Piraeus Bank, fully aware of Greek fiscal challenges and confident in the success of the 3-year EU/IMF fiscal stability program already underway, considers that the current timing provides opportunities and momentum for bold investment initiatives.

In this context, and after a thorough analysis that confirmed the viability and the prospects of the project, Piraeus Bank made in the framework of privatizations legislation, an offer to the Greek State to concurrently acquire 77.31% of Agricultural Bank of Greece S.A. and 33.04% of the Hellenic PostBank S.A., both currently owned by the Greek State. 

The objective of the initiative is the creation of a large banking group with (pro forma) assets exceeding €105 bn, a net loan portfolio of €69 bn, and €64bn in deposits. The new financial group formed by the consolidation of the three banks will control the leading market shares in both loans and deposits in Greece and become the second biggest Greek financial group in the region. The aggregate price offered is EUR 701 mn (EUR 372 mn for ABG and EUR 329 mn for TT).

The creation of the new financial group will benefit the shareholders of all three banks due to the size attained: economies of scale will yield annually about €300 mn savings for three years (€200-€220 mn from cost reduction and €80-€100 mn from revenue synergies). After the proposed combined acquisition the new financial group will have proforma capital adequacy ratio at the level of 9% and a strong liquidity position. (Loans to Deposits ratio will be at 98%, without including self-finance loans)

Piraeus Bank, has an extensive track record in successful and cost effective mergers and acquisitions on a national and international level. With this offer it intends to:

• Play a leadership role in the restructuring of the banking system;
• Participate in the mobilization of the economy and the improvement of the business environment;
• Relay a positive message to the international markets on the prospects and competitiveness of the Greek financial system and the Greek economy;
• Create value from the momentum and economies of scale for the clients, employees, stockholders of the three banks, and for the State as well.

With the creation of the new group, Piraeus Bank particularly aims to:

• Introduce competitive business practices in the agricultural sector;
• Become the Bank of choice for the fastest expanding sector of the economy, Green Business;
• Leverage the complementarity of the three banks’ client bases;
• Broaden the services offered to the SME sector;
• Offer its state-of-the-art e-banking platform to a much larger client base.

Piraeus Bank, based on its long established relationship of trust with its clients (medium and small businesses and households), aspires with this offer to become the leading bank in agriculture and Green Business and at the same time build upon the deep-rooted loyalty that Hellenic PostBank has built with Greek depositors.

After the consolidation is complete, the new group (under a name that will reflect the fusion of the three banks and their traditions) will continue to operate with the civic responsibility that Piraeus Bank has shown in corporate governance, environment protection, cultural affairs (through its Piraeus Bank Group Cultural Foundation) and in the support of vulnerable social groups.

As far as the employees are concerned, Piraeus Bank has consistently proven during years of mergers and acquisitions locally and internationally that it respects and protects employees’ rights and employment levels.

Finally, regarding the industrial subsidiaries of AGB (Dodoni, ELBIZ and SEKAP), Piraeus Bank is proposing to enter into long-term concession agreements with cooperative entities that will be established for this purpose, should they so agree, in order to operate the undertakings. Their only obligation will be to maintain the buildings and equipment functional and in good condition, so that these enterprises will continue to operate to the benefit of the local communities.

Athens, 15 July 2010