.82%
2,212,475 31.29% 1,832,688 19.97% 1,922,274 15.18%
Total liabilities 7,070,918 9,176,305 12,665,519
By interest rate (Customer deposits)
Fixed 1,219,871 14.02%
Variable 7,481,065 85.98%
By currency (Customer deposits)
EUR 6,918,418 79.51%
FX 1,782,518 20.49%
Source: Internal Bank data.
6.2.2 Loans and Advances to Customers
Net loans comprised 70 per cent of the total assets in the first half of 2008 compared to
69 per cent in 2007 and 67 per cent in 2006, with similar proportions at Group level. The
loan portfolio of the Group is highly diversified across various business sectors with the
Corporate and Shipping loan portfolio comprising 66 per cent of the total loan portfolio,
loans to consumers comprising 34 per cent of the portfolio.
In the first 6 months of 2008, the Bank’s market share in customer loans has increased to
4.9 per cent from 4.0 per cent at the beginning of 2007 mainly through the continuing
expansion of the branch network and gradual maturing of the existent branches, as well
as the marketing campaign associated with the merger. Moreover, the market share in
business loans has grown significantly during the post-merger period, increasing from
5.0 per cent at the beginning of 2007 to 6.2 per cent in June 2008. The market share in
consumer loans has increased to 4.9 per cent in June 2008 from 4.2 per cent at the
beginning of 2007 (source: the Bank's own data and market statistics published by the
Bank of Greece).
The Bank’s lending portfolio is split into retail, commercial and corporate divisions. The
retail division comprises private individuals and very small businesses. The commercial
division comprises small and medium sized enterprises and the corporate division
comprises large private enterprises and listed companies.
The Bank's primary lending criterion is the borrower's ability to repay. Additionally,
emphasis is placed on the provision of security, either in the form of tangible collateral
or personal and corporate guarantees.
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The greatest fraction of loans was granted on a floating rate basis, namely 90 per cent of
the portfolio, thereby limiting the Group’s exposure to interest rate risks.
Furthermore, the Group policy is to avoid foreign exchange risk on its own behalf and on
the behalf of its clients. The policy is reflected by the currency breakdown of the
portfolio where 88 per cent of loans are granted in the domestic currency.
(a)
Retail Lending
The Bank offers a wide range of retail credit products to its customers. The products are
offered to both Greeks and Foreign nationals subject to a complete set of credit analysis.
The Bank offers personal loans, home loans, credit cards, auto loans and bancassurance.
(b)
Commercial Lending
In Greece, enterprises employing 50 persons or less form over 95% of the total number
of enterprises and employ over 70% of the work force in the private sector.
The Bank’s Commercial Lending Division aims at creating a healthy and diversified
portfolio by providing loans to small and medium-sized companies According to the
Bank’s credit policy, all financially healthy businesses can be evaluated as potential
Bank customers. The Bank’s Credit Rating System examines both qualitative and
quantitative information whereby each potential customer receives a Credit Grade on the
scale of 1 to 10 with 1 being excellent. If the potential customer receives a score of 6 or
below, the Bank automatically rejects the application. The most important lending
criterion for the Division is the purpose of the loan, on which depends the future
repayment of the loan. Furthermore, the type of collateral provided affects the pricing of
the loan.
(c)
Corporate Lending
The corporate banking division provides a wide range of banking services to large
organisations, including loans, overdrafts and trade finance facilities, letters of guarantee
and factoring and forfeiting services, with the facility mix geared to the particular
financing needs of each corporate customer.
(d)
Shipping Finance
The synergies of the triple merger created one of the ten largest Shipping Finance
Portfolios in the market. Moreover, the Bank became the pioneer among the local banks
in accessing the international shipping market.
The Shipping Division of the Bank offers a wide range of products tailored to customers’
needs including short and long term financing, overdrafts, bridge financing and letters of
guarantee, as well as investment banking services and equity participation capabilities.
In 2007, the Bank's shipping portfolio grew by over 200 per cent to USD 2,250 million
constituting a 3.36 per cent market share of the total Greek shipping finance market. As
at 31 December 2007, Marfin Egnatia Bank held the fourth position among Greek banks
and ninth position among all banks present in the market in terms of total portfolio size
(source: Petrofin research).
The Bank has a stated goal of maintaining a competitive advantage in the shipping
finance market through a strategy of differentiation where it aims to focus on its core
strengths of product tailoring and large underwriting capacity based on the Bank’s strong
capital base.
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6.2.3 Investment Bank of Greece S.A.
The Bank offers a wide range of investment banking, financing, and brokerage services
through its main Greek subsidiary, Investment Bank of Greece ("IBG"), in which the
Bank currently holds a 92 per cent stake.
IBG offers a variety of products and services including equity sales and trading,
company and sector research, market and equity strategy reports for the domestic and
major international capital markets, custodian and clearing services, investment banking
and corporate finance advisory services, as well as asset management.
(a)
Stock Exchange Operations
IBG is a leading brokerage house in the region with current market share on the Athens
Stock Exchange exceeding 22 per cent. Following the three-way merger, the market
share of the Company on ATHEX has increased from 12 per cent at the end of 2006 to
18 per cent on 31 December 2007. It trades and intermediates in both Greek and foreign
equities, debt and derivatives and offers a wide range of investment services to its
customers.
The company’s network includes its own headquarters as well as the entire network of
branches of the Bank and its subsidiaries through which it services a wide range of
customers including international and Greek investment funds, international investment
houses, corporate clients and high net worth individuals.
IBG has a dedicated team of analysts covering the majority of the listed Greek and
Cypriot companies, as well as a number of major Romanian, Turkish and Bulgarian
companies . The research department is consistently rated within the top rankings in both
the ATHEX and EXTEL surveys, while a number of its analysts are ranked in top
positions in other domestic and international surveys. In 2007, IBG was voted number 1
Industry Top Picker in Developing Europe Bank carried out by Starmine.
IBG currently holds the number one position in both the Greek and Cypriot equity
markets, in terms of volumes transacted.
(b)
Investment Banking and Capital Markets
Financial and Capital Markets advisory services are offered by IBG’s Investment
Banking team, which possesses significant regional and transactional expertise, mostly
gained in top tier international and local investment banks.
The Financial Advisory desk provides an integrated range of services including advising
on M&A, capital restructuring, and buyouts, preparations of business plans, valuation
reports and fairness opinions. In addition, it also assists companies looking to access
capital from strategic and financial investors. Its strong M&A advisory track record in
Greece and the wider SE European region is demonstrated through the large number and
nature of deals it has recently executed.
In terms of Capital Markets advisory work, IBG offers a complete and integrated range
of value added and specialised services such as advising with regards to Initial and
Secondary Public Offerings, share capital increases, private placements, as well as
supporting listed companies with relevant regulatory and corporate governance
requirements. It also offers relevant investor relations services and support. Over the last
year IBG has advised on equity capital raisings worth in excess of € 5.5bn
In cooperation with other units of the Bank, customised structured financing tools are
also offered, including bonds, loan syndication, convertibles, hybrid and quasi equity
financing.
IBG is a member of European Securities Network (ESN). ESN is a top ranked pan
European partnership of investment banks and securities firms with a unique identity and
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independent status. Besides benefitting from strong research and placement capabilities,
ESN members actively cooperate in Equity Capital Markets and M&A advisory projects.
6.2.4 Private Banking and Mutual Funds
Following the triple merger, the Bank has emerged as one of the leaders in wealth
management in the local Greek market where it currently holds the third largest portfolio
of onshore assets under management among the domestic banks (Source: Marfin Egnatia
Bank estimate as per the banks’ published data)
The Private Banking Division of the Bank expanded significantly in 2007, with total
assets under management increasing to EUR 3,400 million from EUR 1,000 million in
2006. The Division has over two and a half thousand client families in Greece whose
savings, investment and credit needs are catered for through five Private Banking
business centres.
The key strategy of the Bank is to ensure that each client is provided with a
comprehensive choice of product solutions tailored to the clients' needs and risk appetite.
The Private Banking Division is supported by the Investment Strategy Unit that
communicates a consolidated image of the Bank through regular publications.
Principal Private Banking services include tailored commercial banking services and
investment solutions, structured products, alternative investments, discretionary asset
management, advisory and investment management services with an extensive selection
of third party Mutual Funds. The open architecture strategy of the Division offers an
opportunity for clients to invest in Franklin Templeton Investments, JPMorgan,
BlackRock, Invesco and Schroders products and mutual funds. Discretionary asset
management is offered by the Bank through Marfin Global Asset Management & Mutual
Funds Management. On the local mutual funds market, the Bank is represented by
Marfin AEDAK (a subsidiary of Marfin Global Asset Management & Mutual Funds
Management) with EUR 228 million assets under management as of 31 December 2007.
6.2.5 Insurance
The Bank offers life insurance products through its Marfin Life S.A. subsidiary. In a
year it has captured 0.5 per cent of the local market share by selling bancassurance
products through its expanding branch network. The Bank offers integrated insurance
solutions tailored to its corporate and private clients' needs through Marfin Insurance
Brokers S.A.
6.2.6 Treasury and Capital Markets
The Treasury and Capital Markets division is entrusted with the asset and liability
management of the Bank, as well as development and distribution of investment and risk
management products among its institutional clients. The division serves as an access
point for the Bank to the global financial market through its interbank activities.
Within the provided risk exposure guidelines, the division contributes to the Bank’s
investments, liquidity and capital management planning and client servicing through its
dedicated sales force and product engineering desk.
Following the triple merger, Treasury has established a desk which concentrates solely
on expanding the funding capacity of the Bank. By the end of 2008, the Bank, as a newly
created entity, plans to establish its first EMTN programme.
6.2.7 International Operations - Romania
In December 2000, Egnatia Bank acquired BNP-Dresdner Bank (Romania) S.A., a
commercial bank which was established on 17 July 1998. Following the acquisition, one
of the main priorities of Egnatia Bank (Romania) S.A.'s management was to expand the
customer base in both corporate and retail banking. In 2001, Egnatia Bank S.A.'s
Romanian operations consisted of only one branch. It currently has 22 branches (in
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Bucharest Timisoara, Ploiesti, Costanta, Brasov, Iasi, and other major Romanian cities).
Egnatia Bank (Romania) S.A. focuses on medium and large size corporate customers
and average to high net worth individuals, offering them commercial banking and retail
banking products. Its corporate customers include Greek and Romanian companies as
well as subsidiaries of foreign companies. As at 30 June 2008, the Bank directly owns
99% of Egnatia Bank Romania S.A. and an equivalent share in Egnatia Bank (Romania)
S.A.'s subsidiaries.
Egnatia Bank (Romania) S.A. has a subsidiary, Egnatia Leasing IFN (Romania) S.A.
(“Egnatia Leasing”), which was established in 2003. Egnatia Leasing provides leasing
services to corporate clients as well as to individuals. Egnatia Bank (Romania) S.A. and
its subsidiary ended the first six months of 2008 with € 4.6 million net profit compared
with €4.6 million for the full year of 2007.
Deposits and advances of Egnatia Bank (Romania) S.A as at 30 June 2008 stood at €183
million (FY2007: €123 million) and €410 million (FY2007: €305 million) respectively.
(Source: Internal Bank data).
6.2.8 Hedge Fund Management – MFG Capital Partners Ltd.
7. Risk Management
MFG Capital Partners, based in the UK, provides Investment Management services for
institutional investors and high net worth individuals, specializing in the management of
Fund of Funds products and the systematic trading of G10 liquid debt instruments.
The Risk Management Division of the Bank consists of the following units: Credit Risk Management
Unit, Retail Credit Risk Management Unit, Market Risk Management Unit and Operational Risk and
Basel II Unit.
In particular, the Risk Management Division:
• Develops and implements the necessary methods/models for identifying, measuring, evaluating
and monitoring all risks arising from the Bank’s activities in Greece and Romania on an
individual and consolidated basis.
• Develops methodologies for assessing appropriate capital requirements against all risks and
ensures compliance with Basel II and the relevant regulatory framework.
• Evaluates all risks inherent in current and proposed new business activities, makes
recommendations for the allocation of limits and monitors limit compliance.
• Maintains a working relationship with the regulators in Greece and ensures efficient and timely
risk management reporting.
• Cooperates with the Risk Management Division of Marfin Popular Bank in developing Group
Risk Management Policies.
• Regularly reports to Senior Management and the Board of Directors through the Risk
Management Committee in respect of risk management issues.
• Periodically assesses the methods and systems that are in place and makes suggestions for
corrective actions if necessary.
• Establishes a framework for early detection of risks (early warning system).
7.1 Market Risk
The Risk Management Division identifies all market, issuer and counterparty risks that are
inherent in the Bank’s activities and ensures that exposures are adequately captured in the risk
measurement and reporting systems. It also assesses market risk in new businesses and products
and in structured transactions.
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In order to quantify risk, the Risk Management Division:
• Utilises a uniform methodology with Marfin Popular Bank to measure counterparty risk
exposures, based on current and potential future exposure.
• Estimates Value at Risk on a daily basis for the Bank and its subsidiaries in Greece and
in Romania. Value at Risk is based on the variance-covariance methodology with 99%
confidence level and a one-day holding period.
• Complements Value at Risk calculations with stress testing, based on a uniform set of
assumptions for extreme movements, which apply for Marfin Popular Group and which
have been approved by the Risk Management Committee.
• Measures liquidity ratios on a daily basis, observing the requirements of the Bank of
Greece.
• Evaluates interest rate risk in the banking book using the Static Repricing Gap
methodology and performs net interest income and market value of equity simulations
under different interest rate scenarios.
In order to control market risk, a limit framework has been established for market, counterparty,
issuer and liquidity risk. Exposures are compared against the respective limits on a daily basis. In
particular:
• The allocation of counterparty limits for banks is based on a scoring model for financial
institutions, which uses a set of quantitative and qualitative criteria. Quantitative criteria
include financial ratios extracted from accounting statements. Qualitative criteria are
based on opinions of rating agencies, the risk officer’s own experience and other
information provided from the press.
• The allocation of country limits is based on the country’s rating assigned by a recognized
External Credit Assessment Institution, as well as the country’s economy, capital
markets, political stability, financial liberation and level of integration.
• The allocation of issuer limits takes into account the issuer type, country, sector and
credit rating. Issuer limits on specific geographic regions, sectors and product types have
also been established in order to limit concentration risk in the fixed income portfolio.
• VaR limits are allocated to Marfin Egnatia Bank and its subsidiaries, per risk type and
product type. Limits are set taking into consideration the volume of operations, the
strategic business plan, risk appetite, general economic and market conditions and the
Bank’s experience of the specific type of risk.
The Risk Management Division has a local risk management policy in place which has been
approved by the Risk Management Committee. The policy covers authorities and responsibilities
of the market risk management function and the governing committees, limit setting and limit
monitoring of all risks, trading book policy, banking book interest rate risk measurement, stress
testing, funding liquidity contingency plan and new product certification.
7.2 Operational Risk
The Risk Management Division has adopted the Group’s Operational Risk Framework
Management approved by the Risk Management Committee. It covers all aspects of the
established risks and presents thorough methods and policies to effectively manage them, in
compliance with local regulatory requirements. Such aspects comprise the Loss Database, Risk
Control Self Assessment, outsourcing practices and controls, and checks for new products and
procedures.
The Risk Management Division has appointed an independent Information Risk Security Officer,
who deals specifically with the information aspects of operational risk. Its work is determined by
the Group Information Security Management Plan. All major related activities have been
outsourced to a third party consultant of adequate international experience. They are divided into
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two main categories, the periodic Penetration Test arrangements and the ISMS (Information
Security Management System), a thorough managerial framework for the application of
information security activity.
7.3 Credit Risk
Credit risk is the risk of loss due to a borrower or counterparty default from actual, contingent or
potential claims. The goal of Credit Risk Management is to help maximise the risk adjusted
returns by managing the credit exposure. Credit Risk Management focuses on ensuring a
disciplined risk culture, risk transparency and intelligent risk-taking within the framework of the
general strategic objectives.
The primary function of Credit Risk Management is to assist in the development of the credit
policy, the credit approval authority limits, the credit assessment, the pricing, the management of
credit exposures, as well as the credit quality management.
7.3.1 Credit Policy
The Bank has created a detailed framework for the underlying credit risk policy. In order
to be effective, credit policy is communicated throughout the Bank's operations,
implemented through appropriate processes, monitored and revised periodically. It takes
into account changing internal and external environments in order to evaluate and
control the inherent credit risk in new or existing lending.
The policy regarding collections and the treatment of exposures in arrears, as well as the
non-performing loans and provisioning policy, are clearly defined in the document.
Αs far as Business portfolios are concerned, the credit policy framework provides clear
guidelines concerning the credit approval limits, the type of collateral and the level of
accepted coverage by type of product and lending portfolio. Credit Assessment is well
documented at both client and portfolio level.
Credit Risk Management ensures the appropriate diversification at portfolio level in
order to avoid over concentration in a small number of sectors, related sectors or
customer groups. As far as the Retail portfolios are concerned, the risk profile of the
customer is assessed in all phases of the credit cycle. Origination policy rules are
parameterised and automated in the application system in order to avoid deviations from
the credit policy and to allow for the monitoring of their implementation by the credit
officers. Furthermore, account maintenance policy criteria are clearly stated for all areas
including credit line increases for credit cards, cross selling, collection strategies,
authorizations etc.
The Risk Management Division, in collaboration with the Credit Appraisal Division,
actively participates in updating the credit policy and submits such updates to the Risk
Management Committee for approval. It reviews the credit policy and identifies gaps in
its implementation. Credit policy implementation monitoring, along with extensive
analysis of the portfolios' performance, constitutes valuable information for policy
improvement and optimisation.
7.3.2 Credit Approval Authorities and Limits
The Risk Committee is responsible for authorizing the credit approval limits. The limits
and the accompanying guidelines and instructions are regularly reviewed to
accommodate any changes in banking operations.
The credit approval limits granted to the various sanctioning authorities are based on the
type of business, the number and expertise of credit officers and the seniority of the
manager. For business lending, the credit limits are allocated based on the type of credit
and the borrower’s credit grade. They are further divided into limits for the total loan
amount and limits for the unsecured amount. Credit limits are approved within delegated
approval authority levels, according to the size of the loan.
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The delegated approval authority levels ranked from lowest to highest are:
• Joint approval from the appropriate level within the Business Unit and the
Credit Appraisal Division.
• Credit Committee I.
• Credit Committee II.
The Credit Committee II has the ultimate authority for limit approval and extension of
credit. For retail lending, limits are allocated based on the type of credit, type and size of
collateral and approved within delegated approval authority levels, with the ultimate
authority for limit approval granted to the Retail Banking Credit Committee.
Finally, loans in arrears and non-performing loans are subject to a separate limit
approval process.
7.3.4 Credit Assessment - Rating Models
7.4 Liquidity Risk
Credit Risk monitoring for business lending (commercial and corporate clients) is
performed as follows:
At the client level: The Borrower’s Rating System, developed internally, is twodimensional,
involving a Credit Grade and a Risk Grade for each corporate borrower.
The Credit Grade is based on quantitative and qualitative criteria regarding the
borrower’s strength. The Risk Grade evaluates the quality of the collateral.
At the portfolio level: Credit portfolios are monitored and re-classified on a monthly
basis. The loans are also classified per business unit and credit grade and an associated
probability of default is calculated based on historical data.
In addition, the external rating model Moody’s Risk Advisor (MRA) is currently in use
for corporate and large commercial entities and assists loan decision-making,
complementing the internal rating system. Moody's Risk Advisor assesses the financial
strength of the customer based on his financial and qualitative data, as well as the sector
in which he operates.
Credit Risk Management reviews customer grades on a regular basis, ensuring that the
grading system is accurate, objective and reliable. Changes in customer grades are
monitored to develop timely and appropriate strategies to avoid increases in the risk
undertaken.
Quality indicators (non-performing loans, arrears, excesses, average grade) are closely
monitored and summarised in divisional reports, which form the basis of customerspecific
target setting, are produced on a regular basis.
For the evaluation of retail customers, application and behavioural scorecards are used in
the origination and the account maintenance phases respectively. In particular, the
existing scorecards consist of four application models (Consumer Loans, Auto Loans,
Credit Cards and Small Business Loans) and one behavioural model at a customer level
which summarises the customer’s behaviour in all retail products.
New application scorecards for the mortgage portfolio and a full scorecard monitoring
system for model validation are planned to be completed at the end of 2008.
The Bank performs a series of measurements to estimate liquidity risk:
• A “Deposit/Loan Index” indicates the percentage of loans funded by the Bank’s
deposits.
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• A static analysis of the liquidity gap distribution from current assets and liabilities. The
gap is calculated for different maturity buckets and cash flow differentials are calculated
for each period and cumulatively. This analysis shows a snapshot of the Bank’s liquidity
on any given period based on its activities up to that period.
• A dymanic analysis of the liquidity gap distribution from current assets and liabilities.
This is similar to the static analysis, except that it takes into account possible changes in
the Bank’s internal and external environment.
• A “Maturity Mismatch Index” is the ratio of (a) the difference between assets and
liabilities, to (b) the Bank’s loan assets.
• A “Liquid Asset Index” is the ratio of (a) liquid assets with a maturity of up to 30 days,
to (b) the Bank’s loan assets.
For the above measurements, the Bank has established limits that are followed on a continuous
basis. In addition to the above, the Bank also performs liquidity stress test simulations at least on
a quarterly basis. The results are communicated to Management and the supervisory authorities
as required. The liquidity limits are determined by taking into account the Bank’s economic
condition, turnover, market conditions, access to capital resources, types of activities that require
funding, size of loans etc.
The Bank has developed plans for detecting warning signs of possible liquidity issues (such as
non renewal of funding facilities or large withdrawals) and mechanisms to address mild liquidity
needs (e.g. increase in deposit rates) and high liquidity needs (e.g. selling current liquid assets).
In addition, the Bank has signed an agreement with its parent company, Marfin Popular Bank, for
a credit line of up to $668 million for a period of 12 months.
7.5 Interest Rate Risk
The Bank has developed an interest rate risk policy for the Bank’s portfolio, which consists of
securities that are held to maturity (HTM) or available for sale (AFS). The Bank uses the static
repricing gap method to estimate portfolio risk. This method distributes the interest rate sensitive
securities in different maturity or repricing buckets and computes the interest rate gap and the
difference between assets and liabilities for each period.
Moreover, at least on a quarterly basis, the Bank applies stress tests by simulating the effect of
different term structure scenarios on the valuation of the Bank’s portfolio.
7.6 Reputational Risk
The communication policy for crisis management and the protection of the bank’s reputation is
the responsibility of the Crisis Management Committee (CMC). The CMC will become
operational in the 4th quarter of 2008. In the meantime, crisis management is the responsibility
of the Press and Communication Division, which, in cooperation with the Divisions of Risk
Management, Internal Control, Compliance, Legal and Human Resources consults the Chief
Executive Officer.
At a preventive level, the CMC collects information from the Bank’s employees about potential
future crises, classifies this information and determines the response strategy, in cooperation with
the appropriate Divisions. Moreover, through the registration system of media references to the
Bank and the banking sector in general, the CMC informs itself of the mass media position in
respect of the Bank and acts accordingly.
Furthermore, the CMC is responsible for communicating the response to events that threaten the
bank’s reputation and for ensuring a uniform and consistent image of the Bank towards the
public and society overall.
The Bank’s Crisis Management Handbook includes a description of the following items:
• Potential crises with a communicational impact.
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• Prevention and response procedures.
• Responsibilities of the CMC and its members.
• Response framework about specific crisis categories.
• Technical support required.
• Detailed rules of interaction with members of the media.
The Handbook’s appendix states in detail the contact information for all parties that might be
involved in potential crises, including members of the media in Athens and other areas. The
Handbook is updated regularly by the CMC.
The CMC, in cooperation with the Division of Human Resources, informs the Bank’s managers
of the procedures and rules of reputational crisis management, communicating the need for
immediate notification in case of possible risks. The training is conducted in the form of
seminars and simulation exercises.
7.7 Compliance Risk
The Bank intends to use the Internal Evaluation (RCSA) method in order to track and rank
compliance risks. This method is based on specific ranking criteria, such as the degree of impact,
the probability of occurrence and the degree of exposure to the risk.
For the tracking, management and response to incidents of money laundering, the Bank uses a
system called ERASE. The system is currently being piloted across the Bank's operations where
the Investment Bank of Greece has installed the system, activated the appropriate alerts and is
expected to fully implement it by the end of 2008.
The Bank intends to use the Internal Evaluation (RCSA) method in order to track and rank
compliance risks. This method is based on specific ranking criteria, such as the degree of impact,
the probability of occurrence and the degree of exposure to the risk.
7.8 Legal Risk
The Bank has developed procedures regarding the management of legal risk. These procedures
include:
• Sending legal documents to the Legal department.
• Sending questions to the Legal department and following up.
• Registration of logos or legal names.
• Management of lawsuits against the Bank.
The Bank intends to use the Internal Evaluation (RCSA) method in order to track and rank legal
risks.
7.9 Information Systems Risk
This risk applies to the following systems:
• Software and hardware.
• Databases.
• Computer networks.
• Physical locations where the above are installed.
• Human errors.
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• Outsourcing operations.
The Bank intends to use the Internal Evaluation (RCSA) method in order to track and rank
information systems risks.
7.10 Basel II
The implementation of the Basel II principles is headed by the Basel II special unit.
Pillar I minimum capital requirements were dealt with, in common with the parent Marfin
Popular Bank, by establishing a Cyprus based calculation engine, managed by a joint Steering
Committee. The capital requirements for credit and market risk are calculated based on the
Standardised Approach methodology and for operational risk based on the Basic Indicator
Approach. The Internal Ratings Based Approach (IRB) is to be adopted in the near future.
Policies in relation to Pillars II and III are currently being progressed and are equally dealt with
in a group context.
8. Analysis of Wholesale Funding Portfolio
As at 30 June 2008, the Group had €580.22 million of debt outstanding, which consisted of Eurobonds,
loan capital securities and bank loans. The financial information shown below has been extracted without
material adjustment from the audited consolidated financial statements of the Bank prepared in
accordance with IFRS:
Funding Portfolio Base Rate € million
Senior Bond maturity 2008 3M EURIBOR 199.9
Convertible bond maturity 2013 0.2
Bond Loan maturity 2010 1M EURIBOR 50.0
Bond Loan maturity 2011 6M EURIBOR 50.0
Subordinated bond maturity 2015 3M EURIBOR 80.0
Subordinated bond maturity 2017 3M EURIBOR 200.0
Total 580.22
The convertible bond issued on 21 January 2003 has a maturity of 10 years with the right of early
redemption after the end of the fifth year. It has an interest rate of 3-month Euribor plus 1.75% up to the
early redemption date and then plus 3.25% until the scheduled maturity. Interest accrues every 3 months,
starting on 21 January 2003.
Convertible subordinated debt holders have the right to exchange ten bonds for ten shares. As at 31
March 2008 there were 72,330 convertible bonds whose holders have the right to exchange them with the
respective number of ordinary shares. The par value of each debt security is Euro 3.20.
The subordinated debt with maturity of 2015 was issued on 4 May 2005 and has a 10 year term with the
right to early redemption after the end of the fifth year. It has a 3-month Euribor interest rate plus 1.10 per
cent up to the early redemption date and then plus 2.40 per cent up to the scheduled maturity. It accrues
interest on a quarterly basis starting from 4 August 2005.
The subordinated debt with maturity of 2017 was issued on 31 December 2007 has a 10 year term with
the right to early redemption after the end of the fifth year. It has an interest rate of Euribor three months
plus 0.95 per cent up to the early redemption date and then plus 1.95 per cent up to the scheduled
maturity. It accrues interest quarterly starting from 31 March 2008. The issuance of the bond loan was
decided following the approval of the Ordinary General Assembly of the shareholders of the Bank on 22
June 2006 and was guaranteed in total by its parent Marfin Popular Bank Public Co Ltd.
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The subordinated debt is used as secondary capital (Tier II capital) for capital adequacy purposes. The
bond loan (Schuldschein) with maturity of 2010 was issued on 8 December 2007 and has a 3 year term. It
has an interest rate of Euribor 1, 3 or 6 months plus 0.25 per cent up to maturity. It accrues interest in 1, 3
or 6 months starting from 28 January 2008.
The two bond loans (Schuldschein) maturing in 2010 and in 2011 respectively were issued in December
2007 and March 2008 respectively with a 3-year term and interest rate of Euribor 1 or 6 months plus 0.25
per cent. up to maturity.
Latest Developments
During the third quarter 2008, the Bank redeemed EUR 200 million senior notes maturing in August 2008
and signed a third bond loan of EUR 250 million.
8.1 Main funding sources
Marfin Egnatia Bank has had low dependency on the wholesale markets in the past several years.
Currently, the main sources of funding for the Bank are customer deposits and interbank loans.
As of 30 June 2008
Main Funding Instruments
% of liability
Interbank 13
Repos 12
Deposits 71
Private Placement and senior debt 3
Lower Tier II 1
Source: Internal bank data.
The Bank has a well diversified portfolio of customer deposits with over 150,000 deposit
accounts of average size EUR 70,000 where the loan to deposit ratio has remained at one of the
lowest levels among the Greek peers.
9. Analysis of Loan Portfolio
The following is the breakdown of the Group's loan portfolio as at 31 December 2007 excluding the
Romanian Operations:
ANALYSIS OF LOAN
PORTFOLIO
AMOUNTS IN MILLION EUR
By Economic Sector
2005 % 2006 % 2007 %
Total Portfolio 5,067 100.00% 5,935 100.00% 9,036 100.00%
A. ENTERPRISES 3,493 68.94% 3,878 65.34% 5,534 61.24%
Agriculture 28 0.55% 19 0.32% 33 0.37%
Manufacture - Mines 546 10.78% 502 8.46% 505 5.59%
Electricity - Gas - water supply 5 0.10% 3 0.05% 3 0.03%
Construction 331 6.53% 399 6.72% 522 5.78%
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Trade 1,260 24.87% 1,474 24.84% 1,003 11.10%
Tourism 163 3.22% 211 3.56% 135 1.49%
Transportation, Communication 12 0.24% 13 0.22% 28 0.31%
Shipping 646 12.75% 585 9.86% 1,258 13.92%
Remaining categories of loans 502 9.91% 672 11.32% 2,047 22.65%
B. HOUSEHOLDS 1,574 31.06% 2,027 34.15% 3,297 36.49%
Private - Consumer Loans 881 17.39% 1,015 17.10% 1,493 16.52%
Housing Loans 654 12.91% 1,008 16.98% 1,782 19.72%
Remaining Loans 39 0.77% 4 0.07% 22 0.24%
C. GOVERNMENT 0 0.00% 30 0.51% 205 2.27%
Organisations of local Government 0 0.00% 30 0.51% 205 2.27%
BY MATURITY 5,067 100.00% 5,935 100.00% 9,036 100.00%
Short-Term (< 12 months) 2,666 52.61% 2,841 47.87% 3,477 38.48%
-Less than 3 months 1,390 27.43% 1,601 26.98% 1,759 19.47%
-3 months - 1 year 1,276 25.18% 1,240 20.89% 1,718 19.01%
Long-term (> 12 months) 2,401 47.39% 3,094 52.13% 5,559 61.52%
BY INTEREST RATE 0.00% 0.00% 9,036 100.00%
Fixed 821 9.09%
Variable 8,215 90.91%
BY CURRENCY 5,067 100.00% 5,935 100.00% 9,036 100.00%
EUR 4,363 86.11% 5,330 89.81% 7,979 88.30%
FX 704 13.89% 605 10.19% 1,057 11.70%
Source: Internal bank data.
The following table shows the breakdown of the Group's loans and advances to customers and provisions
for bad and doubtful debts as at the dates indicated. The financial information shown below has been
extracted without material adjustment from the audited consolidated financial statements of the Group
prepared in accordance with IFRS:
(December 31, EUR M) 2006 % 2007 %
Gross principal outstanding 5,850,898.00 9,045,672.00
Principal
Performing 5,595,368.00 95.63% 8,662,281.00 95.87%
Special watch 59,981.00 1.03% 221,890.00 2.46%
Non performing 195,549.00 3.34% 161,501.00 1.79%
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Specific provisions 50,154.00 91,168.00
Total provisions/principal 2.33% 2.01%
9.1 Management of Problematic Loans
Management of problematic loans is administered centrally by the Debt Collections Unit.
The Debt Collections Unit, (DCU), is responsible for the administration of loans in arrears and
foreclosure. Under the DCUs supervision are the following divisions:
The Watch List Division, responsible for the administration of business loans which, according
to the Bank’s Credit Policy, are graded as 7, 8 and 9, (on the 1-10 scale system). The Past Due
Loans Division, responsible for the administration of loans in foreclosure, i.e., credit grade 10.
The Consumer Collections Division, responsible for the administration of loans in arrears and
foreclosure to individuals and small businesses (retail – SBL loans).
The credit procedure, as well as the approval and administrative confines of each level are
defined within the Bank’s credit policy manual.
9.1.1 Watch List Division (WLD)
The WLD administers all loans with CG 7, 8, or 9. When it receives the Credit Risk
Note, the case is assigned to an authorised account officer who studies the file in depth
and the WLD decides the next best steps that the BC should follow in order either to
recover the full amount of the loan or to upgrade the loan and continue the funding. The
WLD sets out these steps in a note and forwards it to the BC. The note has a timetable
(Action Plan) during which all steps should be completed. At the end of this period, the
BC will report back to the WLD on the outcome. This procedure is followed until the
loan is recovered or is upgraded or is considered to be in default and legal action is
needed against the debtor. In the latter situation, WLD prepares a note including the full
history of the loan from the day it was given out by the bank until the day when the
WLD decided to take legal action against the debtor and to rescind the loan agreements.
Following the approval of this History Note by the relevant committee, it is forwarded to
the Past Due Loans Division.
9.1.2 Past Due Loans Division (PDL)
The Past Due Loans Division handles business loans and current accounts already fallen
due, (CG 10), transferred from:
• The Bank’s branches
• The Corporate Banking Division
• The Shipping Division
The PDL Division employs a total of 18 people, from which 13 officers are concerned
with the realisation of loans and 4 with administrational, support and reporting duties.
The PDL Division is supported by the Bank’s Legal Department, as well as by
freelancers such as lawyers and bailiffs, through which various judiciary actions are
processed.
9.1.3 Consumer Collections Division
The Consumer Collections (CC) Division is responsible for the administration of loans
in arrears and in foreclosure from personal, consumer, housing and credit cards, as well
as small business loans, (retail, SBL loans) and consists of the following sub-divisions:
• Collection of Default Claims
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• Collection of Claims in arrears
• MIS & Support
• SBB Accounts Administration
The CC Division is also supported by the Early Collections Account Administration,
collection companies during the pre-legal period and by cooperating lawyers during the
foreclosure procedure.
9.1.4 Write off policy and timing
10. Alternative Channels
If recovery of a loan is not successful, despite all the appropriate legal procedures having
been taken, or if any further actions are outweighed by their costs, an action plan is
submitted proposing the write off of the loan in the current or other accounting period.
After write off approval, the loan is written off the Bank’s books against provisions, and
accrued interest as well as NAB interest is reversed. Then the loan is transferred to an off
balance sheet account until the period required by law (20 years) elapses, for its
permanent write off.
Any revenues against claims written off are credited directly to the Banks results.
Until final write off of the claim, the Bank has the right and can pursue its collection at
any time it considers appropriate.
MARFIN EGNATIA BANK, through its Alternative Channels Network, offers a wide range of
pioneering e-services, on a 24 hours basis, through the following self service channels:
• Website
• Telephone
• ATM network
• Mobile phones
The Alternative Channels exhibit a strong sales orientation, offering a significant contribution to the
Bank’s lending portfolio via the following activities:
• Banking products sales over the phone, via inbound and outbound Telemarketing campaigns
• Consumer and mortgage lending sales through a network of sales experts
10.1 eBanking
The eBanking service provides individuals and business customers with the ability to carry out a
wide range of banking activities, including inquiry, financial and maintenance transactions. In
particular, business subscribers, enjoy a set of specialised services such as automatic payroll
transactions inside or outside the Bank. The Bank was the first to launch eBanking services in
Greece in 1997, as well as to introduce the two factor authentication scheme through the use of
One Time Password security token devices.
10.2 eBrokerage
MARFIN EGNATIA BANK offers investors the ability to enjoy high-value stock exchange
services through the eBrokerage platform. The range of offered services includes purchase and
sale of stocks, participation in IPOs and Capital increases, online monitoring of active portfolios,
order status and order history, all in an absolutely risk free and secure technical environment.
10.3 eInvestment
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The online investment site, via an integrated platform, enables customers to purchase and sell
Marfin Egnatia Bank Mutual Funds or Mutual Accounts, as well as monitor the current value of
their portfolios. It also provides complete information about their orders' status.
10.4 eInsurance
The Bank was one of the first banks in Greece to introduce an innovative product, through which,
Bancassurance transactions can be electronically conducted. It enables customers and noncustomers
to receive and store insurance policy offers for car and house products, to compare
prices among insurance packages and specifically adjust the insurance policies to their personal
needs.
10.5 Mobile Banking
The Bank offers mobile banking services, providing customers with the possibility to monitor the
balances and details of accounts and credit cards, carry out bill payments and transfers of funds,
and obtain information on share prices, indexes, foreign exchange rates and the updated
ATMs/branch network of the Bank on the screen of their mobile phone.
10.6 Phone Banking - Voice Banking
10.6.1 MARFIN Direct
Phone Banking provides 24-hour personalised quality services through an integrated
phone service network with multi-purpose communication channels (Phone Banking and
Voice Banking) creating a dynamic Multi-Channel Contact Centre. A network of
experienced phone representatives are available 24/7 for any kind of information or
transaction, while Voice Banking provides users with banking information and services,
using simple voice commands, even without pressing keys or talking to an agent.
Marfin Direct - Phone Banking has been awarded for its quality services twice at the
European annual Teleperformance CRM Grand Prix 2005 and 2006. The Bank was also
the first bank to introduce the Voice Recognition Technology in Greece and has won the
1st prize in the Best Multichannel Achievement category at the “European Banking
Technology Awards 2005”, for the innovative Speech Recognition technology.
10.6.2 MARFIN EGNATIA BANK Alerts
The Alerts service is yet another pioneering option offered to the Bank's customers,
providing information about their transactions as well as anti-fraud protection. The
service is able to transmit text messages (SMS) to mobile phones or send e-mails, either
in the Greek or the English language, informing customers about their eBanking and
credit card transactions according to customers' predefined settings.
11. Charitable and Cultural Foundations
Apart from its effective business activities, the Group promotes the principles of corporate governance
and invests in corporate social responsibility programmes. The corporate social responsibility programme
applied by the Group includes human aid initiatives as well as the development of local communities and
the protection of the environment. The most significant of such initiatives include the annual organisation
of a radio marathon for children, the revenues of which reinforce nursing, medical treatment and
rehabilitation institutions for children with serious health problems. It is worth mentioning that the
programme also provides financial support to Parnitha National Park protection and development
projects, as well as to sporting associations which maintain teams for children and teenagers.
12. Recent Developments
The Greek economy in 2007 achieved a high growth rate of 4%, almost double the rate in the Eurozone
(2.2%). The general government debt has noticeably decreased to 93.4% of the GDP from 95.3% in 2006,
while the unemployment rate has been on a steep downward trend and reached 8.3% from 9.3% in 2006.
The country has gradually made significant progress in the real convergence process of the Eurozone,
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with per capita GDP reaching 98.4 in 2007 up from 96.9 in 2006 and measured in constant prices with
reference to the average of the Eurozone (100).
2007 was another profit-bearing year for the Greek banking sector, and following the successful
completion of the legal and functional merger of the three banks, the Group has seen great success and
significant growth. At the end of the year, the Group enjoyed total assets of €13.7 billion, a network of
179 branches in Greece and Romania, and 3,256 employees at the Group level.
Note: Financial Statements of comparative periods were reformulated in order to provide information on
what the financial figures of the bank would have been if the merger of the three banks had been effected
on 1 January 2006, that is during the opening of the first financial year, for which comparative figures are
presented. Balance Sheets, Income Statements, Cash Flow Statements and Statements of Changes in
Equity, are based upon historical financial figures of the three merged banks as well as upon elimination
of all transactions and the balances between the three merged banks and their subsidiaries.
Consolidated net profit after tax and minority interests was €135.1 million, a 174% increase compared to
2006. Net profit after tax before minority interests has increased by €69.3 million (an increase of 96%)
compared to 2006.
The Group’s total assets were €13.7 billion, an increase of 47% compared to 2006, while total loans and
advances were €9.6 billion, an increase of 54% compared to 2006. Loans to entities abroad were € 0.5
billion which represents 5.2% of total loans and advances issued by the Group. Respectively, the Group’s
total deposits were €9.3 billion, an increase of 29%. This increase is mainly due to the network’s
extension, the gradual maturity of the branch network, as well as the Group’s customer base expansion.
Total operating income was €514.4 million, a 38.5% increase. The strengthening in both the loans and the
deposits portfolio has led to a significant increase in net interest income that was €267.4 million, a 27%
increase compared to 2006.
Fee and commission income grew by a remarkable 84%, to €197.4 million. The increase was mainly due
to the rise in banking, brokering and investing services, as well as in customers’ portfolio management.
Total operating expenses have also increased by 26% to €258.3 million. The increase in operating
expenses is mainly due to the reestablishment of 10 branches, the opening of 10 new banking centres and
16 new branches in Greece, as well as 11 new branches in Romania. Furthermore, the increase in
operating expenses is also due to expenditure in relation to the merger of the three banks and a small
voluntary retirement programme.
The Group’s operational effectiveness rate has reached 50.2% compared to 55.2% at the end of 2006.
The Group’s increase in profitability has led to a significant strengthening of Return on Assets to 1.23%
compared with 0.84% in 2006, while Return on Tangible Equity has reached 19.6%.
In 2007, a series of strategic decisions were taken with the main objectives of improving the Bank’s
position in the local market and further strengthening of its position abroad.
The most important of these decisions concern:
• Successful completion of the functional and legal merger with absorption of Marfin Bank S.A.
and Laiki Bank (Hellas) S.A. by Egnatia Bank. The new Bank is a subsidiary of Marfin Popular
Bank.
• Network expansion: Within 2007, 16 new branches in Greece and 10 new banking centres in
Romania came into operation, while 11 new branches further expanded the network in Romania.
The outcome of the above decisions brought about significant improvement in market shares across
product lines. The Bank has raised its share in total loans issued to 4.4% in 2007 compared to 3.6% in
2006 and in deposits to 4.8% compared to 3.9% respectively. Equally significant was the improvement of
market shares in specific loan categories. In particular the Bank has improved its market share in
mortgage loans to 2.6% in 2007 compared to 1.8% on the prior year and in business loans to 5.3% from
4.3% respectively. Furthermore, in 2007, the Group’s subsidiary Investment Bank of Greece S.A. took
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over the second position in the trading market with a market share of 18.1% from 12.1% in 2006, while in
the derivative market it remained in first position with a market share of 21% in 2007.
The Group exploits all modern capital adequacy management methods where it has issued a 10 year Bond
loan as secondary capital (Tier II capital) for capital adequacy purposes and participated in the
Schuldschein market.
In such a manner, the Group has succeeded in maintaining a strong and stable capital basis that
traditionally exceeds compliance with the capital requirements of the Bank of Greece (BoG). The Capital
Adequacy ratio as at the end of the year has reached 10.79%, while the Tier ratio has reached 7.95%.
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THE BANKING SECTOR IN GREECE
The banking sector has expanded rapidly in recent years, due to both deregulation and technological
advances. As at 31 December 2007, the date of the most recently available information, there were 47
domestic and foreign banks and other credit institutions operating in Greece (excluding the 16
cooperative banks).
Universal Banks
Traditionally, commercial banks have dominated the Greek financial services market. However,
specialised credit institutions have expanded into commercial banking as a result of significant
liberalisation of the Greek financial services industry, thereby increasing competition in the market. The
distinction between commercial and investment banks has ceased to exist formally and the Bank of
Greece classifies all banks operating in Greece as "universal banks", with the exception of the
Consignment Deposits and Loans Fund (which is a legal entity of public law, fully owned and controlled
by the Hellenic Republic).
There are three banks that are controlled, directly or indirectly, by the Hellenic Republic: Bank of Attica,
the Postal Savings Bank and ATE Bank (formerly the Agricultural Bank of Greece). Over the last ten
years the Hellenic Republic has privatised a large number of credit institutions. For example, in 1998, the
Hellenic Republic privatised the Bank of Central Greece and Creta Bank, in early 1999, Ionian Bank, and,
in March 2002, ETBA, an ATHEX listed industrial development bank. Additionally, a portion of the
Hellenic Republic's indirect shareholding of General Hellenic Bank was sold to private investors in April
1998 and a majority stake was sold to Société Générale in early 2004. The Bank of Macedonia Thrace
was also formerly state controlled until the National Bank of Greece S.A. and the Hellenic Postal Savings
Bank sold 37 per cent. of its total equity to Bank of Piraeus, a private commercial bank, in April 1998. In
2000, France's Crédit Agricole purchased a 6.7 per cent., interest in Emporiki Bank, which was further
increased to 9.0 per cent. in 2002, in connection with the Hellenic Republic's privatisation project. In
August 2006, Crédit Agricole acquired a further 71.97 per cent. interest in Emporiki Bank. Moreover the
Hellenic Republic proceeded with the partial privatisations of the Postal Savings Bank and ATE Bank
through the listing of their shares on the ATHEX. In addition, since September 2000, Banco Commercial
Português, a Portuguese bank, has been active in the Greek market through Millennium Bank.
Although there are currently 17 private universal banks incorporated in Greece, there has been a recent
trend towards consolidation. For example, Ergobank S.A. and EFG Eurobank S.A. merged in July 2000
to form EFG Eurobank Ergasias S.A.. EFG Eurobank Ergasias S.A. merged with Telesis Bank in early
2002 and with UnitBank in December 2003. Similarly, the Bank of Macedonia Thrace, Bank of Piraeus
and Xiosbank S.A., merged in June 2000, creating the Piraeus Group. The Piraeus Group subsequently
acquired a 57.8 per cent. interest in ETBA in March 2002, which was previously a majority state owned
industrial development bank listed on the ATHEX. ETBA was merged entirely into the Piraeus Group in
December 2003. In December 2002, the National Bank of Greece S.A. merged with ETEBA (the
investment banking arm of the National Bank of Greece S.A.). In 2006, Egnatia Bank and Marfin Bank,
along with Laiki Bank, a Cyprus-based bank with a Greek subsidiary, formed a new unified group.
In recent years, most of the major Greek banks have expanded internationally, establishing or enhancing
their presence in South Eastern Europe. The National Bank of Greece S.A. acquired controlling stakes in
Finansbank and Vojvodjanska during 2006 and the first months of 2007, and other Greek banks have
proceeded with acquisitions of banks in the region. EFG Eurobank Ergasias S.A. became the 100%
shareowner of Nacionalna Stedionica Banca in Serbia in March 2007 and took control of over 90% of
DZI Bank in Bulgaria in December 2006. Also, in March 2007, EFG Eurobank Ergasias S.A. concluded
the purchase of a 99% stake of Universal Bank in Ukraine, and at the same time completed the acquisition
of a 70% stake in Tekfenbank in Turkey. Alpha Bank agreed to acquire 90% of the Ukrainian OJSC
Astra Bank in 2008. ATE Bank made its first expansion steps in SEE by acquiring a 20% stake in AIK
Bank in Serbia in October 2006 and a 69% stake of MindBank in Romania in January 2007.
Foreign Banks
There are 28 foreign owned or incorporated credit institutions that are well established in the Greek
banking market. The principal participants in the industry, and the Issuer's principal foreign competitors
in Greece, include Citibank, Bank of Cyprus, Royal Bank of Scotland and HSBC. With the exception of
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Bank of Cyprus, Citibank and HSBC, the majority of foreign banks operating in Greece have little
presence in retail banking services.
Specialised Credit Institutions
The only remaining specialised credit institution is the Consignment Deposits and Loans Fund, which is
an autonomous financial institution, organised as a public law entity under the supervision of the Ministry
of Finance. Its activities mainly consist of the acceptance of consignments (in cash or in kind), the
granting of housing loans to qualifying borrowers (primarily civil servants) and the support of regional
development.
Competition
From April 2002, Greek law allowed non-banking institutions, which are licensed by the Bank of Greece,
to extend consumer credit or loan facilities. These institutions are in direct competition with universal
banks in the consumer credit sector.
as at 30/06/2008, EUR million
* Greek Market Share
Total Assets Loan / Depo
Total Assets / Total
Sh. Equity Deposits Loans
National Bank of Greece 94,541 94% 14 X 23.90% 18.30%
Eurobank 77,256 120% 17 X 14.20% 17.60%
Alpha Bank 57,618 125% 14 X 10.60% 15.70%
Piraeus Bank 51,530 132% 15 X 11.40% 12.20%
Marfin Popular Bank** 35,274 89% 10 X 5.00% 4.80%
Bank of Cyprus 31,565 86% 15 X 4.30% 3.90%
Emporiki*** 29,422 121% 35 X 8.20% 9.30%
_______________
* The information in the above table on "Total Assets", "Loan/Depo" and "Total Assets/Total Sh. Equity" is based on the
Financial reports of peer banks dated 30 June 2008. The information on "Greek Market Share" is as based on the published
presentations of each bank, the Issuer's internal data and Bank of Greece data
** MPB is the largest bank on Cyprus operating in Greece under the name Marfin Egnatia Bank
*** Member of Credit Agricole Group
Regulation and Supervision of Banks in Greece
The Bank of Greece is the central bank in Greece. It is responsible for the licensing and supervision of
credit institutions in Greece, in accordance with Law 3601/2007 (Licensing operations and supervision of
credit institutions), Law 2076/1992, Law 2832/2000 (Deposit Guarantee Fund), Law 2331/1995 (Anti
money laundering) and other relevant laws of Greece, each as amended. It also has supervision and
regulatory powers relating to the operation of credit institutions in Greece.
The EU Council's main Directives on regulation of credit institutions have been incorporated into Greek
law as follows:
(a)
(b)
Directive 2006/48/EC on the taking up and pursuit of the business of credit institutions and
Directive 2006/49/EC on the capital adequacy of investment firms and credit institutions were
incorporated with the Law 3601/2007 and the subsequent Bank of Greece Governor's Acts 2587
(Determination of own funds of credit institutions), 2588 (Minimum capital requirements for
credit risk according to the standardised approach), 2589 (Minimum capital requirements for
credit risk according to the internal ratings based approach), 2590 (Minimum capital
requirements for operational risk), 2591 (Minimum capital requirements for market risk), 2592
(Publication of information on capital adequacy, risks and risk management), 2593 (Calculation
of risk weighted assets for securitisation positions), 2594 (Counterparty risk), 2595 (Internal
capital adequacy assessment process), 2596 (Supervision and control of large exposures), which
were issued in August 2007 and apply from 1 January 2008
Directive 2004/39/EC (Markets in Financial Instruments) was incorporated by the Law
3606/2007.
Credit institutions operating in Greece are obliged to observe the liquidity ratios prescribed by the Bank
of Greece (Act No. 2560/1.4.2005 of the Governor of the Bank of Greece), maintain efficient internal
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audit, compliance and risk management systems and procedures (Acts No. 2577/2006 and No.
2577/9.3.2006 of the Governor of the Bank of Greece, as amended by Act No. 1943/2007 of the Governor
of the Bank of Greece and Decision No. 1839/2006 of the Bank of Greece), submit to the Bank of Greece
periodic reports and statements and provide it with such further information as it may require, and (in
connection with certain operations or activities) make notifications to or request the prior approval (as the
case may be) of the Bank of Greece, in each case in accordance with the applicable laws of Greece and
the relevant Acts, Decisions and Circulars of the Bank of Greece (each as in force from time to time).
Pursuant to Law 3601/2007, the Bank of Greece Governor’s Acts and other relevant laws of Greece, the
Bank of Greece has the power to conduct audits and inspect the books and records of credit institutions.
In case of breach, the Bank of Greece is empowered to require the relevant credit institution to take
appropriate measures to remedy the breach, impose fines, appoint an administrator and finally (where the
breach cannot be remedied or in case of insolvency) revoke the license of the credit institution and place
it into special liquidation under its supervision. In the case of a credit institution having insufficient
liquidity, the Bank of Greece may order a mandatory extension of its due and payable obligations for a
period not exceeding two months (which can be extended for a further one month period) and appoint an
administrator under its supervision.
In accordance with Greek Law 2832/2000, in cases of breach of the regulatory framework, in addition to
other powers to impose sanctions under specific laws, the Bank of Greece has the general power to
impose sanctions against credit institutions.
History and Deregulation
Historically, the Greek banking system was subject to strict regulatory requirements, including
restrictions on:
• determining interest rates;
• the financing of various sectors of the economy (i.e., how, when and where public entities, such
as wholly owned utility companies, could invest their assets); and
• financial services activities in the foreign exchange market.
Since the late 1980s, but predominantly in the early 1990s, a gradual relaxation of the strict regulatory
environment in Greece took place due to:
• increasing interdependence of national economies;
• increasing international pressure for the opening of markets; and
• anticipation of EMU.
Liberalisation of capital movements, through implementation of the relevant EU Directives and in
particular the Second EU Banking Directive, also contributed substantially to deregulation.
Interest Rates
Beginning in 1987, minimum interest rates gradually replaced interest rates previously imposed by the
central bank. Administratively determined interest rates were finally abolished in 1992. The removal on
8 March 1992, of an established minimum rate for savings deposits was the first step towards full
deregulation of bank interest rates. Since then, Greek banks have been free to negotiate interest rates with
customers based on market conditions. In addition, a number of limitations on bank financing of certain
economic activities were eliminated in 1991. As a consequence, credit institutions were allowed to
negotiate freely and grant new types of loans without limitations on the interest rate including loans for:
• working capital;
• the purchase of fixed assets and equipment;
• the repair and purchase of real estate in Greece and the construction of buildings;
• the sale of durables on credit; and
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• consumer credit and personal loans.
Limitations apply to the compounding of interest. In particular, the compounding of interest with respect
to bank loans and credits only applies if the relevant agreement so provides and is subject to limitations
that apply under article 30 of Law 2789/2000 (as amended by article 42 of Law 2912/2001 and article 47
of Law 2873/2000) and article 39 of Law 3259/2004.
Foreign Exchange
Deregulation of the Greek financial services sector was accelerated by adoption of Greek Presidential
Decrees 96/1993 (and corresponding Acts of the Governor of the Bank of Greece No. 2199 2200,
2201/07.03.1993), 104/1994 (and corresponding Acts of the Governor of the Bank of Greece No. 2301,
2302, 2303/16.05.1994) and Greek Law 2076/1992 (implementing the second EU Banking Directive).
Greek Law 2076/1992 decriminalised violations of foreign exchange regulations. Since 1991, borrowers
have been permitted to borrow in foreign currencies for all legitimate business purposes at interest rates
and on terms freely negotiated between the parties. Beginning in January 1992, banks licensed in Greece
to engage in foreign exchange transactions were permitted to enter into spot, forward, swap and similar
transactions in the foreign exchange market, pursuant to Act 1986/1991 of the Governor of the Bank of
Greece.
In 1994, individuals and legal entities in Greece could, pursuant to Act 2344/94 of the Governor of the
Bank of Greece, for the first time engage freely in foreign currency transactions in foreign countries by
filing an application with any bank. Credit institutions in Greece were also authorised to accept deposits
made by natural persons and legal entities in foreign currency.
Starting in 1991, Greek foreign exchange restrictions were gradually relaxed, and were totally eliminated
concurrently with the adoption of the euro on 1 January 2001. However, a 2 per cent. requirement of redeposit
and assignment, which currently applies to deposits in Euro, applies to foreign currency deposits
as well.
Since 1 January 2001, credit institutions operating in Greece and authorised to enter into foreign currency
transactions can freely enter into transactions of any type in foreign currencies and foreign notes, on their
own account and at their own risk, in accordance with the provisions in force.
The foreign exchange rates against the euro are published on a daily basis by the European Central Bank.
Secured Lending
Since 1992, Greek Law 2076/1992, as amended by Greek Law 3601/2007, has permitted mortgage banks
to grant to customers loans and credit that are secured by Greek real and personal property and certain
types of personal security, such as cash.
Mortgage lending is extended mostly on the basis of pre-notation filings ("prosimiosi"), which are less
expensive and easier to record than mortgages, and may be converted into full mortgages upon receiving
a judgment subject to appeal only before the Hellenic Supreme Court from the relevant Greek court in the
event of default.
Compulsory Deposits with the Central Bank
The compulsory reserve requirement framework of the Bank of Greece has been altered in line with
Eurosystem regulations. Effective 10 July 2000, reserve ratios are determined according to the category
of the liabilities and replace the single reserve ratio of 12 per cent. previously in force for commercial
banks. The reserve ratio is set at 2 per cent. for all categories of liabilities comprising the reserve base,
with the exception of the following liabilities to which a zero ratio applies:
• deposits with agreed maturity over two years;
• deposits redeemable at notice over two years;
• repos; and
• debt securities with agreed maturity over two years.
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This requirement applies to all credit institutions.
Guidelines for Risk based Capital Requirements
After a long period of consultation and cooperation among international banks and regulatory authorities,
the Basel Committee on Banking Supervision issued in June 2004 a revised capital adequacy framework
(International Convergence of Capital Measurement and Capital Standards), while in November
2005, the Committee issued its final proposals on the new capital standards, also known as the Basel II
accord. Basel II promotes the adoption of stronger risk management practices, introduces more risksensitive
approaches for the calculation of capital requirements that are conceptually sound and at the
same time pays due regard to the sophistication level of risk management systems and methodologies that
are applied by banks.
The revised framework retains key elements of the 1988 capital adequacy framework, including the
general requirement for banks to hold total capital equivalent to at least 8% of their risk-weighted assets,
the basic structure of the 1996 Market Risk Amendment regarding the treatment of market risk and the
definition of eligible capital.
A significant innovation of the revised framework is the greater use of assessments of risk provided by
banks' internal systems as inputs to capital calculations. In taking this step, the framework is also putting
forward a detailed set of minimum requirements designed to ensure the integrity of these internal risk
assessments. The revised framework introduces capital requirements for operational risk and also
(through Pillar II) directs and expects banks to establish an internal capital adequacy assessment process
taking into account both the Pillar I risks (market, credit and operational) as well as other risks including
but not limited to liquidity risk, concentration risk, interest rate risk in the banking book and strategic risk.
The revised framework provides a range of options of escalated sophistication for determining the capital
requirements for credit risk and operational risk to allow banks and supervisors to select approaches that
are most appropriate for their operations and their financial market infrastructure. Furthermore, through
the third Pillar, Basel II significantly enhances the requirements for market disclosures on both
quantitative and qualitative aspects of risk management practices and capital adequacy.
The framework of Basel II was incorporated into EU Law in June 2006 by the Directives 2006/48 and
2006/49. These European Directives were incorporated into Greek Law in August 2007 by Law
3601/2007. Following the adoption of Law 3601/2007 on August 20, 2007, the Bank of Greece issued ten
Governor's Acts specifying the details for the implementation of Basel II, which took effect from 1
January 2008. As a result of the adoption of these Directives by the Bank of Greece, the Issuer may be
required to maintain higher levels of capital, which could decrease its operational flexibility and increase
its financing costs. Consequently, the Issuer cannot give any assurances that Basel II will not have a
material adverse effect on its financial condition or results of operations in the future. The new regulatory
framework is expected to be amended during 2008 or the first semester of 2009 (see the public
consultation paper issued by the European Commission to the Capital Requirements Directive (CRD),
consisting of Directives 2006/48/EC and 2006/49/EC).
Additional Reporting Requirements
Up to 31 December 2007, all credit institutions in Greece were required to provide the Bank of Greece
with: (1) a quarterly report on capital adequacy; (2) a quarterly report on profitability and exposure to
banking risks (pursuant to Annexes 2 and 3 of Act No. 1313/88 amended by Act No 2563/05); (3)
quarterly data relating to open currency positions (pursuant to Act No. 2291/94, amended by resolution
No 176/18.6.04 of the Banking and Credit Affairs Committee); (4) a quarterly report on loan loss reserves
pursuant to Act No. 2442/99 (amended by Act No. 2513/03 and 2565/05); (5) a quarterly report on
liquidity pursuant to Act No. 2156/92 (amended by Act No. 2560/05); (6) a quarterly report on crossborder
credit exposures pursuant to Act No. 2520/03; (7) a general annual internal audit report (pursuant
to Act No. 2577/2006); (8) a quarterly report on large exposures pursuant to Act No. 2246/93; (9) a semiannual
report on large debtors pursuant to Bank of Greece, Banking and Credit Affairs Committee
resolutions 485/91, 540/94, 159/03 and 915/03; (10) a semi-annual report on credit institution exposures
pursuant to Act No. 2563/05; (11) a quarterly report on securitization pursuant to Act No. 2563/05; and
(12) a semi-annual report on hedge funds pursuant to Act No. 2563/05.
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Following the adoption of Basel II guidelines, the Bank of Greece recently issued a Governor's Act
(2606/21.2.2008) determining the new reporting requirements for credit institutions in Greece. The new
requirements include the following sets of reports:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
(k)
(l)
(m)
capital structure, special participations, persons who have a special relationship with the credit
institution and loans or other types of credit that have been provided to these persons by the
credit institution;
own funds and capital adequacy ratio;
credit risk and counterparty risk;
market risk of the trading book – Foreign exchange risk;
information on the composition of the trading book;
operational risk;
large exposures and concentration risk;
liquidity risk;
financial statements and other financial information;
covered bonds;
combat money laundering and terrorist financing;
information systems; and
other information.
The new reporting framework was put into effect from January 1, 2008 and the first reports must be
submitted to the Bank of Greece for the three-month period ending March 31, 2008.
Deposit Guarantee Fund
In January 1993, the Greek Parliament adopted Law 2114/1993 on the introduction of a deposit protection
fund. This Law was repealed in July 1995 by the adoption of Greek Law 2324/1995, which took into
account EU Council Directive 1994/19/EC on deposit guarantee schemes, and was further supplemented
in June 2000 by the adoption of Greek Law 2832/2000. The Greek deposit guarantee fund took effect in
September 1995. Currently, the fund, which is a private entity according to Greek Law 2832/2000, is
administered jointly by the Bank of Greece, the Hellenic Bank Association, the Ministry of Economy and
Finance and the Association of Greek Cooperative Banks.
The Hellenic Deposit Guarantee Fund is funded by annual contributions of participating credit institutions
(and cooperative banks pursuant to Greek Law 2832/2000 and Presidential Decree 329/2000). The level
of each participant's annual contribution is generally determined according to certain percentages applied
to the total amount of eligible deposits. If accumulated funds are not sufficient to cover the claimants
whose deposits become unavailable, participants may be required to pay an additional contribution.
However, this contribution may not exceed an amount equal to 300 per cent. of a bank's last annual
contribution. This additional contribution is set off against the annual contributions of following years.
Greek law adopted the minimum level of coverage provided by the EU Directive, which amounts to
€20,000 per depositor per credit institution. Accordingly, credit institutions in EU member states that
belong to a system offering a higher level of coverage have a competitive advantage compared to Greek
banks.
Prohibition on Money Laundering
Greece, as a member of the Financial Action Task Force (FATF) and as a member state of the EU, fully
complies with FATF recommendations and the relevant EU legal framework.
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In August 1995, the Greek Parliament adopted Law 2331/1995 (amended by Laws 2479/1997,
2515/1997, 3424/2005 and 3666/2008), which prohibits the use of the financial system to legitimise
revenues generated from illegal activities. This law implemented EU Council Directive 91/308. The
main provisions of Greek legislation on money laundering are as follows:
• money laundering is a criminal offence;
• persons subject to the law include credit institutions, financial institutions, and certain insurance
undertakings;
• credit institutions (and other persons) are required to identify customers, retain documents and
notify authorities of suspicious transactions;
• provisions of private law and banking secrecy do not apply to money laundering activities; and
• a public authority was established pursuant to Law 2331/1995 and is responsible for examining
reports filed by banks with respect to suspicious transactions and for ensuring correct
implementation of this Law.
Among others, several ministries, the Central Bank, the Hellenic Bank Association, the Hellenic Capital
Market Commission, the tax authorities and the police are to participate in the administration of the public
authority.
In July 2002, the Greek Parliament adopted Law 3034/2002, which implemented the International
Convention for the Suppression of the Financing of Terrorism, with which the Issuer is fully compliant.
Additionally, the Issuer complies with the Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism Act of 2001 (known as the "USA PATRIOT Act of
2001"), which took effect from October 2001 and which has implemented a range of new anti money
laundering requirements on banks and other financial services institutions worldwide.
On 13 December 2005, Law 3424 was adopted by the Greek Parliament, which amended and
supplemented the existing legislation on the prevention of money laundering (Law 2331/95) and terrorist
financing (Law 3034/2002), and harmonised Greek legislation with Directive 2001/97/EC.
Furthermore, the Bank of Greece, the Issuer's supervisory body, having taken into consideration the need
for further focussing of the said framework, through its Banking and Credit Affairs Committee issued its
Decision No 231/4/13.10.2006 with a view to preventing the use of the financial system for the purposes
of money laundering and terrorist financing.
This Decision came into force on 3 November 2006, as Annex 4 "Prevention of the use of the financial
system for the purpose of money laundering and terrorist financing" of the Bank of Greece Governor’s
Act No 2577 of 9 March 2006 regarding the "Framework of operation principles and assessment criteria
for the organisation and Internal Control Systems of financial institutions and their managing officers’
respective functions" and was recently amended by the Bank of Greece through its Banking and Credit
Affairs Committee resolutions No 242/6/4.5.2007 and No 257/22.2.2008.
Annex 4 of the Governor’s Act No 2577/9.3.2006 is in line with the third AML/CFT Directive
2005/60EU with which all EU member states should fully comply by 15 December 2007 and also
implements FATF’s 9 Special Recommendations on Terrorist Financing.
Finally, Regulation (EC) No 1781/2006 of the European Parliament and European Council of 15
November 2006 on information on the payer accompanying transfer of funds is binding in its entirety and
is directly applicable in Greece.
Equity Participation by Banks
Banks must follow certain procedures regarding holdings in other companies:
Pursuant to Law 3601/2007 credit institutions may not have a qualifying holding, the amount of which
exceeds 15% of its own funds, in an undertaking that is not a credit institution, a financial institution, an
insurance or re-insurance company, an investment firm or an undertaking carrying on activities which are
a direct extension of banking or concern services ancillary to banking. The total amount of a credit
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institution’s qualifying holdings in such undertakings may not exceed 60% of its own funds. Qualifying
holding for the purposes of the Law means a direct or indirect holding in an undertaking which represents
10% or more of the capital or the voting rights, or which makes it possible to exercise a significant
influence over the management of that undertaking.
For the calculation of the above thresholds, the following shares or holdings are not taken into account:
(a)
(b)
(c)
(d)
shares or holdings that are held by the credit institution as a result of credit support to an
undertaking in distress for a period of one year (that may be extended for one more year
following a resolution of the Bank of Greece);
shares or holdings that are held as a result of underwriting services provided by the credit
institution for a period of six months following the end of the subscription period;
shares or holdings that are held on behalf of a third party; and
shares or holdings included in the trade book of the credit institution.
The above thresholds or the time limits referred to above may be exceeded in exceptional cases following
a decision of the Bank of Greece to that effect, provided that the credit institution either increases its own
funds or takes equivalent measures. The Bank of Greece may also allow the thresholds and the time limits
to be exceeded, provided that the excess is fully covered by own funds which are not taken into account
for the calculation of the capital adequacy ratio.
Central bank. According to the Bank of Greece Act 2604/4.2.2008, credit institutions must obtain prior
central bank approval to acquire or increase a qualifying holding in the share capital of credit institutions,
financial institutions, insurance and re-insurance companies, investment firms, information technology
companies, financial data collection and processing companies, asset and liability management
companies, real property management companies, paying systems management companies and external
credit assessment institutions. The provisions of such Act do not apply to branches of credit institutions
with their registered seat in another country of the European Economic Area, or outside the European
Economic area provided that the Bank of Greece has recognised the equivalency of their supervisory
regime. Qualifying holding for the purposes of the Act means a direct or indirect holding in an
undertaking which represents 10% or more of the capital or the voting rights, or which makes it possible
to exercise a significant influence over the management of that undertaking, whereas indirect holding
means holding by a subsidiary of the credit institution.
Prior approval for the acquisition or increase of a qualifying holding is not required in any of the
following circumstances:
(a)
(b)
the value of the qualifying holding does not exceed in aggregate, taking into account any
increases effected within the same calendar year, 2% of the credit institution's own funds, as
calculated on the basis of the data for the immediately preceding calendar quarter;
the value of the qualifying holding amounts in aggregate, taking into any increases effected
within the same calendar year, between 2% and 5% of its own funds as calculated on the basis of
the data for the immediately preceding calendar quarter, provided that:
• The capital adequacy ratio (on a consolidated basis), after calculating the influence of
such qualifying holding, exceeds the minimum ratio required by law plus (i) one
percentage point in case of credit institutions having the status of a société anonyme and
(ii) five percentage points in case of cooperative banks; and
• The ratio of the basic own funds to the assets of the credit institution amount to at least
6%.
(c)
the acquisition or increase of the qualifying holding:
• is a result of investments made by investment companies of Law 3371/2005 or real
estate investment companies of Law 2778/1999;
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• is the result of underwriting services provided by the credit institution for a period of six
months following the end of the subscription period;
• is effected without the direct or indirect disposal of funds, with the exception of
exchange of shares in case of credit institutions' mergers; in such case the provisions of
paragraphs (a) and (b) above apply;
• The value of qualifying holdings of this paragraph is not taken into account for the
calculation of the qualifying holdings for the purposes of paragraphs (a) and (b) above;
and
(d)
prior approval is also not required in case of the acquisition or increase of a qualifying holding in
an undertaking that is supervised solely by the Bank of Greece, provided that such holding is
subject to approval pursuant to the general provisions regarding the establishment and operation
of such undertaking and the suitability of its shareholders. The value of such qualifying holding
is not taken into account for the calculation of the qualifying holdings for the purposes of
paragraphs (a) and (b) above.
Competition Commission. Subject to EU regulations, new and significant holdings (concentrations) must
be reported to the Greek Competition Commission according to Greek Law 703/1977, as in force.
The Hellenic Capital Market Commission and the ATHEX must be notified once certain ownership
thresholds are crossed with respect to listed companies.
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Mortgage Products
ISSUER'S STANDARD BUSINESS PRACTICES FOR LOAN ASSETS
The Issuer offers a wide range of mortgage products. The basic products fall into two major categories: a
range of pure floating rates and a range of fixed rates converting into floating rates. The floating rates
may be set according to the Issuer's base rate, EURIBOR, or the ECB rate, while the fixed rates are
offered for throughout the life of the loan or for periods of 1, 2, 3, 5 or 10 years before refixing to one of
the above floating rates.
The Issuer provides mortgages with monthly instalments consisting of interest and principal components.
Loans with an "interest only" period or loans with a grace period are offered but account for a very small
proportion of total loans. Any "interest only" period is limited to 2 years and is usually up to 12 months
for mortgage loans. Currently, "interest only" loans make up less than 5% of the Issuer's total portfolio.
Each product category is also available to subsidised mortgage loan borrowers who meet specific prerequisites.
The Issuer offers mortgage loans for:
(a)
(b)
(c)
(d)
(e)
(f)
acquisition of residential property in Greece;
construction of residential property in Greece;
improvement of residential property in Greece;
refinancing of a mortgage loan granted by another credit institution for one of the above purposes;
home equity loans; and
financing of commercial property to sole proprietors and professionals (e.g. doctors and lawyers).
Origination
For origination the Issuer utilises the following distribution and referral channels:
Branches
Branches are the main channel for the origination of mortgage loans. Each of the Issuer's branches is
staffed with sales people focused solely on customer service and selling the Issuer's products, while all
operations are centralised. As at 31 December 2007 the majority (65%) of the Issuer's 160 branches were
located in Athens and Salonica.
Real Estate Agents / Brokers
The Issuer co-operates with about 500 real estate agents and brokers, who may refer customers. All sales
processes are undertaken by the branches. The Issuer prefers its branch to sell, service and support the
customer and so does not accept applications from third parties. Mortgage applications through agents or
brokers have a 65% approval rate and account for approximately 20% of the total mortgage origination of
the Issuer.
Underwriting
Credit Process
The Issuer first screens mortgage customers at branch level during the sale process, where the branch
officer collects all the documentation including: LTV, purpose of the loan, income of the applicants, past
rejected or abandoned applications of the applicant and checks for fraudulent documents. All credit
approval decisions are made centrally by the respective mortgage credit department.
The Issuer's formal mortgage underwriting process is split into two sections, the Credit Section and the
Contracting Section:
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Credit Section: the approval procedure is completely centralised and no limits are approved at branch
level. The mortgage credit department consists of 45 persons, all checks take place upon the submission
of an electronic application. The pre-approval criteria that are checked and should be met for all
applicants include the purpose of the loan, the instalment to income ratio, LTV and/or type of collateral,
Credit Bureau checks, age, global relationship with the Issuer, global exposure to the Issuer or other
institutions, past rejected or abandoned applications of the applicant and a fraudulent documents' check.
Contracting Section: the mortgage contracting department is organised in 3 groups with specific
responsibilities in order to offer a high quality service to mortgage customers, meet timelines, accelerate
processing backlogs, better identify errors, improve recovery and finally eliminate bottlenecks in
servicing.
Lending Criteria
Certain key features of the criteria applied prior to approval of any advance in respect of a Loan Asset
(the "Lending Criteria") are set out below. The Issuer has the right to vary or waive the Lending Criteria
from time to time in the manner of a reasonably prudent mortgage lender (a "Prudent Mortgage
Lender") and the Issuer may previously have waived or varied the Lending Criteria acting as a Prudent
Mortgage Lender in respect of the Loan Assets to be comprised in the Cover Pool. Only underwriting
staff expressly granted the authority to do so may approve applications for Loan Assets which vary from
the Lending Criteria.
The Issuer always has first pre-notation on residential houses. The second is only accepted if the first prenotation
also belongs to the Issuer.
The ratio of debt-to-income must be less than 40% taking into account undeclared income whenever this
is justified by applicant's activity.
Residential properties and land can be used as security for a mortgage loan if they meet the Issuer's
requirements:
• residences should be built with a construction license;
• land should be "integral and developable"- able to be used for residence construction.
The LTV ratio is the initial amount of the loan relative to the commercial value of the property appraised
by external evaluators (collateral can consist of property or any additional security offered). Normally the
LTV should not exceed 80% of the collateral's commercial value, while for loans with a higher LTV (up
to 100%) extra guarantees are usually required (guarantors with sufficient income and property ownership
or a pre-notation on a second property).
Loan tenor should not be less than 3 years and should not exceed 40 years (considering that the age of the
borrower should not exceed 72 years at the maturity of the loan).
Loan Sizes
Loan applications vary from a minimum of €30,000 to an unlimited amount. The average loan amount is
approximately €100,000.
Loan security
The pre-notation on the property is equal to 120% of the loan amount. Domestic mutual funds or time
deposits are also accepted as security.
Income Limits
As part of the credit process, the applicants' financial data is gathered by the branch and sent to the Credit
section. A tax statement, a recent salary slip and E9 (real estate properties' list for tax reasons where one
exists) are mandatory.
The Issuer has a conservative and strict policy for low income applicants while the policy is more flexible
for higher income applicants. The methodology used is that the credit analyst deducts a specific amount
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from the customer's monthly income depending on the number of family members. This specific amount
can cover monthly needs of the household, whilst the remaining income can be set aside for the payment
of loan instalments. In order to protect both individuals and Greek banks from a potential economic
recession, the Bank of Greece issued in September 2005 related guidelines for Greek banks. The
guidelines state that the sum of the monthly instalments should not exceed 40% of the monthly gross
income of the borrower, where gross income includes overtime and bonuses if they are declared as
income in the borrower's last tax statement. According to the above directive the sum of all other monthly
outgoings, recorded by the credit bureau, plus the new mortgage loan instalment should not exceed 40%
of the borrower's monthly gross income. In the event that a guarantor exists, his/her gross income as well
as his/her monthly loan obligations are included in the above calculations.
Banks can override this approach if they have information of a customer's additional income or they are
convinced that the customer has additional income i.e. loans with low LTV etc. The Issuer has adopted
this guideline and sometimes asks for a guarantor or overrides this rule if is convinced there is additional
income, e.g. specific cases of self-employed professionals (doctors, accountants etc) who can demonstrate
the existence of other estate ownership, liquidity or other income. In these cases there is an adjustment
according to their income.
Property Valuation
For property valuation the Issuer uses approximately 100 independent real estate valuators and agencies
throughout Greece. The Issuer's top real estate valuator (by frequency of use) is King Hellas S.A., which
is affiliated to King Sturge real estate valuators in the United Kingdom. The majority of the Issuer's real
estate valuators follow TEGOVA (The European Group of Valuers' Association) property valuation
standards.
The valuation report is composed after an on-site visit to the property. The final report includes a short
description of the property, the market value and book value (according to the Greek taxation system) and
value of the property in case of a rapid liquidation.
Insurance
The Issuer is responsible for general administration of the insurance premiums and monitoring. The latter
is important as fire and earthquake insurance is required for all residential properties. The Issuer confirms
the insurance coverage of each property before making any disbursements.
Servicing & Collections
The Issuer is responsible for general administration of the loan including all payment processing activities
including partial prepayments, insurance payments and monitoring. All mortgage loans are administered
and serviced on a centralised basis.
Payments of mortgage instalments are made on a monthly basis. Every borrower has an account with the
Issuer into which funds are deposited ready to be debited by the bank through a direct debit process.
The consumer collections division is responsible for collecting and administering loans which are in
arrears and have defaulted. For overdue instalments, the consumer collections division follows a strict
and tight procedure depending on the number of days in arrears. No later than 15 days after the first
missed payment the borrower is called by an agent of the Issuer's call centre and reminded of his/her
missed obligation to pay the monthly instalment. Also a reminder letter is mailed to the customer on the
29th day of delinquency. Further calls, reminder letters and reminder messages are made with increasing
frequency, escalating the severity of the process until the amount overdue is either repaid or the loan
reaches 180 days in arrears, at which point foreclosure proceedings will be commenced.
The Foreclosure Process
After the 180th day of delinquency, the collection department sends the file of the customer to an external
law firm. The law firm, on behalf of the Issuer, serves the customer with a notice of termination of the
respective loan agreement stating also a limited number of days during which the borrower can pay off
the whole loan and forestall legal proceedings. After officially terminating the loan, the Issuer requests
the first instance court to issue a payment order on the basis of the signed loan agreement, the loan
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account transaction statements from the advance of the loan amount until the termination of the loan and
the termination notification.
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THE MORTGAGE AND HOUSING MARKET IN GREECE
The first mortgage lending institution, the National Mortgage Bank of Greece, was established in 1927,
followed by the National Housing Bank in 1930. Both institutions were under government control, but
have since been merged with the National Bank of Greece. Since then, another three institutions under
government control have become active in the field of mortgage lending: the Postal Savings Bank
(Tachydromiko Tamieftirio), the Consignment Deposits and Loans Fund (Tamio Parakatathikon kai
Daneion), and Agricultural Bank, the first two providing loans to civil servants and the latter providing
loans mainly to farmers. In 1985 the state monopoly of mortgage lending was ended, allowing
commercial banks to enter the market, provided that their mortgage financing did not exceed 2% of their
deposits. From the early 1990's onwards the mortgage loans market was rapidly deregulated and as a
result many commercial banks operating in Greece (foreign and national) now have a presence in this
market. At the end of 2007 the five largest lenders in the Greek residential mortgage market were the
National Bank of Greece, Alpha Bank, Eurobank EFG, Emporiki Bank and Piraeus Bank, together
accounting for around 68.6% of the total market.
The size of the Greek mortgage market has grown rapidly from a relatively low percentage of GDP
(10.7% in 2001 to 30.2% in 2007), partly due to the process of convergence of the Greek economy to
achieve integration into the European Monetary Union and the resulting lowering of interest rates from
25% in the early 1990s to less than 6% in 2003 and to less than 5% in 2007, and partly due to increasing
demand. The residential mortgage market demonstrated an impressive annual growth, on average, by
29.8% during the period 2000-2007, although, in the last year, the growth was slightly slower, around
21.6%.
Mortgage Products
The Greek mortgage market is characterised as an emerging market, with fairly standard products on
offer, although, in the last few years, it expanded further to include a variety of new more sophisticated
products, due to increasing demand and strong competition among lenders. Currently, most banks offer
the following mortgage products:
(a)
(b)
(c)
(d)
long-term fixed rate mortgages (they account for a small percentage of the market);
medium-term fixed rate mortgages (e.g. 2, 3, 4, 5 and 6 years), converting to a floating rate
thereafter; (currently forming the majority of new originations);
floating rate mortgages, based on EURIBOR or ECB refinancing rates; and
more recently, loans in foreign currencies, mainly CHF.
Typically, mortgage loans have a term of 15 to 30 years, although the maximum term is 40 years.
Annuity loans are the most common form of repayment, while interest-only loans account for only a very
small proportion of total loans.
The Greek Housing Market
Strong disposable income growth and low real interest rates, in addition to positive demographic trends
(reflected in the acceleration of the pace of new household formation), emerge as the major determinants
of strong housing demand sustaining residential real estate prices in recent years. During the 2000-07
period, the Greek economy was characterised by a strong growth in real (deflated by GDP deflator) per
capita disposable income (3.6 per cent. year on year), which far exceeded the euro area average (by 1.9
per cent.). As a result, the purchasing power of households increased by a cumulative 23 per cent. during
the period 2000-2007 in terms of per capita disposable income. Housing occupancy is rather high,
approaching 80% (among the highest in the EU). Nevertheless, demand for housing remains strong as it is
underpinned by demographic trends. Population growth in the household formation age group - typically
persons in their early 30s to mid-40s – rose strongly by a cumulative 7.1 per cent. between 2000 and 2006
despite the low population growth. Demand has been further bolstered by increased immigration during
the past 15 years. Further support for household formation has arisen from the change in the traditional
family structure with younger members preferring living on their own and by the demand for holiday
homes. The average household size has decreased to 2.6 persons in 2006 compared with 2.8 in 1999 and
3.1 in 1994. This level is still far above the corresponding average for the EU of 2.3 persons. Overall, the
number of households has in fact grown considerably more than the natural growth of the resident
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population, increasing by 7.9 per cent. cumulatively from 2000 to 2006 compared with a growth rate of
just 1.6 per cent. for the population as a whole.
The most common type of property available is the apartment, with maisonettes and detached houses
being restricted to the more affluent city areas.
Security for Housing Loans
In Greece, security for housing loans is created by establishing a mortgage. A mortgage can be
established by a notarial deed (or by a judicial decision, or by law in special cases). The establishment of
a mortgage by notarial deed is quite costly and it is therefore not preferred among banks and borrowers.
Instead, in most cases, banks obtain a pre-notation of a mortgage, which is an injunction over the property
entitling its beneficiary to obtain a mortgage as soon as a final judgment for the secured claim has been
obtained but which is valid as of the date of the pre-notation. From the point of view of enforceability,
ranking of the security and preferred right to the proceeds of the auction, there is no difference between a
holder of a mortgage and a holder of a pre-notation of a mortgage, since the latter is treated as a secured
creditor of the property. Both the holder of a pre-notation of a mortgage and a mortgagee need an
enforcement right before commencing enforcement procedures. The difference between them is that the
pre-notation is a conditional security interest whose preferential treatment is subject to the unappealable
adjudication of the claim it purports to secure, whereas a mortgagee's claim is enforceable pursuant to the
mortgage deed itself.
Establishing a pre-notation is the most common way of establishing security for a housing loan in Greece.
The pre-notation, as a form of injunction, can be established with or without the consent of the owner(s)
of the property on which the mortgage will be secured but is only granted pursuant to a court decision.
The procedures adopted by lenders of housing loans has in practice led to an arrangement whereby prenotations
are granted "by consent" where both the lending bank and the borrower appear before the
competent court and consent to the establishment of the pre-notation on the specific real estate property.
The court issues the decision immediately (in fact, the decision is drafted beforehand by the lending bank
and is certified and signed by the judge who hears the claim). Having certified the court decision and a
summary thereof, the lawyer of the lending bank takes them to the Cadastre or the Land Registry, where
applicable, along with a written request for the issuance (by the Cadastre or the Land Registry) of
certificates confirming:
(a)
(b)
(c)
(d)
the borrower's ownership of the mortgaged property;
the registration and class of the pre-notation;
the absence of (judicially raised) claims of third parties against the current and all previous
owner(s) of the mortgaged property; and
any other mortgages, pre-notations or seizures preceding the pre-notation registered by the bank.
At the same time the bank's lawyer effects a search at the Cadastre or the Land Registry, in order to
confirm the uncontested ownership of the borrower and the first priority nature of the mortgage or prenotation,
before the loan can be disbursed. Once the certificates are issued, they are reviewed by the
bank's legal department and are included in the borrower's file. The legal review of both the ownership
titles and the pre-notation registration is based on public documents, i.e. on notarial deeds and certificates
issued by the competent land registries. The history of the ownership titles for the previous 20 years is
examined (which is the period for adverse possession). Such a review together with a title search at the
Cadastre or the Land Registry, precedes the approval of the loan. Upon registration of the pre-notation, a
second title search is made to confirm the status quo.
Enforcing Security
It is the Issuer's policy to commence enforcement proceedings once an amount remains unpaid under a
loan for more than 180 days, at which point, the loan is terminated. Once a loan is in default and
terminated, a notice is served on the borrower and on the guarantors, if any, informing them of this fact
and requesting the persons indebted to pay all amounts due within a limited period of time. Following
notification if the non-payment continues, a judge of the competent First Instance Court is presented with
the case and will issue an order for payment to be served on the borrower together with a summons for
immediate payment. Service of the order and summons for payment is the first action of enforcement
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proceedings. Three working days after serving the payment order and summons, the property can be
seized and the auction process starts (see below for a description of the auction process). The borrower,
after being served the order for payment, is granted 15 working days to contest the validity of the order
for payment, either on the merits of the case or on the ground of procedural irregularities. This can be
done by filing an Article 632-633 Annulment Petition before the Greek Court of First Instance. At the
same time, the borrower can file an Article 632 Stay of Execution Petition for the suspension of the
enforcement proceedings as a provisional measure. At the time of filing the Article 632 Stay of
Execution Petition, in most cases, an immediate stay of execution is granted up until the hearing of the
Stay of Execution Petition. If the court decides that the arguments in the Article 632-633 Annulment
Petition are correct and reasonable, a stay of execution will be granted to the petitioner until the issue of
the decision on the Article 632-633 Annulment Petition. If the judge decides that the Article 632-633
Annulment Petition has no grounds and rejects this, the stayed enforcement procedures can continue. If
the borrower has not filed an Article 632-633 Annulment Petition and Stay of Execution Petition in the 15
working days period, then the bank may again serve the order for payment whereby a second period of
ten working days is granted to the borrower to contest the procedure. Failure to contest the order for
payment will result in the bank acquiring a final deed of enforcement and then the pre-notation is
converted into a mortgage.
The Article 632-633 Annulment Petition will be heard within 12 to 14 months after its filing and another
six to eight months are required for a decision to be issued by the court, upon which either the
enforcement procedures are continued due to a decision rejecting the Article 632-633 Annulment Petition,
or the legal process before the Greek Court of Appeal is continued by the bank until a final decision is
reached regarding the contested order of payment. The defeated borrower may also continue the legal
process but, in the experience of the Issuer, it is highly unusual for a stay of enforcement proceedings to
be granted by the Greek Court of Appeal if the initial suspension was granted up until the decision of the
First Instance Court was made.
The borrower (being, in respect of a Loan Asset, the individual specified as such in the relevant mortgage
terms together with each individual (if any) who assumes from time to time an obligation to repay such
Loan Asset or any part of it (the "Borrower")) may also file with the relevant Greek Court of First
Instance an Article 933 Petition for Annulment of certain actions of the foreclosure proceedings based on
reasons pertaining to both the validity of the order for payment and to procedural irregularities. Both
Article 632-633 and Article 933 Annulment Petitions may be filed either concurrently or consecutively,
but it should be noted that the Article 933 Annulment Petition may not be based on reasons pertaining to
the validity of the order for payment, once the order of payment has become final as mentioned above.
The time for the filing of an Article 933 Annulment Petition varies depending on the foreclosure action
that is being contested. The filing of an Article 933 Annulment Petition entitles the Borrower to file an
Article 938 Stay of Execution Petition in relation to the enforcement until the decision of the Greek Court
of First Instance on the annulment motion is issued. Again, foreclosure proceedings may be suspended
until the hearing of the Article 938 Stay of Execution Petition, which, in a normal case where the
Borrower seeks a stay of the auction, takes place five days prior to the auction and the relevant decision is
issued two days prior to the auction. It should nevertheless be noted that such a stay is more difficult to
obtain if the Court has already rejected a stay requested for similar reasons under Article 632.
The actual auction process begins with seizure of the property, which takes places three working days
after the summons for payment is served on the borrower. The seizure memorandum is issued by a bailiff
and contains the auction date (a Wednesday from 12.00 hours to 14.00 hours) and location and the notary
public who will act as the auctioneer. At this point all mortgagees (including those holding a prenotation)
are informed of the upcoming auction.
The minimum auction price is two thirds of the property value, set forth in the memorandum of the bailiff
and can be contested by the borrower or any other lender if supported by evidence that the property value
is significantly higher or lower than the proposed auction value. In such case, the auction is postponed
until a date not exceeding six months from the initial auction date and a new reserve price is set, both as
determined by a Greek Court of First Instance judge.
In the auction, the property is sold to the highest bidder who then has 15 days to pay the auction price.
Once the price of the property is paid, the notary public prepares a special deed listing all the creditors
and allocating the proceeds of the auction. Each creditor must announce its claim to the notary public
within 15 days of the auction.
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The proceeds of an auction following the enforcement against a property securing a mortgage loan have
to be allocated in accordance with articles 975 and 976 of the Greek Civil Procedure Code. These articles
require the notary public which acted as the auction clerk to deduct from the proceeds the expenses
(including legal, bailiff's and notarial fees) incurred in connection with the enforcement and to prioritise
claims against the relevant Borrower pursuant to employment relationships and contracts for legal and
educational services arising in the previous two years. Up to one-third of the remaining proceeds are
allocated to the following creditors of the Borrower, to the extent applicable, in the following order:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
claims for hospitalisation and funeral costs of the Borrower and his/her family arising in the
previous 12 months;
costs for the nourishment of the Borrower and his/her family arising in the previous six months;
claims by farmers or farming partnerships arising from sale of agricultural goods arising in the
previous 24 months;
claims of the Greek State and municipal authorities that are due and payable prior to the auction;
claims of social security funds arising prior to the day of the auction; and
claims by the collective guarantees fund (if the borrower is or was an investment services
company within the meaning of Greek law 2396/96) arising in the previous 24 months (this
should not be relevant for any Borrower).
The remaining two-thirds of the proceeds is allocated, first, to secured creditors in order of class and date
of creation of security and any remaining amounts are allocated to unsecured creditors. Accordingly, the
Issuer as owner of a first (and in some cases, second) ranking pre-notation could be limited to receiving
approximately two-thirds of the proceeds raised by an auction of a property securing a Loan if a claim
under article 975 of the Greek Civil Procedure Code exists. In such case, the proceeds may not be
sufficient to discharge the amount that is owed by the Borrower to the Issuer under the Loan which may
in turn affect the Issuer's ability to meet its obligations in respect of the Covered Bonds.
Once the allocation of proceeds among the creditors of the Borrower has been determined pursuant to a
deed issued by a notary public, the creditors of the Borrower may dispute the allocation and file a petition
contesting the deed. The Greek Court of First Instance adjudicates the matter but the relevant creditor is
entitled to appeal against the decision to the Greek Court of Appeal. This procedure may delay the
collection of proceeds by up to two and a half years. This can further delay the time at which the Issuer
finally receives the proceeds of the enforcement of the relevant property. However, the law provides that
a bank is entitled to the payment of its claim even if its allocation priority is subject to a challenge,
provided that the bank provides a letter of guarantee securing repayment of the money in the event that
such challenge is upheld.
Following the example of other countries, a new law for the protection of borrowers has been passed by
the Greek Parliament which provides, among other things, that (a) enforced public auctions should be
made by sealed bids and, if there is more than one bidder, be followed by oral bids between the two
highest bidders, (b) the starting price of the auction must be at least equal to the “objective” price of the
property, as assessed for tax purposes, (c) each bid must be accompanied by a bank guarantee or banker’s
draft of an amount equal to the starting price, (d) properties being the sole residence of the debtor may not
be seized and judicially sold by credit or financial institutions for claims not exceeding the amount of
Euro 20,000, in cases where the debtor is in a state of proven impossibility to perform his contractual
obligation through no fault of his own. This restriction would not apply in case of debts secured by
mortgages and pre-notations granted with the consent of the debtor and thus will not apply to any of the
loans in the Cover Pool, which are all secured by such charges.
Set off
The Borrowers cannot exercise set off rights against the receivables constituting the Cover Pool because
they are unattachable under a specific provision of the Greek Covered Bond Law (art. 91(8)) (unless
otherwise provided in the Programme) and claims being unattachable are not subject to set-off, pursuant
to art. 451 of the Greek Civil Code. Accordingly the Borrowers may not exercise set off rights, such as
those in relation to prepayment penalties etc, against the Issuer on the basis of the general provision of
art.451 of the Greek Civil Code, which explicitly prohibits set off against unattachable claims. This
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estriction does not apply to the set off rights of the Issuer, as lender of Loans, against the Borrowers (e.g.
in respect of deposits or remittances) and the Issuer, and its successors and assigns (such as the Trustee)
may exercise set-off rights against the Borrowers.
Data Protection
The relevant data protection provisions of Greek law are: (i) Law 2472/1997 (implementing European
Data Protection Directive 95/46/EC) and (ii) several Rulings of the Data Protection Authority on specific
issues having regulatory force. Administrative and criminal fines and penalties can be imposed for
breaches of the Law.
As personal data is defined as any and all information relating to a natural person (the "data subject"),
(e.g. name, telephone number, address, account number, profession etc), this does not include
consolidated data of a statistical nature, where the data subjects cannot be identified. Legal entities are not
deemed to be data subjects and do not fall under the law. Specific (and more strict) provisions apply to
“sensitive” data i.e. data concerning health, racial or ethnic origin, political opinions, religious or
philosophical beliefs, trade-union membership etc.
For the lawful processing of personal data the consent of the data subject is, in principle, required. Such
consent must be free, explicit, specific, unambiguous and informed, in the sense that prior to obtaining the
consent, the data controller must have clearly provided information on the purpose of the processing, the
type of personal data to be processed and the recipients thereof. For these purposes it is not possible to
assume consent or imply it if the data subject is notified of the processing and does not object to it.
Nevertheless, the data subject’s consent is not the only legitimate basis for the lawful processing of
personal data. Processing is permissible without consent if certain criteria are met, as specified in the
Law 2472/1997 (art. 5 para. 2 a-e). In particular, among other things, personal data may be processed
lawfully, without the subject’s consent, if the processing is necessary for (i) compliance with any legal
obligation to which the controller is subject and (ii) the purposes of legitimate interests pursued by the
controller or by any third party to whom the data is disclosed, provided that such legitimate interest
prevails over the rights and interests of data subjects to keep their data confidential. Either of the
aforesaid criteria, if met, establishes a legitimate basis for the processing of the personal data of the data
subjects’ without their consent.
Commencement of each processing by any processor (filing system) is separately notified to the Data
Protection Authority. Notification must include: data controller particulars, description of data to be
processed, purpose of processing, intended recipients of the data, intended duration of processing, any
possible transfer to third countries (outside the EU), the system’s security measures. Any change of the
above information must also be promptly notified to the Data Protection Authority. The obligation for
notification is continuous in the sense that the creation of any new filing system must be notified to the
Data Protection Authority, as per the above.
Special rules apply to the processing of sensitive data, in general the collection and processing of such
data is prohibited. However, exceptionally, the collection and processing of sensitive data, as well as the
establishment and operation of the relevant file, will be permitted by the Data Protection Authority, when
certain conditions are satisfied (e.g. the data subject has given his/her written consent, or processing is
necessary to protect the vital interests of the data subject or the interests of a third party provided for by
law, or it is necessary for the recognition, exercise or defence of rights in a court of justice or before a
disciplinary body, or it is carried out for the purposes of national security, criminal or correctional policy
and pertains to the detection of offences, criminal convictions or security measures, protection of public
health or the exercise of public control on fiscal or social services, or if it relates to health maters of the
data subject or research and scientific purposes, or, finally, if processing concerns data pertaining to
public figures, provided that such data are in connection with the holding of public office or the
management of third parties' interests, and is carried out solely for journalistic purposes).
Permission for the collection and processing of sensitive data, as well as permission for the establishment
and operation of the relevant file, is granted by the Data Protection Authority, upon the request of the
Controller and is issued for a specific period of time, depending on the purpose of the data processing. It
contains certain details, as specified in the law (e.g. the full name or trade name or distinctive title, as well
as the address, of the Controller and his/her/its representative, if any, the address of the place where the
file is established and the categories of personal data which are allowed to be included in the file, the time
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period for which the permission is granted, the terms and conditions, if any, imposed by the Data
Protection Authority for the establishment and operation of the file and, finally, the obligation to disclose
the recipient or recipients as soon as they are identified).
Cross border transfer of personal data within the EU is permitted without any restriction, license or
notification. However, for the transfer of data to a non-EU country, a license from the Data Protection
Authority is required. The license is granted if the third country ensures an adequate level of personal data
protection. Such license is not necessary, if the European Commission finds, in accordance with the
procedure referred to in Article 31 (2) of the Directive 95/46, that a third country ensures an adequate
level of protection within the meaning of the Directive 95/46.
"Controller" means the natural or legal person, public authority, agency or any other body which alone
or jointly with others determines the purposes and means of the processing of personal data.
"Processing" of data means the automatic or manual recording storage, maintenance, use, transmission,
rectification or blocking of data.
"Processor" means a natural or legal person, public authority, agency or any other body which processes
personal data on behalf of the controller.
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DESCRIPTION OF PRINCIPAL DOCUMENTS
Servicing Deed
Pursuant to the Servicing Deed the Servicer has agreed to:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
service the Loan Assets comprised in the Cover Pool and administer the Loan Assets in
accordance with the operating procedures scheduled to the Servicing Deed;
operate the Collection Account and the Transaction Account;
provide the Issuer and the Trustee with certain cash management, calculation, notification and
reporting information in relation to the Transaction Account;
check compliance with the Statutory Tests;
take the necessary action and giving the necessary notices to ensure that the Transaction Account
(and the ledgers thereof) is credited and debited with the appropriate amounts;
maintain adequate records to reflect all transactions carried out by or in respect of the
Transaction Account (and the ledgers thereof);
invest the funds credited to the Transaction Account in Authorised Investments; and
notify the Borrowers following the delivery of a Notice of Default or the occurrence of an Issuer
Insolvency Event or Moody's Issuer Downgrade Event (each of which is continuing) to make all
payments directly to the Transaction Account (or such other account as is approved in writing by
the Trustee).
The Servicer will have the power to exercise the rights, powers and discretions and to perform the duties
of the Issuer in relation to the Loan Assets that it is servicing pursuant to the terms of the Servicing Deed,
and to do anything which it reasonably considers necessary, convenient or incidental to the servicing of
the Loan Assets (the "Services").
Appointment of Replacement Servicer
Upon the occurrence of any of the following events (the "Servicer Events"):
(a)
(b)
default is made by the Servicer in ensuring the payment on the due date of any payment required
to be made under the Servicing Deed and such default continues unremedied for a period of three
Athens Business Days after the earlier of the Servicer becoming aware of the default and receipt
by the Servicer of written notice from the Issuer (if it is not the same entity as the Servicer) or the
Trustee requiring the default to be remedied; or
without prejudice to paragraph (a) above:
(i)
(ii)
(iii)
default is made by the Servicer, in the performance or observance of any of its other
covenants and obligations under the Servicing Deed; or
any of the warranties given by the Servicer proves to be untrue, incomplete or inaccurate;
or
any certification or statement made by the Servicer in any certificate or other document
delivered pursuant to the Servicing Deed proves to be untrue, incomplete or inaccurate,
and, in the sole opinion of the Trustee, such default or such warranty, certification or statement
proving to be untrue, incomplete or inaccurate is materially prejudicial to the interests of the
Covered Bondholders and (if such default is capable of remedy) such default continues
unremedied for a period of ten Athens Business Days after the earlier of the Servicer becoming
aware of such default and receipt by the Servicer of written notice from the Issuer (if it is not the
same entity as the Servicer) or the Trustee requiring the same to be remedied; or
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(c)
(d)
(e)
(f)
(g)
it is or will become unlawful for the Servicer to perform or comply with any of its material
obligations under the Servicing Deed; or
if the Servicer is prevented or severely hindered for a period of 60 days or more from complying
with any of its material obligations under the Servicing Deed as a result of a force majeure event;
or
any Issuer Insolvency Event occurs in relation to the Servicer (except that references therein to
the Issuer shall be construed as being to the Servicer); or
if the Servicer is the same entity as the Issuer, any Issuer Event occurs which is continuing; or
the Servicer's ratings are downgraded below BBB- by Fitch or Baa2 by Moody's (as applicable),
the Trustee shall use reasonable endeavours in accordance with the terms of the Servicing Deed to take
steps to appoint a replacement servicer to carry out the Services.
The Cover Pool
The Issuer shall be entitled, subject to filing a Registration Statement so providing, to:
(a)
(b)
designate Additional Cover Pool Assets which comply with the Eligibility Criteria to the Cover
Pool for the purposes of issuing further Series of Covered Bonds and/or complying with the
Statutory Tests and/or maintaining the initial ratings assigned to the Covered Bonds provided that,
with respect to any Cover Pool Assets assigned after the Issue Date for the first Series of Covered
Bonds which are non-Euro denominated assets and/or have characteristics other than those
pertaining to the Initial Assets, Fitch has provided confirmation in writing to the Issuer that the
ratings on the Covered Bonds would not be adversely affected by, or withdrawn as a result of
such assignment and Moody's has been notified of such assignment; and
prior to the occurrence of an Issuer Event which is continuing or would occur as a result of such
removal or substitution: (i) remove Cover Pool Assets from the Cover Pool, provided that the
Issuer has delivered to the Servicer and the Trustee a certification from a reputable accounting
firm of international standing confirming that the Statutory Tests are satisfied and will not be
breached by such removal, or (ii) substitute Cover Pool Assets with Additional Cover Pool
Assets, provided that, for any substitution of Additional Cover Pool Assets which are non-Euro
denominated assets and/or have characteristics other than those pertaining to the Initial Assets,
Fitch has provided confirmation in writing to the Issuer that the ratings on the Covered Bonds
would not be adversely affected by, or withdrawn as a result of such substitution and Moody's
has been notified of such substitution.
Upon any addition (including by way of substitution) to the Cover Pool of Additional Cover Pool Assets,
the Issuer shall deliver to the Trustee a certificate representing and warranting that the Additional Cover
Pool Assets comply with the Eligibility Criteria (if applicable) and are subject to the Statutory Pledge (or
to the extent not governed by Greek law, security has been created over them to the satisfaction of the
Trustee) and that no Issuer Insolvency Event or Test Event has occurred.
Representations and Warranties as to the Mortgage Assets
The Issuer will make certain representations and warranties in respect of the Loan Assets including
statements to the following effect which together constitute the "Eligibility Criteria":
Eligible Receivables
The Receivables arising under each Loan Asset Agreement are eligible receivables in that they:
(i)
(ii)
(iii)
(iv)
are originated by the Issuer and legally and beneficially owned by the Issuer;
were originated in compliance with the Lending Criteria applicable at such time;
are created in compliance with the laws of the Hellenic Republic;
under the laws of the Hellenic Republic are payable without any deduction, rebate or discount;
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(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
(xii)
(xiii)
(xiv)
(xv)
are not subject to any dispute, right of set off, counterclaim, defence or claim existing or pending
against the Issuer;
do not arise in respect of Loans in Arrears or Defaulted Loan Assets;
are not Subsidised Loans unless they have been originated in compliance with the relevant OEK
framework and/or procedures set out by the Greek State (as applicable);
can be segregated and identified for ownership on any day;
are debts, the rights to which may be freely sold and transferred by way of assignment under the
law of the Hellenic Republic;
are capable of being subject to the Statutory Pledge;
are free and clear of any higher or equal ranking encumbrances unless any such encumbrances
relate to Loans which are also in the Cover Pool and remain in the Cover Pool for as long as such
Loan;
are secured by a valid and enforceable Mortgage or Pre-Notation over a completed residential
Property, alternatively they may also be secured (i) in part by cash together with a completed
residential Property or (ii) by a completed commercial Property, if in either case the Rating
Agencies have confirmed that the inclusion of any such Loan would not have an adverse effect
on the ratings of the Covered Bonds;
are assets in respect of which the grantor of any Mortgage or Pre-Notation has a good and
marketable title to the relevant Property;
are assets in respect of which as at the origination date no further registrations were required to
perfect or create the Mortgage or Pre-Notation or any other Related Security granted in respect of
each Loan;
are assets in respect of which the Issuer is the registered holder or beneficiary of the Mortgage or
Pre-Notation;
(xvi) have an Outstanding Principal Balance, which does not exceed €1,000,000;
(xvii)
(xviii)
(xix)
(xx)
(xxi)
(xxii)
(xxiii)
are assets which, if they have an Outstanding Principal Balance in excess of EUR 750,000, do
not exceed 2 per cent. of the Cover Pool when aggregated with other such assets;
have a loan to value ratio which is less than or equal to 100 per cent. unless the Rating Agencies
have confirmed that the inclusion of any such Loan would not have an adverse effect on the
ratings of the Covered Bonds;
are assets in respect of which the Issuer has not received notice of early repayment;
are assets in respect of which a Registration Statement has been filed;
are assets in respect of which, to the extent they constitute a New Asset Type, Fitch have
confirmed that the inclusion of such New Asset Type in the Cover Pool will not have an adverse
effect on the Ratings of the Covered Bonds then outstanding and Moody's have been notified of
the inclusion of such New Asset Type;
are assets in respect of each of which the Issuer has properly recalculated interest and/or has
charged interest that is due under the associated Loan in accordance with Article 30 of law
2789/00 of the Hellenic Republic, as amended by Article 42 of law 2912/01 of the Hellenic
Republic (and the laws for stay of enforcement under Article 30 of law 2789/00 of the Hellenic
Republic, as amended by Article 47 of law 2873/00 of the Hellenic Republic and law 2912/01 of
the Hellenic Republic, no longer apply thereto) and Article 39 of law 3259/04 of the Hellenic
Republic and no Borrower has requested a recalculation thereof; and
are assets which may be Remortgaged Loans.
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"Collections" means all amounts received in respect of Receivables excluding the levy pursuant to Greek
Law 128/1975.
"Defaulted Loan Asset" means any Loan Asset with respect to which, in accordance with the Operating
Procedures, the Servicer has determined that the Receivables due under such Loan Asset are no longer
collectable or a Loan which is 90 days or more in arrears.
"Enforcement Procedures" means the exercise, in accordance with the procedures described in the
Operating Procedures, of rights and remedies against a Borrower in respect of such Borrower's
obligations arising from any Loan Asset in respect of which such Borrower is in default.
"Loan Asset Agreement" means any agreement in relation to a Loan Asset between the Issuer (as lender)
and a Borrower or Borrowers (as borrower(s) or guarantor(s)).
"Loan in Arrears" means in respect of a Loan Asset, that (a) one or more monthly payments have
become due and payable by the Borrower in accordance with the terms and conditions of the relevant
Loan Asset, or (b) an amount is due and payable by the Borrower for more than 30 days in accordance
with the terms and conditions of the relevant Loan Asset, provided that such amount due and payable is
greater than 10% of the monthly payment.
"Loss" means, in relation to any Loan Asset on any day, the amount (if any) determined in good faith by
the Servicer on such day as being the amount due in respect of such Loan Asset after the Servicer has
completed the Enforcement Procedures in relation to such Loan Asset in accordance with Paragraph 30.1
(Servicer to comply with Operating Procedures) of Schedule 1 of the Servicing Deed
"New Asset Type" means a new type of mortgage loan originated by the Issuer, which the Issuer intends
to assign to the Cover Pool as an Additional Cover Pool Asset, the terms and conditions of which are
materially different from any of the Cover Pool Assets already in the Cover Pool. For the avoidance of
doubt, a mortgage loan will not constitute a New Asset Type if it differs from any of the Cover Pool
Assets already in the Cover Pool solely due to it having different interest rates and/or interest periods
and/or time periods for which it is subject to a fixed rate, capped rate or any other interest rate or the
benefit of any discounts, cash-backs and/or rate guarantees.
"Operating Procedures" means the operating procedures set out in Schedule 9 (Operating Procedures for
Mortgage Loans) to the Servicing Deed (as amended, varied or supplemented from time to time in
accordance with the Servicing Deed).
"Receivables" means, on any day, all payments (whether or not yet due) which remain to be paid by the
relevant Borrower under a Loan Asset Agreement but excluding all Recoveries.
"Recoveries" means, on any date, an amount received in respect of a Loan Asset, after a Loss has been
determined in respect of such Loan Asset.
"Remortgaged Loans" means loans originated by banks in Greece (other than the Issuer) which have
been refinanced by new Loans from the Issuer provided that each such loan:
(i)
(ii)
(iii)
was performing at the date of refinancing;
had not been in arrears during the six months' period prior to the date of refinancing; and
had not been more than two months in arrears during the twelve months' period prior to the date
of refinancing.
Eligible Loan Asset Agreements
Each Loan Asset Agreement was, as at its execution date, an Eligible Loan Asset Agreement:
(i)
(ii)
which is entered into in the ordinary course of the Issuer's business on arms' length commercial
terms;
which the Issuer had at the date of execution the requisite power to enter into on the terms on
which it was made;
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(iii)
in respect of which all acts, conditions and things required to be done, fulfilled and performed in
order:
(a)
(b)
(c)
to enable the Issuer lawfully to enter into, exercise its rights under and perform and
comply with the obligations expressed to be assumed by it in such Loan Asset
Agreement;
to ensure that the obligations expressed to be assumed by it in the Loan Asset Agreement
are legal, valid, binding and enforceable on the Issuer; and
to make the Loan Asset Agreement admissible in evidence in the Hellenic Republic,
have been done, fulfilled and performed and are in full force and effect or, as the case may be,
have been effected and no steps have been taken to challenge, revoke or cancel any such
authorisation obtained or effected;
(iv)
(v)
(vi)
which has been duly executed by the relevant Borrower or Borrowers and constitutes legal, valid,
binding and enforceable obligations of the relevant Borrower or Borrowers;
which has been duly executed by the Issuer and constitutes legal, valid, binding and enforceable
obligations of the Issuer;
the execution and performance of which does not cause the Issuer to be in conflict with or
constitute a breach or infringement of any of the terms of, or constitute a default by the Issuer
under:
(a)
(b)
(c)
the Issuer's constitutional documents;
any Requirement of Law or any Regulatory Direction; or
any agreement, indenture, contract, mortgage, deed or other instrument to which it is a
party or which is binding on it or any of its assets;
(vii)
(viii)
(ix)
(x)
(xi)
(xii)
(xiii)
(xiv)
which is governed by and subject to the law of the Hellenic Republic;
in respect of the execution and performance of which the Issuer does not require the consent of
any other party or the consent, license, approval or authorisation of any Governmental Authority;
which does not contain any restriction on assignment of the benefit of the relevant Loan Asset
Agreement or, where consent to assign is required, such consent has been obtained;
which, other than in respect of the Registration Statement, under the laws of the Hellenic
Republic, does not have to be filed, recorded or enrolled with any court or other authority in the
Hellenic Republic and on or in relation to which no stamp, registration or similar tax is required
to be paid;
in respect of which at least one payment of Receivables due thereunder has been made prior to it
being included in the Cover Pool;
which provides for the payment of the Receivables due thereunder monthly or quarterly in arrear;
which provides for all advances and repayments under such Loan Asset Agreement to be
denominated in Euro, unless the Rating Agencies have confirmed that the inclusion of any such
Loan would not have an adverse effect on the ratings of the Covered Bonds;
which is:
(a)
entered into in writing on the terms of the Issuer's standard documentation and in respect
of which nothing is done at the time of execution of such Loan Asset Agreement or
subsequently that would constitute a Product Switch unless, following such Product
Switch, the relevant Loan Asset continues to satisfy the Eligibility Criteria; or
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(b)
in respect of a New Asset Type, entered into in writing on the terms of the Issuer's
standard documentation and Fitch have confirmed that the standard documentation for
such New Asset Type will not have an adverse effect on the Ratings of the Covered
Bonds then outstanding and Moody's have been notified of such standard documentation;
(xv)
(xvi)
(xvii)
(xviii)
(xix)
in respect of which, the Issuer has not acquiesced in any breach;
which does not contain provisions whereunder the Borrower or Borrowers may request or require
any variation to the terms of such Loan Asset Agreement;
which does not contain provisions which may give rise to a liability on the part of the Issuer to
make further advances, pay money or perform any other onerous act;
which is entered into in compliance with the Lending Criteria; and
in respect of which the filing of a Registration Statement does not constitute a breach of terms
thereof.
"Product Switch" means any variation of the financial terms and conditions of a Loan other than:
(a)
(b)
(c)
(d)
(e)
(f)
a change which was previously agreed with the Borrower at the time of the origination of the
Loan (for example, the Issuer and the Borrower may have agreed at the time of origination of a
Loan that a fixed rate mortgage loan may become a standard variable rate mortgage loan at a
specified time in the future);
a release of a party to a Loan or a release of part of the land subject to the Mortgage;
any variation agreed with a Borrower to control or manage arrears on a Loan;
any variation which extends the maturity date of the Loan;
any variation imposed by statute; and
any variation of interest rate on a Loan agreed with a Borrower.
Eligible Borrowers
Each Borrower in respect of each Loan Asset Agreement to which it is a party is an Eligible Borrower
who:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
is a party to a Loan Asset Agreement as primary borrower or guarantor;
is a natural person and not a corporate or legal entity;
has full legal capacity under the laws of the Hellenic Republic;
as far as the Issuer is aware, is not dead or untraceable;
is not subject to a bankruptcy event or a redundancy event;
is tax resident in the Hellenic Republic;
is resident at the address set out in the relevant Loan Asset Agreement and that address is in the
Hellenic Republic;
is not an employee of the Issuer unless the Rating Agencies have confirmed that the inclusion of
any such Loan would not have an adverse effect on the ratings of the Covered Bonds; and
met the Lending Criteria for new business in force at the time such Borrower entered into the
Loan Asset Agreement.
"Borrower" means a borrower or a guarantor under a Loan Asset Agreement.
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Sale of Selected Loans and their Related Security following an Issuer Event
Following the occurrence of an Issuer Event which is continuing, the Issuer will be obliged to sell Loan
Assets in the Cover Pool having the Required Outstanding Principal Balance (the "Selected Loans") to
any third party buyer(s) identified by Servicer (if it is not the same entity as the Issuer) or the Property
Consultant appointed by the Trustee, in accordance with the Servicing Deed, subject to the Issuer having
a right of pre-emption to remove the Selected Loans from the Cover Pool.
Prior to the Issuer being obliged to sell the Selected Loans and their Related Security to any third party
buyer(s) identified by the Servicer (if it is not the same entity as the Issuer) or the Property Consultant,
the Servicer (if it is not the same entity as the Issuer) or the Trustee will serve on the Issuer (or, if the
Issuer so decides, Marfin Popular Bank p.c.l.) a notice in the form set out in the Servicing Deed (a
"Selected Loan Offer Notice") giving the Issuer the right to prevent the sale by removing the Selected
Loans from the Cover Pool and transferring an amount equal to the greater of (i) the market value of all
such Loan Asset(s) determined as the highest bid (if any) obtained by the Servicer (if it is not the same
entity as the Issuer) or the Property Consultant (acting in good faith) from a third party for such Loan
Asset(s), and (ii) the then Outstanding Principal Balance plus accrued interest and any Arrears of Interest
on all such Loan Assets(s), to the Transaction Account within 10 Athens Business Days of receipt of such
notice (the "Offer Period").
If the Issuer validly accepts the Servicer's (if it is not the same entity as the Issuer) or the Trustee's offer to
remove the Selected Loans from the Cover Pool and deposits an amount equal to the price set forth in the
Selected Loan Offer Notice into the Transaction Account, the Issuer will, within the Offer Period, serve a
notice (including a certification that no Issuer Insolvency Event has occurred) on the Servicer (if it is not
the same entity as the Issuer) or the Trustee in the form set out in the Servicing Deed (a "Selected Loan
Removal Notice") and will remove from the Cover Pool the relevant Selected Loans (and any other Loan
secured or intended to be secured by that Related Security or any part of it) referred to in the relevant
Selected Loan Removal Notice. Completion of the removal of the Selected Loans by the Issuer will take
place on the later of the date when the Issuer deposits the relevant amount in the Transaction Account and
the date when it provides the Servicer (if it is not the same entity as the Issuer) or the Trustee with a
Selected Loan Removal Notice provided that such is within the Offer Period.
If the Issuer rejects the Servicer's (if it is not the same entity as the Issuer) or the Trustee's offer or fails to
accept it in accordance with the foregoing, the Issuer will endeavour to sell the Selected Loans as set out
below.
"Arrears of Interest" means, in relation to a Loan as at any date, the aggregate of all interest and
expenses which are due and payable and unpaid on that date;
"Capitalised Arrears" means the amount of any Arrears of Interest in respect of which:
(a)
(b)
the Servicer has, by arrangement with the relevant Borrower, agreed to capitalise; and
have been capitalised and added, in the relevant accounts of the Issuer, to the principal amount
outstanding in respect of such Loan;
"Capitalised Expenses" means, in relation to a Loan, the amount of any expense, charge, fee, premium
or payment (excluding, however, any Arrears of Interest) capitalised and added to the principal amount
outstanding in respect of such Loan in accordance with the relevant Loan Asset Agreement;
"Initial Advance" means the initial amount of the Loan advanced to the Borrower; and
"Outstanding Principal Balance" means in relation to a Loan at any given date, the aggregate (without
double counting) of:
(a)
(b)
(c)
the Initial Advance;
Capitalised Expenses; and
Capitalised Arrears,
less any prepayment, repayment or payment of any of the foregoing made on or prior to such date.
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"Property Consultant" means an independent investment or commercial bank of international repute or
a portfolio manager appointed to perform the tasks in connection with any disposal of the Loan Assets in
accordance with the terms of the Servicing Deed.
Method of Sale of Selected Loans
If following an Issuer Event which is continuing the Issuer is obliged to sell the Selected Loans to any
third party buyer(s) identified by the Servicer (if it is not the same entity as the Issuer) or the Property
Consultant, any Selected Loans must:
(a)
(b)
have been selected from the Cover Pool on a random basis by the Servicer (if it is not the same
entity as the Issuer) or, otherwise, the Property Consultant; and
have an aggregate Outstanding Principal Balance (the "Required Outstanding Principal
Balance Amount") as close as possible to the amount calculated as follows:
Nx
Outstanding Principal Balance of all Loans in the Cover Pool
the Euro Equivalent of the Required Redemption Amount in respect of each Series of
Covered Bonds then Outstanding
where "N" is an amount equal to the Euro Equivalent of the Required Redemption Amount of the
Earliest Maturing Covered Bonds less amounts standing to the credit of the Revenue Ledger of
the Transaction Account and the principal amount of any Marketable Assets or Authorised
Investments (excluding all amounts to be applied on the next Programme Payment Date to repay
higher ranking amounts in the Programme Payment Date Payments Priorities), provided that N
cannot be less than zero.
For the purposes hereof:
"Earliest Maturing Covered Bonds" means, at any time, the Series of Covered Bonds (other
than any Series which is fully collateralised by amounts standing to the credit of the Transaction
Account) having the earliest Final Maturity Date (in respect of Series to which an Extended Final
Maturity Date does not apply), or Extended Final Maturity Date, as specified in the applicable
Final Terms.
"Euro Equivalent" means, in relation to a Series of Covered Bonds which is denominated in (a)
a currency other than Euro, the Euro equivalent of such amount ascertained using the relevant
Swap Rate relating to such Series of Covered Bonds and (b) Euro, such amount.
"Required Redemption Amount" means, in respect of a Series of Covered Bonds, the Euro
Equivalent of the amount calculated as follows:
the Principal Amount Outstanding of the
relevant Series of Covered Bonds
x
1+ Negative Carry Factor x (days to maturity of
the relevant Series of Covered Bonds/365)
"Negative Carry Factor" means a percentage calculated by reference to the weighted average
margin of the Covered Bonds and will, in any event, not be less than 0.90 per cent.
The Selected Loans will be offered for sale at the best price reasonably available but in any event for an
amount not less than the Adjusted Required Redemption Amount.
The "Adjusted Required Redemption Amount" means the Required Redemption Amount:
(i)
(ii)
less (in the case of amounts payable to the Issuer) or plus (in the case of amounts payable by the
Issuer), any swap termination amounts payable to or by the Issuer under a Hedging Agreement in
respect of the relevant Series of Covered Bonds; less
amounts standing to the credit of the Revenue Ledger and the principal balance of any
Marketable Assets and Authorised Investments (excluding all amounts to be applied on any
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Programme Payment Date prior to the Final Maturity Date or Extended Final Maturity Date, as
applicable, of the Earliest Maturing Covered Bonds, to pay higher ranking amounts in the
Programme Payment Date Payments Priorities).
If the Selected Loans have not been sold (in whole or in part) in an amount equal to the Adjusted
Required Redemption Amount by the date which is six months prior to the Final Maturity Date of the
Earliest Maturing Covered Bonds if they are not subject to an Extended Final Maturity Date or the
otherwise Extended Final Maturity Date thereof, the Issuer will offer the Selected Loans for sale to any
third party buyer(s) identified by the Servicer (if it is not the same entity as the Issuer) or the Property
Consultant for the best price reasonably available notwithstanding that such amount may be less than the
Adjusted Required Redemption Amount.
The Issuer will enter into a sale and purchase agreement with the relevant purchasers of the Selected
Loans which will require, inter alia, a cash payment from the relevant purchasers. Any such sale will not
include any representations and warranties from the Issuer in respect of the Loans and their Related
Security unless expressly agreed by the Issuer. The proceeds of sale will be credited to the Transaction
Account.
In addition to offering Selected Loans for sale to third parties in respect of the Earliest Maturing Covered
Bonds, subject to the rights of pre-emption enjoyed by the Issuer, in respect of other Series of Covered
Bonds the Trustee or the Servicer (if it is not the same entity as the Issuer) may instruct the Issuer to sell
Selected Loans and their Related Security having the Required Outstanding Principal Balance to any third
party buyer(s) identified by the Servicer (if it is not the same entity as the Issuer) or the Property
Consultant, in accordance with the provisions summarised above.
Law and Jurisdiction
The Servicing Deed will be governed by English law.
Asset Monitor Agreement
The Asset Monitor has agreed pursuant to the Asset Monitor Agreement, subject to due receipt of the
information to be provided by the Servicer, to conduct tests in respect of the arithmetical accuracy of the
calculations performed by the Servicer, prior to the service of a Notice of Default, the occurrence of an
Issuer Event which is continuing or the long-term unsecured, unguaranteed and unsubordinated debt
obligation ratings of the Issuer falling below BBB- in the case of Fitch or Baa3 in the case of Moody's (an
"Issuer Downgrade"), on each Calculation Date with a view to confirming the accuracy or otherwise of
such calculations. If an Issuer Event or an Issuer Downgrade occurs either of which is continuing, the
Asset Monitor shall, subject to due receipt of the information to be provided by the Servicer, conduct the
tests of the Servicer's calculations in respect of each Calculation Date and the fifth Athens Business Day
of each month (other than any month in which a Calculation Date falls) unless and until the Issuer Event
or Issuer Downgrade is no longer continuing.
If any tests conducted by the Asset Monitor reveal errors in the relevant calculations performed by the
Servicer such that:
(i)
(ii)
the Statutory Tests have been failed on the relevant Calculation Date whereas the Servicer had
recorded them as being satisfied; or
the reported nominal value of the Cover Pool or the net present value or the reported amount of
interest for the next 12 months expected to be received in respect of the Loans comprised in the
Cover Pool, as applicable, was mis-stated by the Servicer by an amount exceeding one per cent.
(as at the Calculation Date of the relevant Statutory Test),
the Asset Monitor shall then test the Servicer's calculations in respect of the four consecutive months
immediately following such tests.
The Asset Monitor will deliver a report to the Servicer, the Issuer, the Trustee, each Dealer and the Rating
Agencies setting out the results of the tests performed by the Asset Monitor.
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On each Programme Payment Date, the Issuer will pay to the Asset Monitor a fee for the tests performed
by the Asset Monitor since the preceding Programme Payment Date.
The Servicer may, at any time, but subject to the prior written consent of the Trustee, terminate the
appointment of the Asset Monitor by giving at least 30 days' prior written notice to the Asset Monitor,
provided that such termination may not be effected unless and until a replacement asset monitor approved
by the Trustee has been found by the Servicer (such approval to be unnecessary if the replacement is an
accountancy firm (not being the auditors of the Issuer) of international standing or if this is not reasonably
possible a reputable firm of national standing as certified in good faith by the Servicer to the Trustee)
which agrees to perform the duties of the Asset Monitor set out in the Asset Monitor Agreement (or
substantially similar duties).
The Asset Monitor may, at any time, resign by giving at least 30 days' prior written notice to the Issuer,
the Servicer and the Trustee, and may resign by giving immediate notice in the event of a professional
conflict of interest caused by the action of any recipient of its reports in each case subject to the
appointment of a replacement asset monitor.
Transaction Account Agreement
On or about the Closing Date, the Issuer, the Trustee, the Transaction Account Bank and the Servicer will
enter into the Transaction Account Agreement pursuant to which the Transaction Account Bank will
agree to open and maintain the Transaction Account which is to be held in the name of the Issuer and
provide the Issuer with certain services in connection with account handling and reporting requirements
in relation to the monies from time to time standing to the credit of the Transaction Account. The
Transaction Account Bank will pay interest on the amounts standing to the credit of the Transaction
Account.
The Transaction Account Bank will, subject to the terms of the Transaction Account Agreement, agree to
comply with any directions given by the Servicer in relation to the management of the Transaction
Account. The Transaction Account Bank will receive a fee payable by the Issuer.
In the event that the Transaction Account Bank no longer satisfies the Minimum Short-term Rating, the
Issuer will either (i) terminate the appointment of the Transaction Account Bank and use all reasonable
endeavours, within 30 days of the downgrade, to procure the appointment of a replacement transaction
account bank acceptable to the Trustee and satisfying the Minimum Short-term Rating or (ii) the
provision of an unlimited and unconditional guarantee of the performance of the Transaction Account
Bank's obligations under the Transaction Account Agreement from a guarantor that satisfies the
Minimum Short-term Rating (or a replacement guarantor if the prior guarantor fails to satisfy the
Minimum Short-term Rating) and in respect of which Rating Agency Confirmation has been received by
the Issuer and the Trustee, or, if (i) or (ii) are not possible, the Issuer shall use all reasonable endeavours,
within 60 days of the downgrade, to deposit cash collateral with a financial institution with the Minimum
Short-term Rating in an amount sufficient to satisfy the credit enhancement requirements of the Rating
Agencies in order to maintain the rating of the Covered Bonds by the Rating Agencies, and the Issuer will
notify the Rating Agencies of such actions as it takes in respect of appointing a replacement transaction
account bank or procuring a guarantee.
"Minimum Short-Term Rating" means, in respect of any person, such person's short-term unsecured,
unsubordinated, unguaranteed debt obligations being rated, in the case of Fitch, "F1"; and, in the case of
Moody's, "P-1".
The Transaction Account Agreement will be governed by and construed in accordance with English law.
The courts of England will have exclusive jurisdiction to hear and determine any disputes that may arise
in connection therewith.
Security Deed
As continuing security for the payment or discharge of the Secured Amounts, and subject always to the
right of redemption of the Issuer, the Issuer will, with full title guarantee, create in favour of the Trustee,
for itself and on trust for the Secured Creditors, in accordance with the terms of the Security Deed:
(a)
(to the extent not subject to the Statutory Pledge) a first fixed charge over the benefit of each
Authorised Investment and each Marketable Asset (which may take effect as a floating charge);
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(b)
(c)
a first fixed charge over the benefit of the Transaction Account to the extent such account is
maintained in England (which may take effect as a floating charge); and
an assignment by way of security of the benefit of each Transaction Document (other than the
Trust Deed and the Security Deed (the "Trust Documents") and the Dealer Agreement).
The Security Deed will be governed by and construed in accordance with the laws of England. The courts
of England will have exclusive jurisdiction to hear any disputes that may arise in connection therewith.
Trust Deed
The Covered Bonds are constituted by the Trust Deed. The Conditions and the forms of the Covered
Bonds are set out in the Trust Deed. The Trustee shall act as trustee for the Covered Bondholders.
In accordance with the terms of the Trust Deed, the Issuer will pay a fee to the Trustee for its services
under the Trust Deed at the rate and times agreed between the Issuer and the Trustee together with
payment of any liabilities incurred by the Trustee in relation to the Trustee's performance of its
obligations under the Trust Deed.
The Trustee from time to time may retire at any time upon giving not less than three calendar months'
notice in writing to the Issuer without assigning any reason therefor and without being responsible for any
Liabilities occasioned by such retirement. The retirement of the Trustee shall not become effective unless
there remains a trustee in office after such retirement. The Issuer will agree in the Trust Deed that, in the
event of the sole trustee or the only trustee under the Trust Deed giving notice of its retirement, it shall
use its best endeavours to procure a new trustee, being a trust corporation, to be appointed. If the Issuer
has not procured the appointment of a new trustee prior to the expiry of the Trustee's notice of retirement,
the Trustee is entitled to procure forthwith a new trustee, being a trust corporation.
The Trust Deed will be governed by and construed in accordance with the laws of England. The courts of
England will have exclusive jurisdiction to hear any disputes that may arise in connection therewith.
Credit Facility Agreement
The Issuer, the Trustee and the Credit Facility Provider will enter into a 364 day credit facility agreement
dated on or about the Programme Closing Date, which can be extended at the option of the Issuer.
Pursuant to the Credit Facility Agreement, the Credit Facility Provider will make available to the Servicer
a revolving credit facility in an amount equal to the Commitment Amount which can be drawn on by the
Servicer to pay amounts due to (or to be provisioned for) the Secured Creditors (including the Covered
Bondholders) on any Programme Payment Date or for the purpose of satisfying the Statutory Tests or to
maintain the initial ratings of any Series of the Covered Bonds or to be utilised by the Trustee following
the delivery of a Notice of Default.
The Issuer's rights under the Credit Facility Agreement will be assigned to the Trustee on behalf of the
Secured Creditors pursuant to the Security Deed. Upon the delivery of a Notice of Default in respect of
the Issuer, the Trustee may draw down the Credit Facility up to the full amount available (which shall be
credited to the Transaction Account but be unavailable to be drawn by the Issuer) and apply it towards
payment of amounts due to the Secured Creditors (including the Covered Bondholders). If upon the
delivery of a Notice of Default in respect of the Issuer the credit facility is so drawn and the proceeds
thereof credited to the Transaction Account, the Credit Facility Provider will have 10 Business Days
following written notification to it by the Trustee of such event (the "Election Period") to notify the
Trustee in writing that it elects to have all the Cover Pool Assets constituting the Cover Pool transferred
to it as a full repayment and discharge of all amounts drawn under the Facilities. During the Election
Period no Loan Assets in the Cover Pool may be disposed of unless the Credit Facility Provider has
notified the Trustee in writing that it does not intend to exercise such right of election or otherwise
consents in writing to such disposal.
The Cover Pool Assets will only be transferred to the Credit Facility Provider once the Trustee has
confirmed that it is satisfied that all the Secured Amounts (other than any amounts due to the Credit
Facility Provider) and/or all other moneys and other liabilities due or owing by the Issuer in relation to the
Programme have been paid or discharged in full. In which case the transfer of the Cover Pool Assets to
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the Credit Facility Provider will constitute a full repayment and discharge of all amounts drawn under the
Facilities.
If:
(i)
(ii)
both (A) the Credit Facility Provider does not have a credit rating from all of the Rating Agencies
which is equal to or better than the Minimum Short-term Rating and (B) the Credit Facility
Provider's capital adequacy ratio is below that required by the Bank of Greece; or
the Credit Facility Agreement is scheduled to terminate within 10 Business Days,
and the Issuer has not entered into a replacement credit facility agreement or renewed the existing Credit
Facility Agreement (as applicable) in accordance with the terms of the Credit Facility Agreement, the
Credit Facility Provider will advance funds (a "Facility Special Drawing") to the Borrower (or the
Servicer or Trustee on its behalf as applicable). The amount of any Facility Special Drawing shall be
equal to the lower of:
(a)
(b)
the amount then available under the Credit Facility Agreement; and
the amount necessary to maintain the ratings of any outstanding Series of Covered Bonds.
The Credit Facility Agreement will be governed by and construed in accordance with the laws of
England. The courts of England will have exclusive jurisdiction to hear any disputes that may arise in
connection therewith.
Interest Rate Swap Agreements
Some of the Loan Assets in the Cover Pool from time to time will pay a variable interest rate for a period
of time that may either be linked to the standard variable rate of the Issuer (the "Issuer Standard
Variable Rate" or linked to an interest rate other than the Issuer Standard Variable Rate, such as
EURIBOR. Other Loan Assets will pay a fixed interest rate for a period of time. However, the payments
to be made by the Issuer under each of the Covered Bond Swap Agreements may be based on EURIBOR
for one-month Euro deposits. To provide a hedge against the possible variance between:
(a)
(b)
the rates of interest payable on the Loan Assets in the Cover Pool; and
the payments to be made by the Issuer under the Covered Bonds or the Covered Bond Swap
Agreements,
the Issuer and a provider of the interest rate swap (the "Interest Rate Swap Provider") may enter into an
Interest Rate Swap Agreement in respect of each Series of Covered Bonds.
The Interest Rate Swap Agreement entered into in relation to the Series 2008-1 Covered Bonds will not
provide a hedge against Loan Assets in the Cover Pool which pay an interest rate linked to the ECB base
rate. This may also be the case with other Series of Covered Bonds issued in the future.
Covered Bond Swap Agreements
The Issuer may enter into one or more Covered Bond Swap Agreements with one or more covered bond
swap providers (the "Covered Bond Swap Providers"). Each Covered Bond Swap Agreement may be
either a Forward Starting Covered Bond Swap or a Non-Forward Starting Covered Bond Swap (together
the "Covered Bond Swap Agreements").
Each Forward Starting Covered Bond Swap will provide a hedge (after the occurrence of an Issuer Event
which is continuing) against certain interest rate, currency and/or other risks in respect of amounts
received by the Issuer under the Loans and the Interest Rate Swap Agreements (if any) and amounts
payable by the Issuer under the Covered Bonds (a "Forward Starting Covered Bond Swap").
Each Non Forward Starting Covered Bond Swap will provide a hedge against certain interest rate,
currency and/or other risks in respect of amounts received by the Issuer under the Loans and the Interest
Rate Swap Agreements (if any) and amounts payable by the Issuer under the Covered Bonds (a "Non-
Forward Starting Covered Bond Swap").
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Where required to hedge such risks, there will be one (or more) Covered Bond Swap Agreement(s) in
relation to each Series or Tranche, as applicable, of Covered Bonds.
Under the Forward Starting Covered Bond Swaps, the Covered Bond Swap Provider will pay to the
Issuer on each Interest Payment Date, after the occurrence of an Issuer Event, an amount equal to the
relevant portion of the amounts that would be payable by the Issuer in respect of interest and principal
payable under the relevant Series or Tranche of Covered Bonds. In return, the Issuer will periodically pay
to the Covered Bond Swap Provider an amount in Euro calculated by reference to EURIBOR plus a
spread and where relevant the Euro Equivalent of the relevant portion of any principal due to be repaid in
respect of the relevant Series or Tranche of Covered Bonds.
Under the Non Forward Starting Covered Bond Swaps on the relevant Issue Date, the Issuer will (in
respect of a Series or Tranche denominated in a currency other than euro) pay to the Covered Bond Swap
Provider an amount equal to the relevant portion of the amount received by the Issuer in respect of the
aggregate nominal amount of such Series or Tranche, as applicable, of Covered Bonds and in return the
Covered Bond Swap Provider will pay to the Issuer the Euro Equivalent of the first mentioned amount.
Thereafter, the Covered Bond Swap Provider will pay to the Issuer on each Interest Payment Date an
amount equal to the relevant portion of the amounts that are payable by the Issuer in respect of interest
and principal under the relevant Series or Tranche of Covered Bonds. In return, the Issuer will
periodically pay to the Covered Bond Swap Provider an amount in Euros calculated by reference to
EURIBOR plus a spread and where relevant the Euro Equivalent of the relevant portion of any principal
due to be repaid in respect of the relevant Series or Tranche of Covered Bonds.
Common Terms of Hedging Agreements
Early Termination
Each Hedging Agreement may be terminated early by the non-defaulting or non-affected party or either
party, as applicable, including upon but not limited to the occurrence of certain events with respect to
either party to the relevant Hedging Agreement, including insolvency, failure by either party to make
payment when due (subject to cure periods and deferral) or changes in law resulting in illegality.
In the event that the Covered Bonds are redeemed and/or cancelled in accordance with the Terms and
Conditions, the Covered Bond Swap Agreement(s) in connection with such Covered Bonds will terminate
or partially terminate, as the case may be. Any breakage costs payable by or to the Issuer in connection
with such termination will be taken into account in calculating:
(a)
(b)
the Programme Payment Date for the sale of Selected Loans; and
the purchase price to be paid for any Covered Bonds purchased by the Issuer in accordance with
Condition 8.8 (Purchases).
In the event that any Loan Assets in the Cover Pool are sold, the Interest Rate Swap Agreement(s) in
connection with such Loan Assets will terminate or partially terminate, as the case may be.
Upon the termination of an Interest Rate Swap Agreement, the Hedging Counterparty or the Issuer may
be liable to make a termination payment to the other in accordance with the provisions of the Interest Rate
Swap Agreement.
Hedging Counterparty: Downgrade Event
If the ratings of the Hedging Counterparty fall below the relevant ratings specified (in accordance with
the requirements of the Rating Agencies) in the Hedging Agreements, at any time, then the Hedging
Counterparty will be required within the time period specified in the relevant Hedging Agreement to take
certain remedial measures as set out in the Hedging Agreements which include:
(i)
(ii)
where permitted, the posting of collateral in an amount or value determined in accordance with
the relevant swap collateral guidelines specified in the Hedging Agreements;
the provision of a guarantee of a third party or procurement of a co-obligor with the ratings
specified in the relevant Hedging Agreement;
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(iii)
(iv)
the transfer of all its rights and obligations under the relevant Hedging Agreement to a
replacement third party (which may include any affiliate of the Hedging Counterparty) with the
ratings specified in the relevant Hedging Agreement; or
such other action as the Hedging Counterparty may agree with any relevant Rating Agency so as
to result in any Covered Bond then outstanding, following the taking of such other action, not
being rated lower than the rating of such Covered Bond immediately prior to the downgrade of
the Hedging Counterparty by such Rating Agency.
If the Hedging Counterparty fails to take one of the above-mentioned remedial measures within the time
prescribed, then the Issuer will, subject to certain conditions, be entitled to terminate the relevant Hedging
Agreement.
Collateral
In the event that the Hedging Counterparty posts collateral, that collateral will be credited to the relevant
Hedge Collateral Ledger. Collateral and income arising from such collateral will be applied solely in
returning collateral or paying income attributable to such collateral to the relevant Hedging Counterparty.
Any Excess Hedge Collateral will be paid directly to the relevant Hedging Counterparty and not in
accordance with the Payments Priorities.
"Excess Hedge Collateral" means an amount equal to the value of the collateral (or the applicable part of
any collateral) provided by any Hedging Counterparty to the Issuer in respect of the relevant Hedging
Counterparty's obligations to transfer collateral to the Issuer under the relevant Hedging Agreement (as a
result of the ratings downgrade provisions in that Hedging Agreement), which is in excess of that
Hedging Counterparty's liability to the Issuer under the relevant Hedging Agreement as at the date of
termination of the transaction under that Hedging Agreement, or which the relevant Hedging
Counterparty is otherwise entitled to have returned to it under the terms of the relevant Hedging
Agreement.
Withholding Tax
If withholding taxes are imposed on payments made by any Hedging Counterparty to the Issuer under a
Covered Bond Swap Agreement, the Hedging Counterparty shall always be obliged to gross up those
payments. If withholding taxes are imposed on payments made by the Issuer to the Hedging
Counterparty under a Covered Bond Swap Agreement, the Issuer shall not be obliged to gross up those
payments.
Transfer
The Hedging Counterparties may transfer all its interest and obligations in and under the relevant
Hedging Agreement to a transferee with the minimum ratings required by each of the Rating Agencies,
without any prior written consent of the Trustee, subject to certain conditions, including, in certain
circumstances, confirmation from the Rating Agencies that the then current ratings of the relevant Series
of the Covered Bonds will not be adversely affected.
Governing Law
The Hedging Agreements will be governed by and construed in accordance with the laws of England.
The courts of England will have exclusive jurisdiction to hear any disputes that may arise in connection
therewith.
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TAXATION
The following is a general description of certain tax considerations in Greece and the United Kingdom
relating to the Covered Bonds. It does not purport to be a complete analysis of all tax considerations
relating to the Covered Bonds, whether in those countries or elsewhere. Prospective purchasers of
Covered Bonds should consult their own tax advisers as to which countries' tax laws could be relevant to
acquiring, holding and disposing of Covered Bonds and receiving payments of interest, principal and/or
other amounts under the Covered Bonds and the consequences of such actions under the tax laws of those
countries. This summary is based upon the law as in effect on the date of this Base Prospectus and is
subject to any change in law that may take effect after such date.
Greek Taxation
Greece
Under Greek tax laws as of the date hereof, no Greek withholding tax shall be imposed in relation to
payments of principal or interest made to Covered Bondholders by a Paying Agent of the Issuer should
the holder of such Covered Bonds not be a tax resident of Greece.
Payments of interest in respect of the Covered Bonds to Covered Bondholders being tax residents of
Greece, whether individuals or legal entities, shall be subject to withholding tax at a tax rate of 10 per
cent. Individuals will have no further tax liability in respect of these payments whereas Greek Societes
Anonymes, Greek limited liability companies and Greek branches of foreign companies will have to
declare these payments in their annual tax return, offsetting tax withheld as above with the tax imposed
according to the applicable tax rate. Portfolio investment companies will benefit from a withholding tax
exemption provided they purchase the Covered Bonds at least 30 days prior to the interest payment date.
The applicable income tax rate is currently 25 per cent., for Greek Societes Anonymes and Greek Limited
Liability companies, this applies also to Greek branches of foreign companies.
Capital gains
Under art. 14 of law 3156/2003, applicable also to covered bonds, capital gains from the disposal of
Covered Bonds are exempt from capital gains tax. However, Greek Societes Anonymes, Greek Limited
Liability companies and Greek branches of foreign companies which hold Covered Bonds may be subject
to income tax on such capital gains if the same are distributed as profits or dividends.
Value Added Tax
No value added tax ("VAT") is payable upon disposal of the Covered Bonds (Article 22(1)(ka) of Law
No. 2859/2000).
Death Duties and Taxation on Gifts
Despite the broad wording of the tax exemption provided for in art. 14 of law 3156/2003, it is not certain
whether it covers Greek inheritance and gift tax.
Should the exemption of art. 14 of law 3156/2003 not apply, the Covered Bonds will be subject to Greek
inheritance tax if the deceased holder of Covered Bonds had been a resident of Greece or a Greek national
or if the Covered Bonds were physically located in Greece. However, if the Covered Bonds were located
abroad and the deceased Greek national holder of Covered Bonds had been residing abroad for at least 10
successive years prior to his/her death, the Covered Bonds shall be exempt from inheritance tax (See
Article 3(29) and (35) of Law No. 2961/2001). The rates of inheritance tax vary from 0.6 per cent., to 40
per cent., depending on the relationship between the inheritor and the deceased.
A gift of Covered Bonds is subject to Greek tax if the holder of the Covered Bonds (donor) is a Greek
national or if the recipient thereof is a Greek national or resident. The rate of gift tax is the same as the
rate for inheritance tax.
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Stamp Duties
Under art. 14 of Law 3156/2003, the issuance or transfer of Covered Bonds outside Greek territory is
exempt from Greek stamp duties.
EU Savings Tax Directive
Under EC Council Directive 2003/48/EC on the taxation of savings income, each Member State is
required, from 1 July 2005, to provide to the tax authorities of another Member State details of payments
of interest or other similar income paid by a person within its jurisdiction to, or collected by such a person
for, an individual resident in that other Member State; however, for a transitional period, Austria,
Belgium and Luxembourg may instead apply a withholding system in relation to such payments,
deducting tax at rates rising over time to 35%. The transitional period is to terminate at the end of the
first full fiscal year following agreement by certain non-EU countries to the exchange of information
relating to such payments. This Directive has been implemented in Greece by Law 3312/2003
Also with effect from 1 July 2005, a number of non-EU countries, and certain dependent or associated
territories of certain Member States, have agreed to adopt similar measures (either provision of
information or transitional withholding) in relation to payments made by a person within its jurisdiction
to, or collected by such a person for, an individual resident in a Member State. In addition, the Member
States have entered into provision of information or transitional withholding arrangements with certain of
those dependent or associated territories in relation to payments made by a person in a Member State to,
or collected by such a person for, an individual resident in one of those territories.
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SUBSCRIPTION AND SALE
Covered Bonds may be issued from time to time by the Issuer to any one or more of the Dealers. The
arrangements under which Covered Bonds may from time to time be agreed to be issued by the Issuer to,
and subscribed by, Dealers are set out in the Dealer Agreement. Any such agreement will, inter alia,
make provision for the form and terms and conditions of the relevant Covered Bonds, the price at which
such Covered Bonds will be subscribed by the Dealers and the commissions or other agreed deductibles
(if any) payable or allowable by the Issuer in respect of such subscription. The Dealer Agreement makes
provision for the resignation or termination of appointment of existing Dealers and for the appointment
of additional or other Dealers either generally in respect of the Programme or in relation to a particular
Tranche of Covered Bonds.
United States
The Covered Bonds have not been and will not be registered under the Securities Act and may not be
offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in
certain transactions exempt from, or not subject to, the registration requirements of the Securities Act.
Terms used in this paragraph have the meanings given to them by Regulation S under the Securities Act.
The Covered Bonds in bearer form are subject to U.S. tax law requirements and may not be offered, sold
or delivered within the United States or its possessions or to U.S. persons, except in certain transactions
permitted by U.S. tax regulations. Terms used in this paragraph have the meanings given to them by the
United States Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder.
Each Dealer has represented and agreed, and each further Dealer appointed under the Programme will be
required to represent and agree that, except as permitted by the Dealer Agreement, it has not offered and
sold, and will not offer, sell or deliver Covered Bonds (i) as part of their distribution at any time and (ii)
otherwise until 40 days after the completion of the distribution, as determined and certified by the
relevant Dealer(s) (or, in the case of an issue of Covered Bonds on a syndicated basis, the relevant lead
manager, of all Covered Bonds of the Tranche of which such Covered Bonds are a part), within the
United States or to, or for the account or benefit of, U.S. persons. Each Dealer has further agreed and
each further Dealer appointed under the Programme will be required to agree that it will send to each
dealer to which it sells Covered Bonds of such Tranche during the distribution compliance period a
confirmation or other notice setting forth the restrictions on offers and sales of such Covered Bonds
within the United States or to, or for the account or benefit of, U.S. persons.
Until 40 days after the commencement of the offering of any Covered Bonds, an offer or sale of such
Covered Bonds within the United States by any dealer (whether or not participating in the offering of
such Covered Bonds) may violate the registration requirements of the Securities Act if such offer or sale
is made otherwise than in accordance with an applicable exemption from registration under the Securities
Act.
Each issuance of Index Linked Interest Covered Bonds or Dual Currency Covered Bonds shall be subject
to such additional U.S. selling restrictions as the Issuer and the relevant Dealer may agree as a term of the
issuance and purchase of such Covered Bonds, which additional selling restrictions shall be set out in the
applicable Final Terms.
Public Offer Selling Restrictions under the Prospectus Directive
In relation to each Member State of the European Economic Area which has implemented the Prospectus
Directive (each, a "Relevant Member State"), each Dealer has represented and agreed, and each further
Dealer appointed under the Programme will be required to represent, warrant and agree, that with effect
from and including the date on which the Prospectus Directive is implemented in that Relevant Member
State (the "Relevant Implementation Date") it has not made and will not make an offer of Covered
Bonds which are the subject of the offering contemplated by this Base Prospectus as completed by the
final terms in relation thereto to the public in that Relevant Member State except that it may, with effect
from and including the Relevant Implementation Date, make an offer of such Covered Bonds to the
public in that Relevant Member State:
(a)
if the Final Terms or any supplemental prospectus in relation to the Covered Bonds specify that
an offer of those Covered Bonds may be made other than pursuant to Article 3(2) of the
Prospectus Directive in that Relevant Member State (a "Non-exempt Offer"), following the date
- 162 -

of publication of a prospectus in relation to such Covered Bonds which has been approved by the
competent authority in that Relevant Member State or, where appropriate, approved in another
Relevant Member State and notified to the competent authority in that Relevant Member State,
provided that any such prospectus which is not a supplemental prospectus has subsequently been
completed by the Final Terms contemplating such Non-exempt Offer, in accordance with the
Prospectus Directive, in the period beginning and ending on the dates specified in such
prospectus or Final Terms, as applicable;
(b)
(c)
(d)
(e)
at any time to legal entities which are authorised or regulated to operate in the financial markets
or, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;
at any time to any legal entity which has two or more of (1) an average of at least 250 employees
during the last financial year; (2) a total balance sheet of more than €43,000,000; and (3) an
annual net turnover of more than €50,000,000, as shown in its last annual or consolidated
accounts;
at any time to fewer than 100 natural or legal persons (other than qualified investors as defined in
the Prospectus Directive) subject to obtaining the prior consent of the relevant Dealer or Dealers
nominated by the Issuer for any such offer; or
at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive,
provided that no such offer of Covered Bonds referred to in (b) to (e) above shall require the Issuer or any
Dealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a
prospectus pursuant to Article 16 of the Prospectus Directive.
For the purposes of this provision, the expression an "offer of Covered Bonds to the public" in relation
to any Covered Bonds in any Relevant Member State means the communication in any form and by any
means of sufficient information on the terms of the offer and the Covered Bonds to be offered so as to
enable an investor to decide to purchase or subscribe the Covered Bonds, as the same may be varied in
that Member State by any measure implementing the "Prospectus Directive" in that Member State and
the expression "Prospectus Directive" means Directive 2003/71/EC and includes any relevant
implementing measure in each Relevant Member State.
United Kingdom
Each Dealer has represented, warranted and agreed that:
(a) No deposit-taking: in relation to any Covered Bonds having a maturity of less than one year :
(i)
(ii)
it is a person whose ordinary activities involve it in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of its business; and:
it has not offered or sold and will not offer or sell any Covered Bonds other than to
persons:
(A)
(B)
whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses; or
who it is reasonable to expect will acquire, hold, manage or dispose of
investments (as principal or agent) for the purposes of their businesses,
where the issue of the Covered Bonds would otherwise constitute a contravention of Section 19
of the Financial Services and Markets Act 2000 (the "FSMA") by the Issuer;
(b)
Financial promotion: it has only communicated or caused to be communicated and will only
communicate or cause to be communicated any invitation or inducement to engage in investment
activity (within the meaning of section 21 of the FSMA) received by it in connection with the
issue or sale of any Covered Bonds in circumstances in which section 21(1) of the FSMA does
not apply to the Issuer; and
- 163 -

(c)
General compliance: it has complied and will comply with all applicable provisions of the
FSMA with respect to anything done by it in relation to any Covered Bonds in, from or otherwise
involving the United Kingdom.
The Hellenic Republic
The Covered Bonds have not been submitted to the approval procedure of the Hellenic Capital Market
Commission provided by Law 3401/2005 which implements the Prospectus Directive. Each Dealer has
represented and agreed and each further Dealer appointed under the Programme will be required to
represent and agree that it has not offered or sold and will not offer or sell the Covered Bonds by any
form of solicitation or advertising in the Hellenic Republic that would not fall under the exceptions of
article 3 of Law 3401/2005.
General
Each Dealer has represented, warranted and agreed that it has complied and will comply with all
applicable laws and regulations in each country or jurisdiction in or from which it purchases, offers, sells
or delivers Covered Bonds or possesses, distributes or publishes this Base Prospectus or any Final Terms
or any related offering material, in all cases at its own expense. Other persons into whose hands this Base
Prospectus or any Final Terms comes are required by the Issuer and the Dealers to comply with all
applicable laws and regulations in each country or jurisdiction in or from which they purchase, offer, sell
or deliver Covered Bonds or possess, distribute or publish this Base Prospectus or any Final Terms or any
related offering material, in all cases at their own expense.
The Dealer Agreement provides that the Dealers shall not be bound by any of the restrictions relating to
any specific jurisdiction (set out above) to the extent that such restrictions shall, as a result of change(s) or
change(s) in official interpretation, after the date hereof, of applicable laws and regulations, no longer be
applicable but without prejudice to the obligations of the Dealers described in the paragraph headed
"General" above.
Selling restrictions may be supplemented or modified with the agreement of the Issuer. Any such
supplement or modification may be set out in the relevant Final Terms (in the case of a supplement or
modification relevant only to a particular Tranche of Covered Bonds) or in a supplement to this Base
Prospectus.
- 164 -

GENERAL INFORMATION
1 Authorisations
The establishment of the Programme and the issuance of Covered Bonds have been duly
authorised by a resolution of the Board of Directors of the Issuer dated 29 October 2008.
2 Post issuance information
The Issuer will provide Investor Reports which will contain information regarding the Covered
Bonds and the Cover Pool Assets, including statistics relating to the financial performance of the
Cover Pool Assets. Such reports will be available to the prospective investors in the Covered
Bonds and to Covered Bondholders on Bloomberg and on the websites:
http://gctinvestorreporting.bnymellon.com/home.jsp
http://www.marfinbank.gr/MarfinEgnatia/HPEnDefault.aspx
3 Litigation
Save as disclosed in this Base Prospectus, there are no governmental, legal or arbitration
proceedings (including any such proceedings which are pending or threatened of which the Issuer
is aware), which may have, or have had, during the 12 months prior to the date of this Base
Prospectus a significant effect on the Issuer's financial position or profitability.
4 No significant or material change
There has been no material adverse change, or any development reasonably likely to involve
material adverse change, in the prospects or financial or trading position of the Issuer since 31
December 2007.
5 Documents available for inspection
For the period of 12 months following the date of this Base Prospectus, copies of the following
documents will be available for physical inspection from the registered office of the Issuer and
from the specified office, for the time being in London, of the Principal Paying Agent:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
the constitutional documents of the Issuer;
the auditors’ report and financial statements of the Issuer in respect of the financial year
ended 31 December 2007 (with an English translation thereof);
the auditors’ report and financial statements of Egnatia Bank A.E. in respect of the
financial year ended 31 December 2006 (with an English translation thereof);
the auditors’ report and financial statements of Laiki Bank (Hellas) S.A. in respect of the
financial year ended 31 December 2006 (with an English translation thereof) which are
also appended to the back of this Base Prospectus;
the auditors’ report and financial statements of Marfin Financial Group Holdings S.A.
(of which Marfin Bank S.A. was at such time a 100 per cent subsidiary) in respect of the
financial year ended 31 December 2006;
the Dealer Agreement;
the Servicing Deed;
the Trust Deed;
the Security Deed;
the Agency Agreement;
- 165 -

(k)
(l)
(m)
(n)
(o)
(p)
(q)
(r)
the Credit Facility Agreement;
the Asset Monitor Agreement;
the Transaction Account Agreement;
the Master Execution Deed;
the Closing Arrangements Deed;
Incorporated Terms Memorandum
a copy of this Base Prospectus; and
any future offering circulars, prospectuses, information memoranda and supplements
including Final Terms (save that a Final Terms relating to a Covered Bond which is
neither admitted to trading on a regulated market in the European Economic Area nor
offered in the European Economic Area in circumstances where a prospectus is required
to be published under the Prospectus Directive will only be available for inspection by a
holder of such Covered Bond and such holder must produce evidence satisfactory to the
Issuer and the Principal Paying Agent as to its holding of Covered Bonds and identity) to
this Base Prospectus and any other documents incorporated herein or therein by
reference.
6 Clearing Systems
The Covered Bonds have been accepted for clearance through Euroclear and Clearstream,
Luxembourg (which are the entities in charge of keeping the records). The appropriate Common
Code and ISIN for each Tranche of Covered Bonds allocated by Euroclear and Clearstream,
Luxembourg will be specified in the applicable Final Terms. If the Covered Bonds are to clear
through an additional or alternative clearing system the appropriate information will be specified
in the applicable Final Terms.
The address of Euroclear is Euroclear Bank SA/NV, 1 Boulevard du Roi Albert II, B 1210
Brusssels and the address of Clearstream, Luxembourg is Clearstream Banking, 42 Avenue JF
Kennedy, L 1855 Luxembourg.
7 Conditions for determining price
The price and amount of Covered Bonds to be issued under the Programme will be determined
by the Issuer and each relevant Dealer at the time of issue in accordance with prevailing market
conditions.
8 Passporting
The Issuer may, on or after the date of this Base Prospectus, make applications for one or more
certificates of approval under Article 18 of the Prospectus Directive as implemented in Ireland to
be issued by Irish Financial Services Regulatory Authority to the competent authority in any
Member State.
- 166 -

INDEX OF DEFINED TERMS
€ ........................................................................ii
Aaa .....................................................................1
AAA ...................................................................1
Accrual Yield...................................................46
Additional Business Centre(s).........................46
Additional Cover Pool Assets .........................13
Additional Financial Centre(s) ........................46
adjusted ............................................................64
Adjusted Outstanding Principal Balance.........46
Adjusted Required Redemption Amount ......153
Agency Agreement ..........................................47
Agent................................................................47
Agents ..............................................................47
Aggregate Adjusted Outstanding Principal
Balance.........................................................47
Amortised Face Amount..................................67
Arrangers............................................................4
Arrears of Interest ....................................47, 152
Article 91......................................................7, 47
Asset Monitor...............................................4, 47
Asset Monitor Agreement ...............................47
Asset Percentage..............................................15
Athens Business Day .......................................47
Bank ...............................................................100
Base Prospectus .................................................1
Basel Committee..............................................41
Basel guidelines ...............................................41
Bearer Bonds..............................................43, 47
Bond Certificate...............................................57
Borrower ................................................142, 151
business day .....................................................58
Business Day....................................................62
Business Day Convention................................62
Calculation Agent ........................................4, 47
Calculation Amount.........................................47
Calculation Date...............................................47
Capitalised Arrears ..................................47, 152
Capitalised Expenses ...............................48, 152
Charged Property .............................................48
Clearing System...............................................48
Clearstream, Luxembourg ...............................48
Closing Arrangements Deed............................48
Collection Account ..........................................19
Collections .....................................................149
Commingling Ledger.......................................19
Commitment Amount ......................................24
Conditions ...............................................i, 48, 80
continuing.........................................................48
Controller .......................................................145
Coupon Sheet...................................................71
Couponholder...................................................57
Couponholders .................................................48
Coupons ...........................................................48
Cover Event .....................................................48
Cover Pool........................................................48
Cover Pool Asset .......................................12, 48
Covered Bond Swap Agreements............48, 157
Covered Bond Swap Provider .........................48
Covered Bond Swap Providers......................157
Covered Bondholder ........................... 49, 57, 58
Covered Bonds.................................................49
Credit Facility Agreement................................23
Credit Facility Provider......................................4
Credit Institutions Insolvency Directive..........41
D1 .....................................................................64
D2 .....................................................................64
data subject.....................................................144
Day Count Fraction..........................................63
Dealer .................................................................1
Dealer Agreement ............................................49
Dealers..............................................................49
Defaulted Loan Asset.....................................149
Definitive Covered Bonds................................49
Determination Date..........................................49
Determination Period .......................................49
Dual Currency Interest Covered Bonds.......6, 49
Earliest Maturing Covered Bonds .................153
Early Redemption Amount ..............................67
ECB ..................................................................43
Election Period.........................................24, 156
Eligibility Criteria ....................................13, 147
EMU .................................................................. ii
Enforcement Procedures ................................149
English Charged Property................................49
English Security ...............................................49
EUR ................................................................... ii
EURIBOR ........................................................60
euro.............................................................. ii, 49
Euro Equivalent........................................49, 153
Euroclear ..........................................................49
Eurosystem.......................................................43
Event of Default ...........................................9, 49
Excess Hedge Collateral ................................159
Exchange Date .................................................43
Exchange Event..........................................43, 44
Expenses...........................................................22
Extended Final Maturity Date......................8, 49
Extraordinary Resolution.................................49
Facilities ...........................................................24
Facility Special Drawing................................157
Facility Special Ledger ....................................19
Facility Special Ledger Drawing.....................21
Final Maturity Date......................................8, 49
Final Redemption Amount...........................8, 49
Final Terms .................................................. i, 49
Financial Regulator............................................1
Fitch..............................................................1, 49
Fitch Ratings ......................................................4
Fixed Coupon Amount.....................................49
Fixed Rate Covered Bonds ..........................6, 49
Floating Rate Convention ................................62
Floating Rate Covered Bonds......................6, 50
Following Business Day Convention ..............63
Forward Starting Covered Bond Swap..........157
Framework .......................................................29
FSMA .............................................................163
- 167 -

Global Covered Bonds.....................................50
Global Registered Bond.............................44, 50
Greece ................................................................ii
Greek Charged Property ..................................50
Greek Covered Bond Legislation ................7, 50
Greek Security .................................................50
Greek State.........................................................ii
Group........................................................80, 100
Hedge Collateral Ledger..................................50
Hedge Collateral Ledgers ................................19
Hedging Agreements .......................................24
Hedging Counterparties.....................................4
Hedging Counterparty .................................4, 50
Holder.........................................................57, 58
IBG.................................................................111
Incorporated Terms Memorandum..................50
Indebtedness.....................................................50
Indemnity .........................................................23
Index Linked Interest Covered Bonds.........6, 50
Indexed Valuation......................................15, 50
Individual Covered Bond Certificates.............44
Initial Advance.........................................50, 152
Initial Assets.....................................................13
Instalment Amount ..........................................67
Instalment Covered Bonds...............................50
Instalment Date ................................................67
Instrument ........................................................50
Instrumentholders ............................................50
Instruments.......................................................50
Interest Amount ...............................................51
Interest Commencement Date .........................51
Interest Determination Date.............................51
Interest Payment Date......................................51
Interest Period ..................................................51
Interest Rate .....................................................51
Interest Rate Swap Agreements.......................51
Interest Rate Swap Provider ....................51, 157
Investor Put ......................................................66
Investor Report.................................................25
Investor Report Date........................................25
Investor's Currency ..........................................29
ISDA Definitions .............................................51
Issue Date.....................................................5, 51
Issue Price ....................................................5, 51
Issuer ........................................................1, 4, 51
Issuer Call ........................................................66
Issuer Downgrade ..........................................154
Issuer Event................................................16, 72
Issuer Insolvency Event...................................51
Issuer Standard Variable Rate .......................157
Late Payment ...................................................68
Lending Criteria.............................................137
Liabilities .........................................................52
LIBOR..............................................................60
Listing Agent .....................................................4
Loan Asset Agreement ..................................149
Loan Assets......................................................12
Loan in Arrears ..............................................149
Loans..........................................................12, 52
Loss ................................................................149
LTV ..................................................................15
M1.....................................................................64
M2.....................................................................64
Margin ..........................................................6, 52
Marketable Assets ............................................52
Master Execution Deed....................................52
Maximum Interest Rate....................................52
Maximum Redemption Amount......................52
Meeting.............................................................52
Member State .................................................... ii
Merged Banks ................................................100
Minimum Interest Rate ....................................52
Minimum Redemption Amount.......................52
Minimum Short-Term Rating ........................155
Modified Following Business Day Convention
......................................................................63
Moody's ....................................................1, 4, 52
Moody's Issuer Downgrade Event...................53
Negative Carry Factor..............................53, 153
New Asset Type .............................................149
New Basel Capital Accord...............................41
NGN .................................................................43
No Adjustment .................................................63
Non Forward Starting Covered Bond Swap..157
Non-exempt Offer ..........................................162
not adjusted ......................................................65
Notice of Default..............................................53
Notices Condition ............................................53
OEK..................................................................34
Offer Period....................................................152
Operating Procedures.....................................149
Optional Redemption Amount.........................53
Optional Redemption Date ..............................53
Outstanding Principal Balance.................53, 152
Participating Member State .............................53
Partly Paid Covered Bonds ..........................7, 53
Paying Agents ..................................................53
payment business day.......................................70
Payments Priorities ..........................................53
Permanent Global Covered Bond ....................43
Permanent Global Covered Bonds...................53
Person ...............................................................53
Post Event of Default Priority of Payments ...23,
53
Preceding Business Day Convention...............63
Pre-Notation .....................................................53
Principal Amount Outstanding ........................53
Principal Financial Centre................................54
Principal Paying Agent ................................4, 54
Processing.......................................................145
Processor ........................................................145
Product Switch ...............................................151
Programme ...................................................1, 54
Programme Closing Date.................................54
Programme Payment Date ...............................54
Programme Payment Date Payments Priorities
................................................................22, 54
Property ............................................................54
Property Consultant........................................153
Prospectus Directive ....................................1, 80
- 168 -

Prudent Mortgage Lender..............................137
Put Notice.........................................................66
Rating Agencies...............................................54
Rating Agency Confirmation...........................54
Receiptholders..................................................54
Receipts............................................................54
Receivables ....................................................149
Receiver ...........................................................54
Record Date .....................................................71
Recoveries......................................................149
Redeemed Covered Bonds...............................66
Redemption Amount........................................54
Reference Banks ..............................................54
Reference Price ................................................54
Reference Rate.................................................54
Registered Bonds .............................................54
Registrar .......................................................4, 54
Registration Statement.....................................12
Regulation S........................................................i
Related Security...............................................12
Relevant Date.............................................55, 72
relevant Dealer...................................................1
Relevant Factor ................................................30
Relevant Financial Centre ...............................55
Relevant Implementation Date......................162
Relevant Member State....................... ii, 80, 162
Relevant Time..................................................55
Remortgaged Loans .......................................149
Required Outstanding Principal Balance
Amount.......................................................153
Required Redemption Amount......................153
Revenue Ledger ...............................................19
Screen Rate Determination..............................55
Secondary Covered Bond Legislation...7, 55, 96
Secured Amount ..............................................55
Secured Creditors.............................................55
Securities Act......................................................i
Security ............................................................55
Security Deed...................................................55
Selected Loan Offer Notice ...........................152
Selected Loan Removal Notice .....................152
Selected Loans ...............................................152
Selection Date ..................................................66
Series ................................................................55
Servicer.........................................................4, 56
Servicer Events...............................................146
Services ..........................................................146
Servicing Deed.................................................56
Specified Currency.......................................5, 56
Specified Denomination(s) ..............................56
Specified Interest Payment Date......................56
Specified Period ...............................................56
Statutory Pledge ...........................................7, 56
Statutory Tests............................................14, 56
Stock Exchange................................................56
sub unit .............................................................65
Subordinated Termination Payment ................22
Substituted Obligor ..........................................78
Swap Rate.........................................................56
Talons ...............................................................56
TARGET Settlement Day................................56
TARGET2 ........................................................56
Tax....................................................................56
Temporary Global Covered Bond ...................43
Temporary Global Covered Bonds..................56
Test Event...................................................16, 56
Tranche.............................................................56
Transaction Account ..................................19, 56
Transaction Account Agreement .....................57
Transaction Account Bank...........................4, 57
Transaction Documents ...................................57
Transaction Parties...........................................57
Transfer Agent .............................................4, 57
Treaty................................................................57
Trust Deed........................................................57
Trust Documents ......................................57, 156
Trustee..........................................................4, 57
USA PATRIOT Act of 2001 .........................133
Variable Interest Covered Bonds.................6, 57
Y1 .....................................................................64
Y2 .....................................................................64
Zero Coupon Covered Bonds ......................7, 57
- 169 -

REGISTERED OFFICE OF THE ISSUER
Marfin Egnatia Bank S.A.
4, Danaidon Street
546 26 Thessaloniki
Greece
ARRANGERS
Deutsche Bank AG, London Branch
Winchester House
1 Great Winchester Street
London EC2N 2DB
UK
Barclays Bank PLC
5 The North Colonnade
Canary Wharf
London E14 4BB
UK
TRUSTEE
The Bank of New York Mellon (International) Limited
One Canada Square
London E14 5AL
UK
PRINCIPAL PAYING AGENT, CALCULATION AGENT, TRANSFER AGENT,
TRANSACTION ACCOUNT BANK AND LISTING AGENT
The Bank of New York Mellon, London Branch
One Canada Square
40 th Floor
London, E14 5AL
UK
REGISTRAR
The Bank of New York (Luxembourg) S.A.
Aerogolf Center,
1A Hoehenhof
L-1736 Senningerberg
Luxembourg
LEGAL ADVISERS
To the Arrangers as to English law
To the Issuer as to Greek law
Clifford Chance LLP
Moratis-Passas
10 Upper Bank Street
15, Voukourestiou Street
London E14 5JJ
106 71 Athens
UK
Greece
To the Trustee as to English law
Clifford Chance LLP
10 Upper Bank Street
London E14 5JJ
UK
- 170 -

APPENDIX
LAIKI BANK (HELLAS) A.E.
FINANCIAL STATEMENTS
31 DECEMBER 2006
IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS
- 171 -

LAIKI BANK (HELLAS) A.E.
Financial Statements
31 December 2006
In accordance with International
Financial Reporting Standards
The attached financial statements have been approved by the Board of Directors of
LAIKI BANK (HELLAS) A.E. on 21 March 2007 and are posted in the Bank’s website
www.laiki.gr

Laiki Bank (Hellas) Α.Ε.
31 December 2006
Table of Contents
Page
Financial Statements
Income Statement 1
Balance sheet 2
Statement of changes in equity 3
Statement of cash flows 4
General information 5
Notes to the Financial Statements 6-40
Auditor's Report 41

Laiki Bank (Hellas) Α.Ε.
31 December 2006
Income Statement
For the year ended 31 December 2006
(Amounts in thousands of Euro)
Notes 2006 2005
Interest income 170.559 125.011
Interest expense (96.117) (68.465)
Net interest income 6 74.442 56.546
Fee and commission income 12.175 13.251
Fee and commission expense (1.832) (1.241)
Net fee and commission income 7 10.343 12.010
Net trading income 8 1.829 3.647
Dividend income 37 29
Other income 1.178 2.709
Operating income 87.829 74.941
Impairment losses 17 (28.046) (13.580)
Staff costs 9 (26.545) (23.509)
Depreciation 19,20 (4.082) (8.752)
Other operating expenses 10 (25.980) (23.054)
Operating expenses (84.653) (68.895)
Profit before income tax 3.176 6.046
Income tax 11 (2.316) (3.369)
Profit after tax 860 2.677
Earnings per share (in Euro)
-basic and diluted 28 0,13 0,44
Athens, 21 March 2007
The Chairman of the Board of Directors
The Managing Director
Michael L. Louis
Efthimios Th. Bouloutas
Α.D.Τ. 605609 Α.D.Τ. Χ-501092
Chief of Accounts
Konstantinos G. Kalliris
ΑDΤ Ι- 929166 / Permit No. Ο.Ε.Ε. 0024336
Attached notes on pages 6 to 40 are part of the financial statements
1

Laiki Bank (Hellas) Α.Ε.
31 December 2006
Balance sheet
For the year ended 31 December 2006
(Amounts in thousands of Euro)
ASSETS
Notes 2006 2005
Cash and balances with Central Bank 12 126.653 127.072
Derivative financial instruments 14 3.078 1.872
Trading securities 15 39.449 14.518
Loans and advances to banks 13 592.348 501.359
Loans and advances to customers 17 2.498.971 2.235.169
Available-for-sale securities 16 7.365 1.887
Investments in subsidiaries and associates 18 35.993 13.367
Intangible assets 19 757 958
Property and equipment 20 14.833 16.342
Deferred tax assets 21 1.623 326
Other assets 22 25.192 23.425
TOTAL ASSETS 3.346.262 2.936.295
LIABILITIES
Derivative financial instruments 14 964 866
Deposits from banks 23 466.496 283.528
Deposits from customers 24 2.614.738 2.421.827
Employee benefits 29 1.550 1.326
Other liabilities 25 50.489 39.713
Current tax liability 2.311 1.390
TOTAL LIABILITIES 3.136.548 2.748.650
SHARE CAPITAL
Share Capital 26 99.707 89.156
Share premium 86.831 75.024
Reserves 27 12.480 13.629
Retained earnings 10.696 9.836
TOTAL EQUITY 209.714 187.645
TOTAL LIABILITIES AND EQUITY 3.346.262 2.936.295
Attached notes on pages 6 to 40 are part of the financial statements
2

Laiki Bank (Hellas) Α.Ε.
31 December 2006
Statement of Changes in Shareholders' Equity
For the year ended 31 December 2006
(Amounts in thousands of Euro)
Share
capital
Share premium
Legal
reserve
Special
reserves
Tax-free
reserves
Other
reserves
Retained
earnings
Total
Balance 1 January 2005 89.156 75.024 1.708 2.894 8.933 63 7.159 184.937
Profit for the year - - - - - - 2.677 2.677
Revaluation of available-for-sale portfolio - - - - - 31 - 31
Balance 31 December 2005 89.156 75.024 1.708 2.894 8.933 94 9.836 187.645
Balance 1 January 2006 89.156 75.024 1.708 2.894 8.933 94 9.836 187.645
Profit for the year - - - - - - 860 860
Increase of share capital 10.551 11.807 - - - - - 22.358
Revaluation of available-for-sale portfolio - - - - - (1.149) - (1.149)
Allocation to reserves - - - - (8.933) 8.933 - -
Balance 31 December 2006 99.707 86.831 1.708 2.894 - 7.878 10.696 209.714
Attached notes on pages 6 to 40 are part of the financial statements
3

Laiki Bank (Hellas) Α.Ε.
31 December 2006
Statement of Cash Flows
For the year ended 31 December
(Amounts in thousands of Euro)
2006 2005
Operating activities
Profit after tax 860 2.677
Adjustments for non-cash items
Depreciation and amortization 4.082 8.752
Impairment loss 28.046 13.580
Employee benefit 224 260
Valuation trading portfolio (788) (482)
Loss from sale of fixed assets (128) (91)
Other non-cash items 12 (144)
Tax 2.316 3.369
Changes in operating assets and liabilities
Net (increase)/decrease in trading securities and derivatives (26.313) 10.319
Net (increase)/decrease in loans and advances to banks - 150.730
Net (increase)/decrease in loans and advances to customers (291.848) (469.202)
Net (increase)/decrease in other assets (25.692) (2.788)
Net increase/(decrease) in deposits from banks 182.968 8.625
Net increase/(decrease) in deposits from customers 192.911 472.985
Net increase/(decrease) in other liabilities 9.284 2.238
Net cash flow from operating activities 75.934 200.828
Investing activities
Acquisition of available-for-sale investments (5.477) -
Purchases of assets (2.245) (5.134)
Cash flows from investing activities (7.722) (5.134)
Financing activities
Share capital increase 22.358 -
Cash flows from financing activities 22.358 -
Net increase/(decrease) of cash and cash equivalents 90.570 195.694
Cash and cash equivalents at 1 January 628.431 432.737
Cash and cash equivalents at 31 December 719.001 628.431
Attached notes on pages 6 to 40 are part of the financial statements
4

Laiki Bank (Hellas) Α.Ε.
31 December 2006
GENERAL INFORMATION ON THE BANK
LAIKI BANK (HELLAS) A.E. (the Bank) was founded in 1992, in Athens, Panepistimiou 16 str.
and is listed in the Register of Societe Anonyme with registered number 27084/06/Β/92/16,
while its duration is 99 years till 2091.
According to article 3 of the Articles of Association, the purpose of the Bank is to provide
banking services.
The Bank has a network of 58 branches in Greece which provide to their customers banking
services in corporation with the management services.
During the year, there were certain share acquisitions and as a result Marfin Popular Bank
possessed 82,20% of the shares at 31 December 2006. These financial statements are
consolidated with Marfin Popular Bank.
The Boards of LAIKI BANK (HELLAS) AE decided to proceed in the legal merger of EGNATIA
BANK AE and MARFIN BANK. The transition date is 31/12/2006.
Board of Directors
The composition of the Board of Directors at 31/12/2006 is as follows:
Chairman
Michael L. Louis
Vice President
Platon E. Lanitis
Managing Director
Efthimios Th. Bouloutas
Members
Eleftherios A. Chiliadakis
Andreas E. Vgenopoulos
Peter G. Petrou
Christos I. Stylianidis
Kyriacos D. Mageiras
Markos A. Foros
Chrysostomos Th. Theoklis
Konstantinos N. Mylonas
5

Laiki Bank (Hellas) Α.Ε.
31 December 2006
NOTES TO THE FINANCIAL STATEMENTS
1 Basis of preparation of financial statements
The financial statements for the Bank have been prepared in accordance with International
Financial Reporting Standards (IFRS) and its interpretations adopted by the International
Standards Board (IASB) as adopted by the European Union.
The Board of Directors approved these financial statements on 21 March 2007.
1.1 Basis of measurement
The financial statements are presented in Euro rounded to the nearest thousand. They have
been prepared on the historical cost basis except for the following:
• financial instruments classified as available-for-sale securities at fair value,
• financial instruments held for trading at fair value,
• derivative financial instruments at fair value
1.2 Functional and presentation currency
These financial statements are presented in Euro which is the Bank's functional currency,
rounded to the nearest thousand.
1.3 Estimates
The preparation of financial statements requires management to make judgments, estimates
and assumptions that affect the reported amounts of assets and liabilities, income and
expenses. Actual results may differ from these estimates. Estimates and underlying
assumptions are based on historical experience and various other factors that are believed to
be reasonable under the circumstances, the results of which form the basis of making
judgments about carrying values of assets and liabilities that are not readily apparent from
other sources.
2 Significant Accounting Policies
The accounting policies applied for the preparation of the financial statements at 31
December 2006 are as follows:
2.1 Foreign currency transactions
Transactions in foreign currencies are translated to Euro, the reporting currency at the foreign
exchange rate ruling at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies, at the reporting date are translated to euro at the foreign
exchange rate ruling at that date. Foreign exchange differences arising on translation are
recognised in the income statement. Non-monetary assets and liabilities that are measured
in terms of historical cost in a foreign currency that are translated to euro using the exchange
rate at the date of the transaction. Non-monetary assets and liabilities denominated in foreign
currencies that are stated at fair value are translated to euro at foreign exchange rates ruling
at the dates the fair value was determined. Differences arising from the translation of nonmonetary
assets, such as available-for-sale, are reported in the equity till the sale of this non
monetary asset.
2.2 Interest income and expenses
Interest income and expense is recognized in the income statement as it accrues, taking into
6

Laiki Bank (Hellas) Α.Ε.
31 December 2006
account the effective yield of the instrument or an applicable floating rate. The effective
interest rate method is a method of calculating the amortised cost of a financial asset or a
financial liability and of allocating the interest income or expense over the relevant period.
The effective interest rate is the rate that exactly discounts the future cash payments or
receipts through the expected life of the financial instrument. 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 recognised using the rate of interest used to discount the future cash flows
for the purpose of measuring the impairment loss.
Interest income and expense includes the amortization of any premium or discount or other
differences between the initial carrying amount of an interest bearing instrument and its
amount at maturity calculated on an effective interest rate basis.
2.3 Commission income
Commission income relates mainly to transaction and service fees, which are expressed as
the services are received and are recognized at income statement.
Fees and commission income and expenses that are integral to the effective interest rate on a
financial asset or liability are included in the measurement of the effective interest rate.
Other fees ands commission income, including account servicing fees, investment
management fees, sales commission, placement fees and syndication fees, are recognized
as the related services are performed.
2.4 Dividends
Dividends of ordinary shares are recognized as liability for the period that is approved by the
Bank's shareholders. Dividend income is recognized in the income statement on the date the
dividend is approved.
2.5 Income tax
Income tax on the profit or loss for year comprises of current and deferred tax. Income tax is
recognized in the income statement, except to the extent that it relates to items recognized
directly in equity, in which case it is recognized in equity. Current tax is the expected tax
payable on the taxable income for the year, using the tax rates enacted or substantially
enacted at the balance sheet date, and any adjustment to tax payable in respect of previous
years. Deferred tax is the tax that will be paid or will be received in the future and is related
with accounting events that took place during the closing period but considered taxable
income or expense in future periods. Deferred tax is provided using the liability method,
providing for temporary differences between the carrying amount of assets and liabilities for
financial reporting purposes and the amounts used for tax purposes. The following temporary
differences are not provided for: goodwill not deductible for tax purposes, the initial
recognition of assets or liabilities that affect neither accounting nor taxable differences. The
amount of deferred tax provided is based on the expected manner of realization or settlement
of the carrying amount of assets or liabilities, using tax rates enacted or substantively enacted
at the balance sheet date. A deferred tax asset is recognized only to the extent that it is
probable that future taxable profits will be available against which the asset can be utilized.
Deferred tax assets are reduced to the extent that it is probable that the related tax benefit will
not be realized. Additional income taxes that arise from the distribution of dividends are
recognized at the same time as the liability to pay the related dividend.
2.6 Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents consist of:
a. Cash on hand
b. Placements with the Central Bank and
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Laiki Bank (Hellas) Α.Ε.
31 December 2006
c. Short term balances due from financial institutions.
Short term balances due from financial institutions include monetary assets with an original
maturity of three months or less from the date of the preparation of financial statements.
2.7 Financial instruments
1. Loans and receivables
2. Held-to-maturity instruments
3. Instruments at fair value through profit and loss
4. Available-for-sale
For each of the above classifications the following is applicable:
1. Loans and receivables
Loans and receivables are non derivative financial assets with regular or non assigned
payments that are not negotiated in active markets except those which are recognized as
investments at fair value through profit and loss or as available for sale.
This category is classified at amortized cost.
2. Held-to-maturity instruments
Held to maturity instruments are financial assets with determined maturity date and regular or
non assigned payments which the Bank has the intention and ability to hold till maturity. This
category is carried at amortized cost by applying the effective interest rate method. Amortized
cost is determined by the acquisition value and any other difference arising from the share
premium during that date, less impairment loss.
3. Instruments at fair value through profit and loss
These instruments are acquired principally for the purpose of short term profit. After original
recognition they are measured at fair value. Gains and losses arising from the valuation of
those investments are recognized in the income statement.
4. Available-for-sale instruments
This category includes instruments which are not held till maturity or can be liquated or
making profit from the change of interests or the change in the price of foreign currencies.
After original measurement, those instruments are recognized at fair value. Gains and losses
arising from the valuation of available for sale instruments are recognized directly in equity
until their disposal or are collected or when they have been impaired and transferred to profit
and loss.
Fair value measurement
Investments that are listed in organized exchanged are valued at fair value, which is
determined according the current stock market value at the reporting date, whereas for the
instruments that are not listed, their fair value is calculated according to valuation models that
are generally accepted.
All regular purchase and sale transactions of financial instruments are posted during the
transaction date which relates to the date which the Bank is obliged to acquire or to dispose
that financial instrument. The term “regular” purchase and sale transactions, requires their
disposal to be completed within the time schedule that has been set by the legal authorities or
has been established by the market general practice.
8

Laiki Bank (Hellas) Α.Ε.
31 December 2006
2.8 Derivatives
A derivative is a financial instrument or other contract that follows the principles of IAS 39 and
has one of the three following characteristics:
(a)
(b)
(c)
Its value, changes as a result of a specific change, in interest rate, the price of a
financial instrument, a product price, an exchange currency, a price or interest index,
a credit classification or another relevant variable (which sometimes is mentioned as
“subject”).
It does not require an initial net investment, or the initial investment is less than the
one required for different type of contracts which are expected to have similar
changes to market fluctuation to similar market changes and
It will be settled in a future date.
Derivatives are depicted at fair value, which is determined by the stock market prices or
calculated according to valuation techniques, such as discount cash flows analysis and
valuation models for option contracts. Derivatives are classified as financial assets when their
estimated fair value is positive and classified as financial liabilities when their estimated fair
value is negative. The changes in the derivatives’ fair value are recognized at profit and loss
and particularly at net gains or losses from financial transactions.
2.9 Investments in subsidiaries
Investments in subsidiaries are stated at cost value less impairment losses.
2.10 Property and equipment
Property and equipment are stated at cost less accumulated depreciation and impairment.
The historical cost includes costs relating to the acquisition of property and equipment.
Subsequent expenditure is capitalized or recognized as a separate asset only when it
increases future economic benefits. Expenditure for repairs and maintenance is recognized
in the income statement as an expense as incurred.
Depreciation is charged on a straight line basis over the estimated useful lives of property,
plant and equipment taking into account residual values. A change in the depreciation
method is considered a change in estimate and is allowed only if relevant conditions are not,
and there is an explanation included in the notes.
The estimated useful lives are as follows:
- Additions to leased fixed assets and improvements: duration of the lease
- Furniture and equipment: 3 to 5 years
- Machines and installations: 8 to 9 years
- Vehicles 6 to 7 years
The residual value of property and equipment and their useful lives are periodically reviewed
and adjusted if necessary at each reporting date. Property and equipment which is impaired
is carried at its recoverable amount. Gains and losses from the sale of property and
equipment are recognized in the income statement.
2.11 Intangible assets
Intangible assets consist of software and are stated at cost less accumulated amortization
and impairment losses.
Amortisation is charged to the income statement on a straight-line basis over the estimated
useful life of the software which the Group estimated in 3 years. The Group, on an annual
basis, assesses whether any objective evidence of impairment exists or whether the expected
9

Laiki Bank (Hellas) Α.Ε.
31 December 2006
useful life has changed. When the book value of an intangible asset exceeds its recoverable
value, an impairment loss is charged the income statement equally. The Group does not
calculate residual value for intangible assets. Expenses concerning the maintenance of
software are recognized in the profit and loss when they occur.
2.12 Impairment losses on loans and advances
Loans and advances are valued at amortized cost, applying the original effective interest rate
method.
The recoverability of loan is done in accordance to the financial position, the terms of
financing, the repayment history of the debtor, the possibility of protection from credible and
reliable guarantors and the liquidity of collaterals.
For loans with small amounts, the Bank categorizes them in groups with similar credit risk
characteristics such as consumer loans, housing loans and credit card balances and
estimates any impairment loss for each portfolio separately. The total amount of doubtful
debts, the time period for which they characterized as doubtful, the market condition, past
experience related to future losses, are taken into consideration when assessing for
impairment loss.
The Bank assess as at each balance sheet date, whether there is evidence of impairment in
accordance with the general principles and methodology set out in IAS 39 and the relevant
implementation guidance. A loan (as any other financial asset) is impaired when, and only
when there is an objective indication for impairment as a result of one or more of the following
events that occurred after its initial recognition, which may have effect future cash flows and
can be reliably calculated.
Objective evidence for impairment is depicted as follows:
- Significant economic difficulty of the issuer,
- Violation of terms and conditions, delay or inability to pay of interest or capital
- Possibility of bankruptcy or other financial credit reorganisational structure.
When a loan is described as doubtful, its cost is deducted as an impairment loss to
recoverable amount, which is defined as the present value of expected future cash flows,
including the expected recoverable cash flows from guarantees and tangible collaterals and
discounted by the loan effective interest- rate.
Changes in the recoverable amounts after the period that is expected to be collected are
compared with previous calculations and any difference in the impairment, if occurred, is
recorded in the profit and loss.
The impairment for doubtful debts can be reversed only when the client’s solvency is
improved to the extent that the collectivity of capital and interest is considered feasible or
occurred on time according to the loan terms and conditions.
Loans that are not considered collectible are written-off against their impairment for doubtful
debts.
2.13 Non current assets held for sale
Non-current assets or disposal groups comprise of assets acquired from auctions, that are
expected to be recovered primarily through sale and therefore these are classified as held for
sale. Assets held for sale are carried at the lower of their carrying amount and fair value less
cost to sell.
Property in this category are not depreciated, however, they are reviewed for impairment at
each reporting date. Gains or losses from the sale of these assets are recognized in the
income statement.
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Laiki Bank (Hellas) Α.Ε.
31 December 2006
2.14 Financial liabilities
This category includes financial liabilities held for trading:
i. when the financial liability is acquired or repurchased in the short term to take advantage
of short-term market fluctuations,
ii. they are derivatives which are not used for hedging purposes
The Bank includes financial liabilities which are measured at initial recognition, at fair value
through profit or loss.
Liabilities are not included in this category, are valued at amortized cost with the use of
original effective interest rate method.
2.15 Employee benefit
The Bank has a defined benefit pension plan required by law.
The defined benefit plan is a pension plan where amount of payment varies depending upon
the employee's length of service and salary on the date of retirement.
The Bank's obligation is determined each year based on an actuarial study and every three
years by a separate actuary using the projected unit credit method. The present value
amount of future benefit is discounted. The discount rate is the yield of Greek State bonds
that have maturity dates approximating the terms of the Bank's obligations.
For defined contribution plans, the Bank pays contributions to publicly or privately
administered pension insurance plans, to insurance companies and other funds on a
mandatory or voluntary basis. The Bank has no further payment obligations once the
contributions have been paid.
The contributions are recognized as an employee benefit expense on an accrual basis.
Prepaid contributions are recognized as an asset to the extent that a cash refund or a
reduction in the future payments is available.
2.16 Provisions
A provision is recognized when:
- the Bank has a constructive or legal obligation as a result of a past event
- the liability may be determined objectively and reliably and
- it is probable that an outflow of economic benefits will be required to settle the
obligation and the amount has been reliably estimated.
The recognition is done on the present value of the expenditures expected to be required to
settle the obligation. Provisions are measured by discounting the expected future cash flows
at a rate that reflects current market assessments of the time value of money. Cash
payments are recorded to provisions to the extent that they relate to the specific provision. At
each reporting period provisions are re-assessed.
Provisions are not recognized for future operating losses. However, future events that may
affect the amount required to settle the obligation, for which a provision has been recognized,
are taken into account when sufficient objective evidence exists that they will occur.
Reimbursements from third parties relating to a portion of or all of the estimated cash outflow
are recognized as assets, only when it is virtually certain that they will be received. The
expense recognized in the income statement relating to the provision may be presented net of
the amount of the reimbursement.
11

Laiki Bank (Hellas) Α.Ε.
31 December 2006
2.17 Share capital
Incremental costs directly attributable to the issue of new shares or options or to the
acquisition of a business are shown as a deduction in equity, net of the tax from the proceeds.
2.18 New standards
A number of new standards, amendments to standards and interpretations adopted by the
European Union are not yet effective for the year ended 31 December 2006, and have not
been applied in these financial statements:
● IFRS 7 Disclosures in Financial Instruments which becomes mandatory for the 2007
financial statements, is not expected to have any impact on the Bank’s net position.
●
IFRS 8 Operating Segments which becomes mandatory from 1 January 2009 is not
expected to have any impact on the Bank’s net position.
• IFRIC 7 Applying the Restatement Approach under IAS 29 Financial Reporting in
Hyperinflationary Economies which was issued 1 March 2006 is not expected to have any
impact on the financial statements.
• IFRIC 8 Scope of IFRS 2 Share-based Payment which was issued 1 May 2006 is not
expected to have any impact on the financial statements.
• IFRIC 9 Reassessment of Embedded Derivatives which was issued 1 June 2006 is not
expected to have any impact on the financial statements.
● IFRIC 10 Interim Financial Reporting and Impairment which was issued 1 November 2006
will become mandatory for the 2007 financial statements.
● IFRIC 11 Group and Treasury Share Transactions which is applicable from 1 March 2007
is not expected to have any impact on the financial statements.
●
IFRIC 12 Service Concession Agreements which is applicable from 1 January 2008 is not
expected to have any impact on the financial statements.
12

Laiki Bank (Hellas) Α.Ε.
31 December 2006
3. Segment reporting
The Bank's operation concerns the sectors of corporate banking, retail banking and other
operations. All of its revenues are from activities in Greece.
For 31 December 2006
Corporate
Banking
Retail
Banking
Other
Operations
Total
Net interest income 36.190 38.252 - 74.442
Commission and other
income 7.197 3.635 2.555 13.387
TOTAL INCOME 43.387 41.887 2.555 87.829
General administrative
expenses (27.516) (28.598) (493) (56.607)
Impairment losses (15.528) (12.518) - (28.046)
TOTAL EXPENSES (43.044) (41.116) (493) (84.653)
PROFIT BEFORE TAX 343 771 2.062 3.176
TOTAL ASSETS 2.218.387 1.127.602 273 3.346.262
TOTAL LIABILITIES 1.949.311 1.186.949 288 3.136.548
For 31 December 2005
Corporate
Banking
Retail
Banking
Other
Operations
Total
Net interest income 35.339 21.207 - 56.546
Commission and other
income 9.690 7.643 1.062 18.395
TOTAL INCOME 45.029 28.850 1.062 74.941
General administrative
expenses (27.392) (23.168) (767) (51.327)
Impairment losses other
assets (9.793) (3.787) - (13.580)
- - (3.988) (3.988)
TOTAL EXPENSES (37.185) (26.955) (4.755) (68.895)
PROFIT BEFORE TAX 7.844 1.895 (3.693) 6.046
TOTAL ASSETS 2.315.225 620.830 240 2.936.295
TOTAL LIABILITIES 2.094.934 653.505 211 2.748.650
13

Laiki Bank (Hellas) Α.Ε.
31 December 2006
4 RISK MANAGEMENT
The Bank is exposed to various financial risks, the major ones are as follows:
4.1 CREDIT RISK
Credit risk is the risk that a counterparty (borrower) will be unable to repay amounts borrowed in
full when due. Especially with loans, credit risk concerns cases were a debtor is unable to repay
a part or the total of his debts. Impairment losses are provided for losses that have been incurred
at the balance sheet date. The Bank in assessing and coordinating credit risk management
adheres to the framework defined by the Bank of Greece.
In addition to the above, significant changes in the economy, or state of a particular industry could
result in risks that are different from those provided for at the balance sheet date. To manage
these risks management has established limits in relation to individual borrowers or groups of
borrowers. The limits established are constantly monitored and are subject to a regular review by
the responsible (based on the amount of the limit) approval body. Limits relating to specific credit
products, industries and countries are examined and approved by the ALCO and Executive
Committee.
The exposure to credit risk is managed by an analysis of the ability of the borrowers to their
obligations using internal credit rating systems and methodologies.
As a result the credit limits are adjusted if considered necessary. In addition the above analysis
takes into account the interest rate spread and collaterals held.
4.2 MARKET RISK
Market risk is the risk of losses arising from unfavourable developments in interest rates,
exchange rates, equity prices and commodities. Losses may also occur from the trading portfolio
and the management of assets and liabilities.
Market risk is measured with Value at Risk – VAR. The method applied for calculating Value at
Risk is historical simulation.
The Value at Risk methodology is complemented with stress tests based on both historical and
hypothetical extreme movements of market parameters, in order to estimate the potential size of
losses that could arise in extreme conditions.
Within the scope of policy-making for financial risk management by the Assets and Liabilities
Management Committee (ALCO), exposure limits and maximum loss (stop loss) for various
products of the trading portfolio have been set. In particular the following limits have been set for
the following risks:
• Foreign currency risk for spot and forward positions.
• Interest rate risk for positions on bonds, Interest Rate Swaps, Interest Futures,
Interest Options.
• Align risk for position in shares, index futures and options.
Positions held in these products are monitored during the day and are examined as to the
corresponding limit percentage cover and limit excess.
14

Laiki Bank (Hellas) Α.Ε.
31 December 2006
4.2.1 CURRENCY RISK
The Bank is exposed to risk due to currency fluctuation to the extent of maintaining open currency
positions which are not (or partially) hedged, placements and borrowings in foreign currency
exchange derivatives and cheque in the spot currency market.
Management set limits on the level of exposure by currency and in total for both overnight and
intraday positions. The total position arises from the sum of the current position from balance
sheet data and the term position from off balance sheet data. Included in the table below the
Bank's assets and liabilities at carrying amounts categorized by currency at 31 December 2006
and 2005.
15

Laiki Bank (Hellas) Α.Ε.
31 December 2006
CURRENCY RISK
(Amounts in thousands of Euro)
Balance at 31 December 2006
Other
EUR CYP USD GBP JPY CHF currencies Total
ASSETS
Cash and balances with Central Bank 126.033 155 300 80 3 9 73 126.653
Derivative financial instruments 3.078 - - - - - - 3.078
Trading securities 39.017 432 - - - - - 39.449
Loans and advances to banks 258.724 21.816 262.203 11.564 1.676 8.470 27.895 592.348
Loans and advances to customers 2.222.025 - 238.123 325 14.221 24.092 185 2.498.971
Available-for-sale investments 7.365 - - - - - - 7.365
Investments in subsidiaries and associates 35.993 - - - - - - 35.993
Intangible assets 757 - - - - - - 757
Property and equipment 14.833 - - - - - - 14.833
Deferred tax assets 1.623 - - - - - - 1.623
Other assets 22.016 22 2.610 47 27 94 376 25.192
TOTAL ASSETS 2.731.464 22.425 503.236 12.016 15.927 32.665 28.529 3.346.262
LIABILITIES
Derivative financial instruments 964 - - - - - - 964
Deposits from banks 328.388 19.864 12.177 - 104.337 - 1.730 466.496
Deposits from customers 1.566.861 22.107 485.088 90.773 266.061 2.409 181.439 2.614.738
Employee benefits 1.550 - - - - - - 1.550
Other liabilities 44.251 284 3.807 880 102 - 1.165 50.489
Current tax 2.311 - - - - - - 2.311
TOTAL LIABILITIES 1.944.325 42.255 501.072 91.653 370.500 2.409 184.334 3.136.548
Net on balance sheet position asset - liabilities 787.139 (19.830) 2.164 (79.637) (354.573) 30.256 (155.805) 209.714
Off balance sheet items (782.517) - 1.071 79.601 354.609 (22.246) 160.628 (208.854)
NET POSITION 4.622 (19.830) 3.235 (36) 36 8.010 4.823 860
16

Laiki Bank (Hellas) Α.Ε.
31 December 2006
CURRENCY RISK
(Amounts in thousands of Euro)
Balance at 31 December 2005
Other
EUR CYP USD GBP JPY CHF currencies Total
ASSETS
Cash and balances with Central Bank 126.594 100 232 64 2 10 70 127.072
Derivative financial instruments 1.872 - - - - - - 1.872
Trading securities 14.238 280 - - - - - 14.518
Loans and advances to banks 78.037 16.143 292.514 93.914 2.605 8.297 9.849 501.359
Loans and advances to customers 1.846.629 - 340.876 352 24.227 18.429 4.656 2.235.169
Investment securities 1.887 - - - - - - 1.887
Investments in subsidiaries and associates 13.367 - - - - - - 13.367
Intangible assets 958 - - - - - - 958
Property and equipment 16.342 - - - - - - 16.342
Deferred tax assets 326 - - - - - - 326
Other assets 18.612 14 3.261 181 985 68 304 23.425
TOTAL ASSETS 2.118.862 16.537 636.883 94.511 27.819 26.804 14.879 2.936.295
LIABILITIES
Derivative financial instruments 866 - - - - - - 866
Deposits from banks 20.240 - 46.935 87.553 114.802 3.087 10.911 283.528
Deposits from customers 1.509.715 9.936 493.700 96.848 115.703 2.229 193.696 2.421.827
Employee benefits 1.326 - - - - - - 1.326
Other liabilities 33.901 24 3.579 901 9 30 1.269 39.713
Current tax 1.390 - - - - - - 1.390
TOTAL LIABILITIES 1.567.438 9.960 544.214 185.302 230.514 5.346 205.876 2.748.650
Net on balance sheet position asset - liabilities 551.424 6.577 92.669 (90.791) (202.695) 21.458 (190.997) 187.645
Off balance sheet items (547.092) - (93.495) 90.195 198.691 (20.335) 187.068 (184.968)
NET POSITION 4.332 6.577 (826) (596) (4.004) 1.123 (3.929) 2.677
17

Laiki Bank (Hellas) Α.Ε.
31 December 2006
4.2.2 INTEREST RATE RISK
The Bank's operations are subject to the risk of interest rate fluctuations to the extent that
interest-earning assets and interest –bearing liabilities mature or reprice at different times or in
different amounts. In the table below total assets and total liabilities are classified by the closing
date. In the case, where there is no conventional closing date (open overdraft accounts) or
interest reallocation (sight deposits and saving accounts) for assets and liabilities, then those
are classified on the time period till one month.
18

Laiki Bank (Hellas) Α.Ε.
31 December 2006
Balance at 31 December 2006 Up to 1
month
INTEREST RATE RISK
(Amounts in thousands of Euro)
From 1 - 3
months
From
3 - 12
months
From
1 - 5
years
Over 5
years
Non
interest
Total
ASSETS
Cash and balances with Central Bank 126.653 - - - - - 126.653
Derivative financial instruments 3.078 - - - - - 3.078
Trading securities - - 3.015 5.269 27.999 3.166 39.449
Loans and advances to banks 586.979 5.243 126 - - - 592.348
Loans and advances to customers 1.407.998 464.949 194.398 329.934 101.692 - 2.498.971
Available-for-sale securities 7.365 - - - - - 7.365
Investments in subsidiaries and associates - - - - - 35.993 35.993
Intangible assets - - - - - 757 757
Property and equipment - - - - - 14.833 14.833
Deferred tax assets - - - - - 1.623 1.623
Other assets - - - - - 25.192 25.192
TOTAL ASSETS 2.132.073 470.192 197.539 335.203 129.691 81.564 3.346.262
LIABILITIES
Derivative financial instruments - - - - - 964 964
Deposits from banks 351.386 111.764 3.346 - - - 466.496
Deposits from customers 1.916.863 490.690 203.887 3.298 - - 2.614.738
Employee benefits - - - - - 1.550 1.550
Other liabilities - - - - - 50.489 50.489
Current tax - - - - - 2.311 2.311
TOTAL LIABILITIES 2.268.249 602.454 207.233 3.298 - 55.314 3.136.548
Total gap (136.176) (132.262) (9.694) 331.905 129.691 26.250 209.714
19

Laiki Bank (Hellas) Α.Ε.
31 December 2006
Balance at 31 December 2005 Up to 1
month
INTEREST RATE RISK
(Amounts in thousands of Euro)
From 1 - 3
months
From
3 - 12
months
From
1 - 5
years
Over 5
years
Non
interest
Total
ASSETS
Cash and balances with Central Bank 127.072 - - - - - 127.072
Derivative financial instruments 1.872 - - - - - 1.872
Trading securities 9.863 - - - - 4.655 14.518
Loans and advances to banks 450.188 51.171 - - - - 501.359
Loans and advances to customers 1.243.399 405.617 282.042 278.854 25.257 - 2.235.169
Available-for-sale securities 1.887 - - - - - 1.887
Investments in subsidiaries and associates - - - - - 13.367 13.367
Intangible assets - - - - - 958 958
Property and equipment - - - - - 16.342 16.342
Deferred tax assets - - - - - 326 326
Other assets - - - - - 23.425 23.425
TOTAL ASSETS 1.834.281 456.788 282.042 278.854 25.257 59.073 2.936.295
LIABILITIES
Derivative financial instruments - - - - - 866 866
Deposits from banks 264.113 19.415 - - - - 283.528
Deposits from customers 2.116.594 227.824 76.677 732 - - 2.421.827
Employee benefits - - - - - 1.326 1.326
Other liabilities - - - - - 39.713 39.713
Current tax - - - - - 1.390 1.390
TOTAL LIABILITIES 2.380.707 247.239 76.677 732 - 43.295 2.748.650
Total gap (546.426) 209.549 205.365 278.122 25.257 15.778 187.645
20

Laiki Bank (Hellas) Α.Ε.
31 December 2006
4.3 LIQUIDITY RISK
Liquidity risk relates to the Bank's ability to maintain sufficient funds to cover its obligations.
The monitoring of liquidity risk is focused on the management of cash inflows and outflows, as
well as on assessing of sufficient cash equivalents for current transactions. In order to
monitor the liquidity risk, methodology of liquidity gap is applied by which all financial assetliabilities
are thoroughly represented in time periods, in the following table, according to the
remaining duration till maturity. In the case, where there is no conventional closing date
(open overdraft accounts, sight deposits and saving accounts), then those are classified on
the timing period till one month.
21

Laiki Bank (Hellas) Α.Ε.
31 December 2006
Balance at 31 December 2006
LIQUIDITY RISK
(Amounts in thousands of Euro)
Up to
1 month
From 1 - 3
months
From
3 - 12
months
From
1 - 5 years Over 5 years Total
ASSETS
Cash and balances with Central Bank 126.653 - - - - 126.653
Derivative financial instruments 3.078 - - - - 3.078
Trading securities - 3.166 3.007 5.269 28.007 39.449
Loans and advances to banks 39.004 553.344 - - - 592.348
Loans and advances to customers 262.511 743.964 256.440 329.934 906.122 2.498.971
Available-for-sale securities - 3.182 - 4.183 - 7.365
Investment is subsidiaries and associates - - - - 35.993 35.993
Intangible assets - - - - 757 757
Property and equipment - - - - 14.833 14.833
Deferred tax assets - - 1.623 - - 1.623
Other assets - 15.389 7.948 679 1.176 25.192
TOTAL ASSETS 431.246 1.319.045 269.018 340.065 986.888 3.346.262
LIABILITIES
Derivative financial instruments - - - - 964 964
Deposits from banks 40.523 425.973 - - - 466.496
Due to customers 942.477 1.386.719 243.504 3.909 38.129 2.614.738
Employee benefits - - - - 1.550 1.550
Other liabilities - 28.524 167 21.798 - 50.489
Current tax liabilities - - 2.311 - - 2.311
TOTAL LIABILITIES 983.000 1.841.216 245.982 25.707 40.643 3.136.548
Total gap (551.754) (522.171) 23.036 314.358 946.245 209.714
22

Laiki Bank (Hellas) Α.Ε.
31 December 2006
Balance at 31 December 2005
LIQUIDITY RISK
(Amounts in thousands of Euro)
Up to
1 month
From 1 - 3
months
From
3 - 12
months
From
1 - 5 years Over 5 years Total
ASSETS
Cash and balances with Central Bank 127.072 - - - - 127.072
Derivative financial instruments 1.872 - - - - 1.872
Trading securities 2.522 - - - 11.996 14.518
Loans and advances to banks 25.725 475.634 - - - 501.359
Loans and advances to customers 219.004 517.549 157.340 466.803 874.473 2.235.169
Available-for-sale securities - - - 1.887 - 1.887
Investment is subsidiaries and associates - - - - 13.367 13.367
Intangible assets - - - - 958 958
Property and equipment - - - - 16.342 16.342
Deferred tax assets - - 326 - - 326
Other assets 80 11.538 8.910 1.011 1.886 23.425
TOTAL ASSETS 376.275 1.004.721 166.576 469.701 919.022 2.936.295
LIABILITIES
Derivative financial instruments - - - - 866 866
Deposits from banks 20.706 262.822 - - - 283.528
Due to customers 1.464.123 837.886 111.103 732 7.983 2.421.827
Employee benefits - - - - 1.326 1.326
Other liabilities - 31.963 3.216 2.470 2.064 39.713
Current tax liabilities - - 1.390 - - 1.390
TOTAL LIABILITIES 1.484.829 1.132.671 115.709 3.202 12.239 2.748.650
Total gap (1.108.554) (127.950) 50.867 466.499 906.783 187.645
23

Laiki Bank (Hellas) Α.Ε.
31 December 2006
5 FAIR VALUE FINANCIAL ASSETS AND LIABILITIES
IFRS imposes companies to disclose the fair value of financial assets and liabilities to the
extend that these can be calculated.
The fair value of financial instruments that are negotiated in a stock market such as
derivatives, bonds, stocks, mutual funds, is determined by quoted prices cost the balance
sheet date.
The fair value of financial instruments that are not negotiated in a stock market, is specified by
using valuation methods and principles that are based on market information as of the
balance sheet date.
The Bank considers that the carrying amount represents the fair value to a large extent due to
the nature of financial instruments which by majority are floating interest while a significant
amount have a maturity which is less than year.
Carrying Amount
Fair Value
(Amounts in thousands of Euro) 2006 2005 2006 2005
FINANCIAL ASSETS
Loans and advances to banks 592.348 501.359 592.348 501.359
Loans and advances to customers 2.498.971 2.235.169 2.499.520 2.235.659
Investments in subsidiaries 35.993 13.367 35.993 13.367
FINANCIAL LIABILITIES
Deposits from banks 466.496 283.528 466.496 283.528
Deposits from customers 2.614.738 2.421.827 2.614.789 2.421.869
24

Laiki Bank (Hellas) Α.Ε.
31 December 2006
6. NET INTEREST INCOME
(Amounts in thousands of Euro)
2006 2005
Customer loans 134.670 102.143
Loans and advances to financial institutions 24.492 17.132
Securities 1.421 3.872
Other interest income 9.976 1.864
Interest income 170.559 125.011
Customer deposits (78.242) (59.314)
Deposits from banks (8.570) (5.379)
Other interest expense (9.305) (3.772)
Interest expense (96.117) (68.465)
Net interest income 74.442 56.546
7. NET FEE AND COMMISSION INCOME
(Amounts in thousands of Euro)
2006 2005
Letters of guarantees and cheques 5.325 4.167
Credit cards and transfer of funds 2.275 2.472
Feasibility studies 1.094 2.860
Other commssion 3.481 3.752
Fee and commission income 12.175 13.251
Other commission (1.227) (693)
Asset management (605) (548)
Fee and commission expense (1.832) (1.241)
Net fee and commission expense 10.343 12.010
8.
GAINS LESS LOSSES ON FINANCIAL
TRANSACTIONS
(Amounts in thousands of Euro)
2006 2005
Gains from foreign exchange valuation 2.379 2.797
Gains/(Losses) from the sale and valuation of
trading investments (550) 850
1.829 3.647
25

Laiki Bank (Hellas) Α.Ε.
31 December 2006
9. STAFF COSTS
(Amounts in thousands of Euro)
2006 2005
Wages and salaries (21.681) (19.086)
Social security contributions (4.700) (4.163)
Defined benefit plan expense (Note 29) (164) (260)
(26.545) (23.509)
Average number of staff 814 736
10. OTHER OPERATING EXPENSES
(Amounts in thousands of Euro)
2006 2005
Computer maintenance (2.093) (2.100)
Promotion and sales (3.220) (3.043)
Rents and office maintenance (6.961) (6.384)
Postage (563) (939)
Telephones (1.189) (990)
Credit cards (606) (1.207)
Insurance of banking products (1.820) (1.969)
Other expenses (9.528) (6.422)
(25.980) (23.054)
11. INCOME TAX
(Amounts in thousands of Euro)
2006 2005
Current tax (2.311) (1.391)
Deferred tax (Note 21) 1.297 (1.316)
Tax audit differences - (662)
Extraordinary tax on reserves (1.302) -
(2.316) (3.369)
In accordance with Greek tax law and specifically Law 3296/2004, the profits of entities in
Greece are taxed at a rate of 29% at 31 December 2006. At 31 December 2005 the rate was
32% while a further decrease of 25% for the year of 2007 and thereafter.
Income tax statements are reported to the tax authorities on an annually basis, but the gains
or losses that are reported for tax purposes, remain temporarily pending until the tax
authorities audit the tax statements and company books and finalize the respective tax
liabilities. Tax losses, to the degree that are recognized by the tax authorities, can be used
for offsetting of profit of the five coming periods from the current period.
In 2006, after a decision by the Minister, the Bank paid an amount EUR 1.302 thousand which
is 15% of untaxed reserves at 31/12/2006.
26

Laiki Bank (Hellas) Α.Ε.
31 December 2006
The Bank has not been audited by the tax authorities from 2004 to 2006. In 2005, the Bank
was completed the tax audit for the period of 2000 to 2003 by paying an amount of EUR 662
thousand by the Bank. The reconciliation of the effective tax rate is as follows:
(Amounts in thousands of Euro)
2006 2005
Profit before tax 3.176 6.046
Tax according to the nominal tax rate 29% 921 32% 1.935
Non deductible expenses 56% 1.776 35% 2.107
Non taxable income (47%) (1.508) (43%) (2.611)
Tax audit differences - - 11% 662
Extraordinary tax on reserves 41% 1.302 - -
Other (6%) (175) 21% 1.276
Income tax expense 72,9% 2.316 55,7% 3.369
27

Laiki Bank (Hellas) Α.Ε.
31 December 2006
12.
CASH AND BALANCES WITH CENTRAL
BANK
(Amounts in thousands of Euro)
2006 2005
Cash 17.103 11.517
Other placements with Central Bank 56.782 66.229
Obligatory reserve deposits with the
Central Bank 52.768 49.326
126.653 127.072
For reporting purposes of cash flows, cash and cash equivalents are those with maturity less
than 90 days.
(Amounts in thousands of Euro) 2006 2005
Cash 17.103 11.517
Other placements with the Central Bank 109.550 115.555
Loans and advances to banks 592.348 501.359
719.001 628.431
13. LOANS AND ADVANCES TO BANKS
(Amounts in thousands of Euro)
2006 2005
Amounts to be collected from other banks 1.761 500
Sale and repurchase agreements (Repos) 8.000 13.600
Placements with banks 582.587 487.259
592.348 501.359
28

Laiki Bank (Hellas) Α.Ε.
31 December 2006
14. DERIVATIVES
(Amounts in thousands of Euro) 2006 2005
Balance at 31 December Fair value Fair value
Foreign exchange derivatives Assets Liabilities Assets Liabilities
Currency forwards 8 3 70 34
Cross currency swaps - 74 7 12
Other derivatives 21 36 61 78
Interest rate derivatives
Interest rate swaps 1.833 - 419 -
Interest and currency swaps 1.216 851 1.315 742
Total amount shown on financial
statements 3.078 964 1.872 866
The Bank uses most of the above derivatives among others, for hedging purposes, but does not fulfill
the criteria of IAS 39 for application of hedge accounting.
15. TRADING SECURITIES
(Amounts in thousands of Euro)
2006 2005
Bank bonds 88 635
Greek Government bonds 39.361 11.531
Other bonds - 2.352
39.449 14.518
16. AVAILABLE-FOR-SALE SECURITIES
(Amounts in thousands of Euro)
2006 2005
Bonds listed on a stock exchange 1.261 -
Mutual Fund units 1.921 1.887
Government bonds 4.183 -
7.365 1.887
29

Laiki Bank (Hellas) Α.Ε.
31 December 2006
17. LOANS AND ADVANCES TO CUSTOMERS
(Amounts in thousands of Euro)
2006 2005
Commercial and services 891.711 742.672
Industry 226.766 290.073
Tourism 141.011 113.188
Constructive 196.529 201.096
Housing 623.160 441.602
Consumer 200.804 148.459
Other 272.924 348.722
2.552.905 2.285.812
Less: Impairment loss (53.934) (50.643)
Net amount 2.498.971 2.235.169
LOSS IMPAIRMENT
(Amounts in thousands of Euro)
2006 2005
Balance at 1 January 50.643 37.063
Impairment charge 28.046 13.580
Write-offs (24.755) -
Balance at 31 December 53.934 50.643
30

Laiki Bank (Hellas) Α.Ε.
31 December 2006
18. INVESTMENTS IN SUBSIDIARIES
(Amounts in thousands of Euro)
The Bank's subsidiaries that operate in Greece at 31 December 2006 are as follows:
Name of company
Ownership
interest %
Book
value
Sector
Laiki Leasing A.E. 100% 18.095 Leasing
Laiki Factoring A.E. 100% 7.276 Factoring
Laiki Attalos Securities S.A. 97,54% 5.346 Financial services
Laiki AEDAK 97,62% 1.913 Mutual fund management
Laiki Life A.E. 100% 3.181 Insurance
Laiki Insurance Agents 100% 182 Insurance
Total 35.993
The Bank's subsidiaries that operate in Greece at 31 December 2005 are as follows:
Name of company
Ownership
interest %
Book
value
Sector
Laiki Leasing A.E. 50% 4.978 Leasing
Laiki Factoring A.E. 50% 2.935 Factoring
Laiki Attalos Securities S.A. 49,80% 3.098 Financial services
Laiki AEDAK 47,63% 891 Mutual fund management
Laiki Life A.E. 50% 1.375 Insurance
Laiki Insurance Agents 50% 90 Insurance
Total 13.367
The increase in the ownership interest during 2006 is due to the acquisition of minority interests in exchange of shares, then Laiki Cyprus Bank LTD owned
in the subsidiaries operating in Greece which took place in 14 April 2006.
31

Laiki Bank (Hellas) Α.Ε.
31 December 2006
19. INTANGIBLE ASSETS
(Amounts in thousands of Euro)
Software
expenses
Cost
Balance at 1 January 2005 4.438
Additions 549
Balance at 31 December 2005 4.987
Balance at 1 January 2006 4.987
Additions 401
Balance at 31 December 2006 5.388
Amortization
Balance at 1 January 2005 3.244
Amortization for the year 785
Balance at 31 December 2005 4.029
Balance at 1 January 2006 4.029
Amortization for the year 602
Balance at 31 December 2006 4.631
Net book value
Balance at 1 January 2005 1.194
Balance at 31 December 2005 958
Balance at 1 January 2006 958
Balance at 31 December 2006 757
32

Laiki Bank (Hellas) Α.Ε.
31 December 2006
20. PROPERTY AND EQUIPMENT
(Amounts in thousands of Euro)
Leasehold
improvements
Future and
equipment
Fixed assets
under
development
Total
Cost
Balance at 1 January 2005 19.070 16.875 1.634 37.579
Additions 1.883 1.306 1.326 4.515
Balance at 31 December 2005 20.953 18.181 2.960 42.094
Balance at 1 January 2006 20.953 18.181 2.960 42.094
Additions 999 2.833 789 4.621
Disposals (343) (1.970) (337) (2.650)
Balance at 31 December 2006 21.609 19.044 3.412 44.065
Depreciation
Balance at 1January 2005 9.697 12.076 - 21.773
Depreciation for the year 1.504 2.475 - 3.979
Balance at 31 December 2005 11.201 14.551 - 25.752
Balance at 1 January 2006 11.201 14.551 - 25.752
Depreciation for the year 1.769 2.681 - 4.450
Disposals (162) (808) (970)
Balance at 31 December 2006 12.808 16.424 - 29.232
Net book value
Balance at 1 January 2005 9.373 4.799 1.634 15.806
Balance at 31 December 2005 9.752 3.630 2.960 16.342
Balance at 1 January 2006 9.752 3.630 2.960 16.342
Balance at 31 December 2006 8.801 2.620 3.412 14.833
33

Λαϊκή Τράπεζα (Ελλάς) Α.Ε.
31 December 2006
21. DEFERRED TAX ASSETS
(Amounts in thousands of Euro)
2006 2005
Opening balance 326 1.642
Movement through profit and loss 1.297 (1.316)
Closing balance 1.623 326
Deferred tax balance derived from:
2006 2005
Deferred tax assets
Valuation of derivatives financial instruments 125 7
Intangible assets write-offs 79 154
Defined benefit obligations 387 332
Other operational expenses and provisions 611 378
Effective interest rate 671 723
Impairment loss for doubtful debts 208 -
2.081 1.594
Deferred tax liabilities
Impairment loss for doubtful debts - (1.067)
Liability from valuation of derivative financial
instruments (458) (201)
(458) (1.268)
Net deferred tax asset 1.623 326
The movement of temporary differences of deferred tax during the year derived from:
Balance at
01.01.2006
Recognized
income
Balance at
31.12.2006
Intangible assets write-offs 154 (75) 79
Post employment benefits 332 55 387
Operational expenses and provision 378 233 611
Valuation of derivatives financial instruments (194) (139) (333)
Impairment loss for doubtful debts (1.067) 1.275 208
Effective interest rate 723 (52) 671
326 1.297 1.623
Balance at
01.01.2006
Recognized
income
Balance at
31.12.2006
Intangible assets write-offs 232 (78) 154
Post employment benefits 304 28 332
Operational expenses and provision 90 288 378
Valuation of derivatives financial instruments (78) (116) (194)
Impairment loss for doubtful debts 585 (1.652) (1.067)
Effective interest rate 509 214 723
1.642 (1.316) 326
34

Λαϊκή Τράπεζα (Ελλάς) Α.Ε.
31 December 2006
22. OTHER ASSETS
(Amounts in thousands of Euro) 2006 2005
Accrued interest income 16.803 15.572
Tax income 2.705 2.526
Prepaid expenses and accrued income 1.251 707
Assets from auctions 275 275
Other assets 4.158 4.345
25.192 23.425
23. DEPOSITS FROM
BANKS
(Amounts in thousands of Euro)
2006 2005
Current deposits from banks 1.874 3.243
Money markets 464.622 280.285
466.496 283.528
24. DEPOSITS FROM CUSTOMERS
(Amounts in thousands of Euro)
2006 2005
Current accounts 249.918 232.072
Savings accounts 300.669 282.951
Term deposits 2.064.151 1.906.804
2.614.738 2.421.827
Balances above include Repos amounted EUR 5.848 thousand (2005: EUR 9.906 thousand).
25. OTHER LIABILITIES
(Amounts in thousands of Euro)
2006 2005
Accrued interest expense 12.462 8.198
Cheque balances 13.486 12.418
Suppliers 3.540 3.135
Taxes and dues to social security funds 2.734 2.513
Amounts due to the Greek State 3.903 2.660
Other liabilities 14.364 10.789
50.489 39.713
26. SHARE CAPITAL
At 31 December 2006 the share capital consists of 6,796,661 shares with nominal value
EUR 14,67 per share, after a share capital increase by EUR 22,358 thousand, with the
issue of 419.551 shares.
35

Λαϊκή Τράπεζα (Ελλάς) Α.Ε.
31 December 2006
27. RESERVES
(Amounts in thousands of Euro)
2006 2005
Statutory reserve 1.708 1.708
Extraordinary reserve 2.894 2.894
Taxed reserves of special purposes 8.933 -
Untaxed reserve - 6.930
Special tax reserve - 2.003
Available-for-sale reserve (1.106) 43
Other reserves 51 51
12.480 13.629
a) Statutory reserve: Under the provisions of corporate law, entities are required to transfer
5% of their annual profits to a statutory reserve until the reserve equals one third of the issued
capital. This reserve is not available for distribution but may be applied to cover losses. The
shareholders in the General Meeting will decide about the formation of statutory reserve
during 2007.
b) Untaxed reserves: In accordance with tax law certain types of income and profits are not
taxed if retained and recorded to a specific reserve account. In the event that the reserves
are distributed they will be tax at the rate applicable on the date of distribution. During the
period, the Bank paid as extraordinary tax, amount EUR 1.302 thousand on tax free reserves.
c) Available-for-sale: This reserve includes the total charge of fair value of available for sale
till those will be sold or improved.
d) Other reserves: Include the remaining reserves that do not belong to the categories above.
28. EARNINGS PER SHARE
(Amounts in thousands of Euro)
2006 2005
Net profit 860 2.677
Average number of shares negotiated 6.496.981 6.077.430
Basic earnings per share (in Euro) 0,13 0,44
Diluted earnings per share (in Euro) 0,13 0,44
Basic and diluted earnings per share arises from the allocation of profits after tax to the
Bank's shareholders with the weighted average of ordinary shares during the period.
Subtracted by weighted average of ordinary shares during the period mentioned above. The
increase of weighted average of ordinary shares by 419.551 is due to the increase in share
capital 2006.
36

Λαϊκή Τράπεζα (Ελλάς) Α.Ε.
31 December 2006
29. EMPLOYEE DEFINED BENEFITS
The Bank has a defined benefit plan whereby as required, by law, it must pay a lump sum to
employees upon retirements depending upon the employee's length of service and salary on
the date of retirement.
For this reason the Bank based on the projected unit credit method, provisions in respect of
this defined benefit plan, is the present value amount of future benefit at every employee’s
retirement based upon an actuarial method as this has been determined by the number of
years of the recognized service
For the calculation of the obligation, in respect of this defined benefit plan, the type and the
form of the increased benefit is used, as defined by law and taking into consideration the
maximum amounts, other limitations ( wage of non-specialized employee, type of labour, type
of contract agreement, existence or not of cash account), and individual information of the
beneficiary (date of hiring, age, sex, years of service, retirement age, monthly salary, and
months of its payment).
In addition, the cause of exit from service, such as death, or the voluntary exit or dismissal,
the average annual future salary increase, and the discount rate which the yield at the
balance sheet date on Greek State bonds that have maturity dates approximating the terms of
the Bank's obligations are also taking into consideration.
The calculation is performed by an independent qualified actuary using the projected unit
method less the fair value of any plan assets and adjusted for unrecognized gains or losses
and past service costs.
According to the actuarial study the following are applied:
(Amounts in thousands of Euro)
Description 2006 2005
Present value of unfunded obligation 1.550 1.326
Balance sheet liability 1.550 1.326
The movement is as follows:
2006 2005
Defined benefit obligation as at 1 January 1.326 1.013
Movement for the period 224 313
Defined benefit obligation as at
31 December 1.550 1.326
Charge recognized in the income
statement
Current service costs (salaries and staff
costs) 164 260
Interest 60 53
Total 224 313
37

Λαϊκή Τράπεζα (Ελλάς) Α.Ε.
31 December 2006
The basic principles for which the actuarial used are as follows:
Actuarial study 2006 2005
Discount rate 3,9% 3,9%
Percentage of future salary increase 3,0% 3,0%
The Bank also pays employee contributions to social security funds. The Bank's obligation
ends with the payment of every contribution. Employee contributions are recognized as staff
costs by applying the principle of accrual expenses. Any prepaid expenses are recognized as
claims only if there is a cash return or future reduction in the contribution.
30. CONTINGENT LIABILITIES
30.1 Litigation
At 31 December 2006 the risks that may arise from pending litigation are estimated and
provisions for the coverage of possible losses were recognized amounted EUR 690 thousand.
30.2 Credit commitments
The contractual amounts of the Bank's off-balance sheet financial instruments that commit to
extend credit to customers are as follows:
(Amounts in thousands of Euro) 2006 2005
Letters of guarantee 160.967 151.253
Letters of credit 6.989 3.845
30.3 Operating leases
The Bank's commitment from lease contracts refer mainly to buildings used for its branches
and other operating units. The future minimum lease payments under operating lease is
EUR 1.733 thousand.
38

Λαϊκή Τράπεζα (Ελλάς) Α.Ε.
31 December 2006
31. RELATED PARTIES
The Bank is a subsidiary of Marfin Popular Bank Ltd, which owns Marfin Bank S.A.
The transactions with related parties are as follows:
Related parties
(Amounts in thousands of Euro)
Balance at 31 December 2006
Marfin
Bank
Marfin
Popular
Bank Ltd
Subsidiaries
Board of the
Directors
and
Management
Loans and advances to banks - 20.093 - -
Loans and advances - - 281.103 1.993
Other assets 45 - 15 -
Deposits from banks 65.081 87.740 - -
Deposits from customers - - 23.122 307
Other liabilities 86 722 521 -
Interest income - 419 11.039 -
Interest expense - 3.323 460 -
Other income - - 1.026 -
Other expense - 252 2.306 -
Salaries and other fees - - - 1.321
Balance at 31 December 2005
Marfin
Bank
Marfin
Popular
Bank Ltd
Subsidiaries
Board of the
Directors
and
Management
Loans and advances to banks - 521 - -
Loans and advances - - 280.082 8.278
Other assets - - 155 -
Deposits from banks - 122.450 - -
Deposits from customers - - 11.418 2.199
Other liabilities - 395 173 -
Interest income - 537 8.969 -
Interest expense - 3.442 303 -
Other income - 1.003 -
Other expense - 503 2.038 -
Salaries and other fees - - - 1.170
39

INDEPENDENT AUDITOR'S REPORT
(Translation from Greek to English)
To the Shareholders of
LAIKI BANK A.E
Report on the Financial Statements
We have audited the accompanying financial statements of LAIKI BANK A.E, which
comprise the balance sheet as at 31 December 31 2006, and the income statement,
statement of changes in equity and cash flow statement for the year then ended, and a
summary of significant accounting policies and other explanatory notes.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial
statements in accordance with International Financial Reporting Standards as adopted
by the European Union. This responsibility includes: designing, implementing and
maintaining internal control relevant to the preparation and fair presentation of financial
statements that are free from material misstatements, whether due to fraud or error;
selecting and applying appropriate accounting policies; and making accounting
estimates that are reasonable in the circumstances.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our
audit. We conducted our audit in accordance with Greek Auditing Standards, which are
based on the International Standards on Auditing. Those standards require that we
comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts
and disclosures in the financial statements. The procedures selected depend on the
auditor's judgment, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's preparation
and fair presentation of the financial statements 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 entity's internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.

Opinion
In our opinion, the financial statements give a true and fair view of the financial position
of LAIKI BANK A.E. as of 31 December 2006, and of its financial performance and its
cash flows for the year then ended in accordance with International Financial Reporting
Standards as adopted by the European Union.
Without qualifying our opinion we draw attention to note 12 to the financial statements,
that explains that the tax obligations of the Bank have not yet been audited by the tax
authorities and accordingly its tax obligations for those years are not considered final.
The outcome of a tax audit can not presently be determined.
Report on Other Legal and Regulatory Requirements
The content of the Report of the Board of Directors is consistent with the
accompanying financial statements.
Athens, 22 March 2007
KPMG Kyriacou Certified Auditors A.E.
Nick Vouniseas
Certified Auditor Accountant
AM SOEL 18701