Stock options lei 12973

Date of event requiring this shell company report. Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing: If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Historically, Greek law prohibited banks from engaging directly in financial service activities outside their traditional deposit and loan functions.

Therefore, specialized financial institutions were established in Greece, each for the provision of a particular type of financial service. A Greek bank that sought to provide multiple financial services to its customers would establish several subsidiaries, each a specialized institution within the bank's integrated group of diverse financial services companies. As a consequence of this historical practice, the Greek financial services sector today is characterized by a group of specialized companies established around a principal bank.

The Bank and its consolidated subsidiaries, collectively, are referred to in this Annual Report as the "NBG Group" or the "Group".

All references in this Annual Report to "we", "us" or "our" are, as the context requires, to the Bank or to the NBG Group as a whole. Currency and Financial Statement Presentation. The NBG Group operates in many countries and earns money and makes payments in many different currencies. Solely for convenience, this Annual Report contains translations of certain euro amounts into U. These are simply convenience translations and you should not expect lei a euro amount actually represents a stated U.

In this Annual Report, the translations of euro amounts into U. Similar convenience translations, such as translations of South African rand, Cyprus pounds, Macedonian dinars, Bulgarian leva, Romanian lei, Serbian dinar and Turkish new lira into U.

The table below sets out the highest and lowest exchange rate between the euro and the U. The following table sets forth the average exchange rates between the euro and the U. The following exchange rates have been calculated using the average of the Noon Buying Rates for euro on the last day of each month during each of the past five annual periods.

Special Note Regarding Forward-Looking Statements. This Annual Report includes forward-looking statements. Such statements can be generally identified by the use of terms such as "believes", "expects", "may", "will", "should", "would", "could", "plans", "anticipates" and comparable terms and the negatives of such terms. By their nature, forward-looking statements involve risk and uncertainty, and the factors described in the context of such forward-looking statements in this Annual Report could cause actual results and developments to differ materially from those expressed in or implied by such forward-looking statements.

We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about the Group, including, among other things: We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this Annual Report might not occur. Any statements regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future.

Readers are cautioned not to place undue reliance on such forward-looking statements, which are based on facts known to us only as of the date of this Annual Report. These financial statements have been prepared in accordance with United States generally accepted accounting principles "U.

GAAP" and have been audited by our principal auditors. GAAP Financial Statements" included elsewhere in this Annual Report. The number of shares as adjusted to reflect changes in capital is presented in the following table: Under Greek law, the Bank can pay dividends out of: The remaining undistributed dividend must then be transferred to a special reserve which, within four years following the Bank's general meeting of shareholders the "General Meeting of Shareholders"must be distributed in the.

Calculation of all such amounts is based on the financial statements of the Bank prepared in accordance with IFRS. Any distribution of distributable profits in excess of the required dividend payments described above must be approved by a General Meeting of Shareholders, with ordinary quorum and majority voting requirements, following a proposal of the Bank's board of directors which we refer to in this Annual Report as the "Board of Directors" or the "Board".

No distribution can be effected if, on the closing date of the last financial year, the total shareholders' equity is, or will become after that distribution, lower than the total of the Bank's share capital and the reserves, the distribution of which is prohibited by Greek law or the Bank's Articles of Association. In any event, dividends may not exceed net profits for the last financial year, as increased by distributable reserves, the distribution of which is permitted as resolved at the General Meeting of Shareholders, and profits carried forward from previous years, and as decreased by any loss in the previous financial year and any compulsory reserves required by law or the Bank's Articles of Association.

Once approved, dividends must be paid to shareholders within two months of the date on which the Bank's annual financial statements are approved. Normally, dividends are declared and paid in the year subsequent to the reporting period. The following table sets forth the actual dividends declared by the Bank for the corresponding periods and the dividends as a percentage of previous year's net income, based on IFRS net income.

The Bank currently expects to continue to pay dividends in accordance with the formula described above, subject to the financial condition of the Bank, the funding needs of our investment program and other relevant considerations.

Reasons for the Offer and Use of Proceeds. If you are considering purchasing our shares or American Depositary Receipts, you should carefully read and think about all the information contained in this document, including the risk factors set out below, prior to making any investment decision.

Risks Relating to Our Business. The state of the political and economic environment, particularly in Greece, significantly affects our performance. As a result, the state of the Greek economy significantly affects our financial performance as well as the market price and liquidity of the Bank's shares.

To an increasing extent, our performance is affected by the economic conditions and levels of economic activity in other countries in which we operate, especially Turkey, from which Consequently, an economic slowdown, a deterioration of conditions in Greece or other adverse changes affecting the Greek economy or the economies of other stock in which we operate, could result in, among other things, higher rates of. Finally, global economic conditions such as the level and liquidity of the global financial and other assets markets, investor sentiment and the availability and cost of credit may adversely affect our business, results of operations or financial condition.

Operating in Turkey carries specific macroeconomic and political risks. As a result of our acquisition of Finansbank A. We conduct significant international activities and are expanding in emerging markets. Apart from our operations in Greece and Turkey, we have built up substantial operations in Bulgaria, Romania, the Former Yugoslav Republic of Macedonia "FYROM"Serbia and other developing economies.

Our international operations are exposed to the risk of adverse political, governmental or economic developments in the countries in which we operate. In addition, most of the countries outside Greece in which we operate are emerging markets where we face particular operating risks.

These factors could have a material adverse effect on our business, financial condition and results of operations. Our international operations also expose us to foreign currency risk. A decline in the value of the currencies in which our international subsidiaries receive their income or hold their assets relative to the value of the euro may have an adverse effect on our financial condition and results of operations.

We are actively pursuing expansion of our international market position, principally through acquisitions in SEE, Eastern Europe and the Southeastern Mediterranean region. We are currently evaluating a number of acquisition candidates in these regions and, consequently, we anticipate that our operations and our shareholders will increasingly be exposed to risks associated with acquisitions generally, as well as specific risks relating to business operations in these emerging markets.

Volatility in interest rates may negatively affect our net interest income and have other adverse consequences. Interest rates are highly sensitive to many factors beyond our 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 we charge on our interest-earning assets differently than the interest rates we pay on our interest-bearing liabilities. This difference could reduce our net interest income. Since the majority of our loan portfolio effectively reprices in five years or less, rising interest rates may also result in an increase in our allowance for loan losses if customers cannot refinance in a higher interest-rate environment.

Further, an increase in interest rates may reduce the demand for loans and our ability to originate loans. Conversely, a decrease in the general level of interest rates may adversely affect us through, among other things, increased pre-payments on our loan and mortgage portfolio and increased competition for deposits.

Likewise, a decrease in interest rates may affect our ability to issue mortgage-backed securities, securitize parts of our balance sheet or otherwise issue debt securities. Our lending margins may decline. The Greek banking industry has historically enjoyed high loan margins compared to other EU member states. However, as Greece's economy converges with those of other countries in the European Union, margins have been declining.

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 are expected to result in lower margins with respect to consumer loans and credits for banks operating in Greece. A further decline in lending margins would have a negative impact on our results from operations.

We face significant competition from Greek and foreign banks. Deregulation 12973 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. We also face competition from foreign banks, some of which have resources significantly greater than our own. We may not be able to continue to compete successfully with domestic and international banks in the future.

Changes in the competitive environment in Turkey may adversely affect Finansbank's business. Increased competition from existing competitors or from new entrants to the Turkish market could limit Finansbank's ability to grow or to maintain its market share and could cause downward pressure on margins, which could adversely affect the Group's ability to meet its strategic objectives in Turkey.

At the same time, convergence with the economies of existing EU member states could result in decreasing interest rate levels in Turkey, which could lead to a decline in Finansbank's interest margins. Our ability to reduce staff in Greece is limited. Part of our strategy is to increase profitability by making our operations more efficient. Our ability to realize one component of this, reducing staff, is limited by Greek labor laws, our company collective agreement, current employment regulation and our desire to maintain good relations with our employees.

As a result, we will continue to depend on voluntary redundancies and attrition to achieve staff reductions. We will continue to assess whether we will be able to reduce our staff. However, we may not always be successful in achieving such reductions. The loss of senior management may adversely affect our ability to implement our strategy. Our current senior management team includes a number of executives that we believe contribute significant experience and expertise to our management in the banking sectors in which we operate.

The continued success of our business and our ability to execute our business strategy will depend, in large part, on the efforts of our senior management. If a substantial portion of our senior management leaves us, our business may be materially adversely affected. Our growth depends, in part, on our ability to continue to attract, retain and motivate qualified and experienced banking and management personnel.

Competition in the Greek and other SEE banking industries for personnel with relevant expertise is intense, due to the relatively limited availability of qualified individuals. To recruit qualified and experienced employees and to minimize the possibility of their departure, we provide compensation packages consistent with evolving standards in the relevant labor markets.

However, inability to recruit and retain qualified and experienced personnel in Greece and SEE, or manage our current personnel successfully, could have a material adverse effect on our business, financial condition, results of operations or prospects. We could be exposed to significant future pension and post-retirement benefit liabilities.

In common with other large companies in Greece that are, or were, in the public sector, the employees of the Bank and certain of our subsidiaries participate in employee-managed pension schemes. The Bank and certain of our subsidiaries make significant contributions to these schemes.

In addition, the Bank and several of our subsidiaries offer other post-retirement benefit plans, including medical benefit plans. Such variation may cause us to incur significantly increased liability in respect of. Although the Bank has contested these payments as unfair compared to those imposed to other banks and has reserved all legal rights, it may be unsuccessful in these efforts.

In addition, in andthe Hellenic Republic passed legislation permitting bank employee auxiliary pension schemes to merge with the new Insurance Fund of Bank Employees "ETAT". The relevant legislation provides that, in connection with the merger of auxiliary schemes with ETAT, the relevant employer shall make a payment to ETAT solely in an amount to be determined by an independent financial report commissioned by the Ministry of Finance pursuant to this legislation.

It is possible that we may have a future requirement to make a significant cash payment to ETAT in connection with the merger of the Bank's employee pension schemes with ETAT. The foregoing developments, as well as future interpretations of existing laws and any future legislation regarding pensions and pension liabilities or other post-retirement benefit obligations, may increase the liability of the Bank or its subsidiaries with respect to pension and other post-retirement benefit plan contributions to cover actuarial or operating deficits of those plans.

The Greek banking sector is subject to strikes. Most of our employees belong to a union and the Greek banking industry has been subject to strikes, mainly over the issues of pensions and wages. Prolonged labor unrest could have a material adverse effect on the Bank's operations in Greece. Non-performing loans have had a negative impact on our operations and may continue to do so.

Non-performing loans represented approximately 3. As a result of certain tax and legal considerations, non-performing loans generally remain on our balance sheet significantly longer than for other banks in the EU. Our 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 our loan assets and mitigate future allowances for loan losses. However, we cannot assure you that these credit approval and 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 effect on our operating results. In addition, a downturn in the global economy would potentially result in a higher proportion of non-performing loans. We are exposed to credit risk, market risk, liquidity risk, operational risk and insurance risk. As a result of our activities, we are exposed to a variety of risks, among the most significant of which are credit risk, market risk, liquidity risk, operational risk and insurance risk.

Failure to control these could result in material adverse effects on our financial performance and reputation. Deteriorating asset valuations resulting from poor market conditions may adversely affect our future earnings. In recent years, Greece and the SEE have experienced rapid expansion in the retail and residential mortgage credit markets. An economic slowdown or increase in real interest rates in these countries could result in an increase in non-performing loans and significant changes in the fair values of our exposures.

Severe market events, as exemplified by recent events affecting asset-backed CDO's, the US sub-prime residential mortgage market and leveraged finance, are difficult to foresee and, if they occur. Moreover, an increase in market volatility or adverse changes in the liquidity of our assets could impair our ability to value certain of our assets and exposures.

Valuations in future periods, reflecting then-prevailing market conditions, may result in significant changes in the fair values of these assets and exposures. In stock, the value ultimately realized by us will depend on the fair value as determined at that time and may be materially different from the current or estimated fair value.

Any of these factors could require us to recognize write-downs or realize impairment charges, any of which may adversely affect our financial condition and results of operations.

We may incur significant losses on our trading and investment activities due to market fluctuations and volatility. We maintain 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 we use, including swaps, futures, options and structured products.

Our hedging may not prevent losses. If any of the variety of instruments and strategies that we use to hedge our exposure to various types of risk in our businesses is not effective, we may incur losses. Many of our strategies are based on historical trading patterns and correlations. Unexpected market developments therefore may adversely affect the effectiveness of our hedging strategies.

Moreover, we do not hedge all of our 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 our reported earnings.

An interruption in or a breach of security in our information systems may result in lost business and other losses. We rely on communications and information systems provided by third parties to conduct our business. We cannot provide assurances that such failures or interruptions will not occur or, if they do occur, that they will be adequately addressed. The occurrence of any failures or interruptions could result in a loss of customer data and an inability to service our customers, which could have a material adverse effect on our reputation, financial condition and results of operations.

State-related entities may have an important influence on the Bank. Our Articles of Association do not provide any special voting rights to any class of shares or shareholders and there is no law in Greece that gives control over the Bank to the Hellenic Republic. However, if there is not a full voting participation by all of our shareholders at a given shareholders' meeting, these state-related entities, despite holding a minority of our total shares, may have a voting.

For instance, this could allow them to influence the election of members of our Board of Directors. Future acquisitions may result in unexpected losses. Typically, when we acquire a banking business, we acquire all of its liabilities as well as its assets. Our acquisition procedures may fail to identify all actual or potential liabilities of a company prior to its acquisition, and we may be unable to obtain sufficient indemnities to protect ourselves 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 our results of operations and financial condition. Risks Relating to Our Industry.

Regulation of the 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 Augustthe EU Directives regarding the adoption of the new Basel Capital Accord "Basel II" were incorporated into Greek law relating to the business of credit institutions and to the capital adequacy of investment firms and credit institutions.

We 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. The banking regulations in Turkey are evolving parallel to the global changes and international regulatory environment. Even though no official statements have been made, we expect the local regulations regarding Basel II to be published within ; requiring banks to be Basel II standardized approach-compliant by the beginning of Adopting the Basel II standardized approach will decrease the capital requirement for the retail loans; whereas corporate and commercial loans will be adversely affected.

We cannot predict the timing for the advanced methods of Basel II; however we have already started working on developing and implementing the models required for advanced approaches. If we are required to make additional significant provisions or increase our reserves, as may result from potential regulatory changes, this could adversely affect our financial condition or results of operations.

Risks Relating to the Markets. Exchange rate fluctuations could have a significant impact on the value of our shares. The market price of our shares traded on the Athens Exchange "ATHEX" is denominated in euro. Fluctuations in the exchange rate between the euro and other currencies may affect the value of the Bank's shares in the local currency of investors in the United States and other countries that have not adopted the euro as their currency.

Additionally, cash dividends on our shares are paid in euro and, therefore, are subject to exchange rate fluctuations when converted to an investor's local currency, including U. The ATHEX is less liquid than other major exchanges. The principal trading market for our shares is the ATHEX.

The ATHEX is less liquid than major stock markets in Western Europe and the United States. As a result, shareholders may have difficulty assessing the past performance of the shares based on our prior trading record on the ATHEX. We cannot make assurances about the future liquidity of the market for our shares. Our share price has been, and may continue to be, volatile.

The market price of our shares has been subject to volatility in the past, and could be subject to wide fluctuations in response to numerous factors, many of which are beyond our control. These factors include the following: The exercise of pre-emptive rights may not be available to U.

Under Greek law and our Articles of Association, prior to the issuance of any new shares, we must offer holders of our existing shares pre-emptive rights to subscribe and pay for a sufficient number of shares to maintain their existing ownership percentages. These pre-emptive rights are generally transferable during the rights trading period for the related offering and may be traded on the ATHEX.

In addition, their proportional ownership interests in the Bank will be diluted. History and Development of the Company. The Bank's headquarters and our registered office are located at 86 Eolou Street, Athens, Greece. During that time, our business has expanded to become a large, diversified financial services group that today comprises the NBG Group. Until the establishment of the Bank of Greece as the central bank of Greece inthe Bank, in addition to commercial banking activities, was responsible for issuing currency in Greece.

In Decemberthe Bank fully acquired and integrated the operations of the National Bank for Investment and Industrial Development "ETEBA"an investment bank that was a majority-owned subsidiary of the Bank. The Bank intends to expand through organic growth, and to continue to evaluate acquisition, joint venture and partnership opportunities as they arise.

In keeping with this strategy, we have expanded our presence in SEE. In Octoberwe acquired Banca Romaneasca in Romania, and in we acquired Eurial, a Romanian automobile leasing company, as well as Alpha Romania Insurance, which we acquired from another Greek bank.

In February we disposed of our subsidiary NBG Canada, and in April we disposed of our subsidiary Atlantic Bank of New York, in line with our strategy to divert from mature markets and focus on emerging markets. In we undertook our largest international acquisition to date. In order to finance our acquisition of Finansbank, we increased our share capital through a rights issue in July by payment in cash with preemptive rights to our existing shareholders at a.

Fiba Sellers retained a residual stake of 9. Fiba Sellers also agreed and undertook to attend any general meetings of Finansbank and to vote such number of shares they then own as is equal to the difference between As a result of Turkish Capital Markets legislation, NBG made a mandatory offer to the minority shareholders of Finansbank. This stake is subject to certain put and call agreements, as provided in the shareholder's agreement between NBG and IFC, exercisable in seven years.

Following the completion of the mandatory tender offer and the sale of shares to the IFC, we have proceeded to acquire further outstanding ordinary shares in Finansbank. As a result, stock cost of the acquisition of Vojvodjanska and net assets at acquisition will increase by this amount. In Octoberwe exercised our minority buy-out option for Vojvodjanska and through a public tender offer acquired 1, common shares at a price of RSD 70 per share. This sale was consistent with our stated strategy to focus on our core banking activities and exit from non-financial participations.

The increased demand for individual pensions in Turkey has created a rapidly growing insurance business for these products.

In MayFinansbank applied to the General Directorate of Insurance in Turkey for, and has received, permission to establish Finans Emeklilik ve Hayat A.

Finans Pension has commenced operations in life and personal accident business. Its purpose will be to explore investment opportunities in capital markets. The table below sets out the Bank's principal items of capital expenditure forand Also, as part of a strategy to streamline our operations, we continue to divest non-core equity investments and real estate that are unrelated to our principal financial services businesses, and to commit the released resources to more profitable activities.

As part of our program of disposing of non-core assets, we have made significant domestic divestitures in the last three years, as summarized. In we also disposed of our subsidiaries Atlantic Bank of New York and NBG Canada as part of our program to focus on emerging markets. No public takeover offers for our shares have been made by third parties during the financial year or the current financial year, as at the date of this Annual Report. We are the largest financial institution in terms of loans to customers and the largest company by market capitalization in Greece, according to our analysis of published financial statements of Greek banks.

Our core focus outside Greece is in Turkey and SEE, where we currently operate in Bulgaria, Serbia, Romania, Albania, Cyprus and FYROM. Altogether, we have a presence in 12 countries outside Greece. We offer our customers a wide range of integrated financial services, including: In addition, we are involved in various other businesses, including the hotel business, property management and real estate business and IT consulting.

The Bank is our principal operating company, representing The Bank's liabilities, represent While the Bank conducts most of our banking activities, it is supported by seven foreign banking subsidiaries: We intend to continue to expand our operations in SEE, Eastern Europe and the Southeastern Mediterranean region.

The following table summarizes our assets, net income before tax, income tax expense and depreciation, amortization expense and revenues under U. GAAP attributable to our banking and other operations, showing the relative contributions of Greek and foreign activities. Our business and revenues are not materially affected by seasonal variations. According to our analysis of publicly available financial statements of Greek commercial banks, the Bank is the largest commercial bank in Greece in terms of assets, deposits, loans and number of branches.

We are one of the most diverse financial services groups in Greece according to our analysis of the published financial statements of Greek banks. According to this analysis, in addition to our banking activities, we are currently the largest and most active participant by volume in the national electronic dealing system of Greek Government bonds.

We estimate that we have approximately We are also a leader in providing many other financial services in Greece. For example, we are the largest mortgage lender and the largest insurance operator in terms of revenuesone of the leading. Greek underwriters of domestic equity securities and one of the leading providers of securities trading services. We use a variety of marketing and distribution channels to maintain and enhance our market position, including telemarketing particularly for credit card salesradio, television, press and internet advertising and distributing promotional information brochures in our branches.

As part of our marketing strategy, we seek to capitalize on our existing relationships with individual customers through cross-selling efforts aimed at increasing such customers' awareness of other products that are offered by Group companies. For instance, our mortgage customers are informed of our insurance products, through which they may insure against damage to their property and against events and circumstances that might cause them to default on their mortgage loans.

Our marketing strategy also includes indirect marketing, pursuant to which we have entered into agency agreements with retailers, such as automobile dealers and electronics chain stores, who agree to offer our consumer loan products to their customers in connection with purchases of consumer goods. In addition, we employ various alternative distribution methods, such as cooperation with real estate agents and construction businesses in the sale of mortgage loans and with accountants and consultants in the sale of small business loans.

We have also entered into contractual arrangements with mobile telephone service providers in Greece that enable us to offer to our customers certain banking services, such as balance inquiries, through their mobile telephones. We provide certain banking services over the internet, including the transfer of funds between accounts, balance inquiries, bill payments, stock brokerage and subscription to initial public offerings on the ATHEX.

Overview of the Banking Services Sector in Greece. The banking sector has expanded rapidly in recent years, due to both deregulation and technological advances.

Traditionally, commercial banks have dominated the Greek financial services market. However, specialized credit institutions have expanded into commercial banking as a result of significant liberalization of the Greek financial services industry, thereby increasing competition in the market. The distinction between commercial and investment banks 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 proceeded to privatize a large number of credit institutions. For example, inthe Hellenic Republic privatized the Bank of Central Greece and Creta Bank, in earlyIonian Bank, and, in MarchETBA, an ATHEX listed industrial development bank. Moreover, the Hellenic Republic proceeded with the partial privatizations of the Postal Savings Bank and ATE Bank through the listing of their shares on the ATHEX.

In addition, since SeptemberBanco. Commercial Portuguese, a Portuguese bank, has been active in the Greek market through Millennium Bank. Although there are currently 17 Greek private universal banks incorporated in Greece, there has been a recent trend towards consolidation. EFG Eurobank merged with Telesis Bank in early and with UnitBank in December The Piraeus Group subsequently acquired a ETBA was merged entirely into the Piraeus Group in December In Decemberthe Bank merged with ETEBA our investment banking arm.

InEgnatia 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 SEE.

In addition to the Bank's acquisition of controlling stakes in Finansbank and Vojvodjanska during and the first months ofother Greek banks have proceeded with acquisitions of banks in the region.

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 our principal foreign competitors in Greece, include Citibank, Bank of Cyprus, Royal Bank of Scotland and HSBC. With the exception of Bank of Cyprus, Citibank and HSBC, the majority of foreign banks operating in Greece have little presence in retail banking services. The only remaining specialized credit institution is the Consignment Deposits and Loans Fund, which is an autonomous financial institution, organized 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 kindthe granting of housing loans to qualifying borrowers primarily civil servants and the support of regional development. As of AprilGreek law allows non-banking institutions that 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.

Inthe macroeconomic performance of the SEE countries in which we have a presence Albania, Bulgaria, Romania, Serbia, Cyprus and FYROM and Turkey remained strong, despite adverse external and domestic conditions. In particular, economic activity, although decelerating, remained robust. Real GDP growth rate stood at 6. In both cases, the high growth rates reflected the systematic implementation of structural and institutional reforms in the context of the region's European orientation and the expansion of financial intermediation.

In addition, the inflation rate declined in Turkey to 8. In SEE, inflation increased to 7. In contrast, the already high current account deficit in SEE widened to In Turkey, the current account deficit narrowed to 5. However, more than half of the current account gap in SEE and Turkey was covered by non-debt generating Foreign Direct Investment "FDI" inflows despite the ongoing global liquidity crisis which began in August Financial Intermediation in SEE.

Indespite high interest rates and slowing economic activity, banking intermediation in SEE expanded further, mainly due to the relaxation of measures designed to contain credit expansion in Bulgaria and Romania, the two new EU member states admitted in January and greater confidence in the banking sector.

Loans and deposits recorded impressive growth rates of Lending to households remained the main driver of credit activity in SEE as a whole, growing by Developments in the Turkish 12973 System. Infinancial intermediation in Turkey expanded, despite a slowdown in economic activity and high interest rates. Bank deposits and loans increased by Most of our banking business is domestic and includes retail, commercial and investment banking. The Group's Greek domestic operations account for We believe that the Bank has a strong competitive advantage in attracting domestic deposits from retail and corporate clients due to the: Greek Banking Distribution Channels.

The Bank has approximately 2. In addition, the Bank has developed alternative distribution channels, such as an e-banking platform targeted at both corporate and retail clients. Inapproximately 80, new corporate and retail clients were connected through our internet banking services, with the total number of users reachingTotal number of transactions during was approximately Also ina new Contact Center, through which the Bank provides 12973 and transaction services through the use of a voice portal and a manned help desk began operation.

The Bank's branches are located in almost every major city and town in Greece. The Bank is engaged in a continuous process of rationalizing the organization of our branch network in order to reduce costs, primarily by centralizing back-office functions to free more employees to work on sales activities directly with customers.

The first phase of the reorganization, which was completed inaimed at turning branches into product-focused sales outlets to improve customer service. In addition, the Bank is continuing to consolidate redundant branches in order to maintain equivalent geographic coverage at a lower cost.

DIAS Interbanking Systems provides interbank services such as check clearing, ATM networking, fund transfers, payroll and pension services for the benefit of customers of shareholder-participants. All of our retail banking activities in Greece are conducted by the Bank. The Bank offers retail customers a number of different types of deposit and investment products, as well as a wide range of traditional services and products. Our Approximate Retail Market Share in Greece. Despite small decreases in market share in retail lending, the Bank maintained a strong market position and stock.

The Bank's management believes that we have significant competitive advantages over other banks offering retail banking services in Greece, including our strong corporate image and name recognition in Greece, our large customer base and our extensive network of branches and ATMs.

In addition, the Bank continues to develop other channels of distribution, such as mobile telephone banking and internet banking. These advantages help the Bank to access the largest and most diverse depositor base in Greece, providing the Bank with a large, stable and low-cost source of 12973. The Bank places particular emphasis on continuing to improve the speed and flexibility of our services to our retail customers. The Bank's strategy for accomplishing these goals has included: The Bank offers a wide range of products in an effort to meet the financial service needs of retail customers and to make it a leader in the consumer banking industry in Greece.

Our focus is on debt consolidation products, fixed term personal loans and car loans. The products incorporate loyalty and reward characteristics. Our savings and investment products are offered in both euro and foreign currencies. In response to customer demand, the Bank offers investment products with higher yields. These products include repurchase agreements between the Bank and our clients backed by Greek Government bondsGreek Government bonds from the Bank's proprietary portfolio, capital guaranteed-principal products and a wide range of mutual funds and unit trust products provided by Diethniki Mutual Fund.

The Bank holds a leading position in consumer retail banking in Greece, according to data published by the Bank of Greece, and offers its customers a wide range of credit cards, personal and consumer loans as well as personal lending arrangements through third party retailers.

The consumer credit sector has grown significantly in recent years. New production for the year overall was also impressive. The number of new credit cards more than doubled while the number of new open and revolving credit accounts grew by Inwe focused on increasing our customer base through the expansion of sales channels, including telemarketing and in store promotion, and the launch of new products such as "My Cash", a new revolving credit product for cash advances.

The credit approval process is centralized 12973 carried out through the use of credit risk rating and measurement systems specifically designed to meet the particular characteristics of the Bank's various loan exposures, such as bespoke credit scorecards, developed on the basis of historical data.

Active credit risk management is options through risk adjusted pricing of products and services as well as through the use of credit risk mitigation techniques. Among other reports, the Bank produces vintage analyses by period of disbursement, issuing channel, and product type for various delinquency definitions, thus continuously ensuring strict monitoring of the scorecards' efficiency and separation power.

Exposures are pooled by application score and delinquency bucket to produce estimates of default probabilities. The Bank utilizes alternative distribution channels such as Fast Line and Mediators, which are becoming increasingly popular with the customers and are acquiring more importance within the Bank.

Fast Line, the telephone service unit of consumer lending, managed more thancalls in and initiated more than 11, new loans. The success of the unit has been instrumental in the growth of consumer lending both in terms of new acquisitions but also as a service and information center for consumer lending customers. The newly established third parties channel of "Mediators" managed more thancalls in and initiated more than 4, new loans.

Also inwe implemented several measures relating to the management of our existing portfolio of credit cards, including the enhancement of our multi-merchant loyalty scheme "Go National" and development of targeted marketing based on customer behavior. As the first Greek bank to introduce chip-based technology, in we completed the migration of our total portfolio to EMV chip cards credit or debit cards containing a computer chip with memory and interactive capabilities.

The Bank is the leading mortgage lender in Greece, with a market share of Mortgage products are offered mainly through the Bank's extensive branch network, although great emphasis is placed in expanding the use of alternative distribution channels like real estate agents, construction companies and insurance brokers.

The Bank offers a wide range of mortgage products, with floating, fixed, or a combination of fixed and floating interest rates. Some products are also offered with a grace period of up to two years or an interest only period of up to five years. Together, these products accounted for less than 1. With interest rates rising in andthe Bank has placed a greater emphasis on the promotion of fixed rate mortgages, for an initial period of up to six years.

Inmortgages with a fixed rate period of two years or more accounted for approximately Mortgages in Swiss francs were introduced in January with similar characteristics to the "ESTIA" loans in Euros, with a very low trigger rate for the first year, and a higher fixed rate for the next three or five years.

After the fixed period, the interest rate becomes floating, using the one-month-LIBOR in Swiss francs as the reference rate, plus a spread. Loans denominated in Swiss francs carry much lower interest rates than those in Euros. An important development regarding the quality of mortgage credit is that, in addition to fire and earthquake property insurance, an optional life insurance plan was offered together with the mortgage. The Bank's mortgage operations have been further enhanced by the upgrading of its credit evaluation process to a more elaborate credit-scoring model in line with Basel II requirements.

Consequently, credit quality will be closely monitored and is expected to further improve. The period required for mortgage approval has been shortened through the use of electronic transfer of applications between its branches and the credit-processing center of the Mortgage Credit Division.

The mortgage underwriting process, including credit approval and granting procedures, is centralized under the Mortgage Credit Division. The rationale behind this organizational structure is to ensure the correct application of credit policy, through a uniform, accurate and consistent decision-making process. Small and Medium Enterprises Division.

The division's purpose is to enhance and personalize services offered to our business clients and particularly to increase the Bank's penetration in the professional and small business segment. It comprises three credit centers in Athens, Thessaloniki and Patras. Since its inception, the SME division has launched lending products for SMEs and professionals, such as: In addition, the Bank continued the promotion of financing products to a wider variety of business categories and freelance professionals such as gas stations, car dealerships, doctors, pharmacies, dentists and notary's offices.

Furthermore, the SME Division offers medium- and long-term loans geared towards medium- and long-term working capital needs or financing of fixed assets, such as equipment and office renovations. In addition to the above, the Bank has created specific products to enforce financing of investments in photovoltaic systems for energy production.

Finally, the Bank has started cooperation with alternative channels such as financial and tax advisors, brokers and insurance agents for the promotion of its products. The Bank's commercial loan portfolio in Greece comprises approximately 50, corporate clients, including SMEs, and most of the largest corporate groups in Greece.

As a Group, we are able to offer our corporate clients a wide range of products and services, including financial and investment advisory services, deposit accounts, loans denominated in both euro and other currenciesforeign exchange, insurance products, custody arrangements and trade finance services. The Bank lends to all sectors of the economy.

Traditionally, the Bank has focused on lending to large- and medium-sized domestic corporations, especially industrial corporations, which accounted for approximately 8.

In addition, the Bank provides letters of credit and guarantees for our clients. Most loans are collateralized to a certain degree, although Greek law imposes significant delays in foreclosing on collateral. The table below sets forth certain key interest rates charged and the savings rate paid by the Bank. Following the European Central Bank "ECB" rate increases in andthe Bank raised its savings rate accordingly.

We also participate in, advise on and arrange large syndicated loans with both domestic and foreign banks. Generally, these loans finance large domestic and international infrastructure projects and borrowings by large corporations and state-controlled entities.

For example, the Bank participated as co-arranger and underwriter in the financing of the Athens ring-road and the Rion-Antirrion bridge in Greece, the Birmingham Northern Relief Road in Britain, the High Speed Line Railway and the Rijnmond Power Plant in Holland, the Maritsa East Power Plant in Bulgaria and the Stendal Pulp Mill in Germany.

NBGI, the Bank's London-based investment banking subsidiary, is also active in arranging international syndicated loans and acting as an advisor on projects in private sector transactions. Greece is a maritime nation with a long tradition in ship-owning and is one of the world's largest ship-owning and ship-flagging nations. The Bank has traditionally provided financing for many of the largest Greek shipping companies.

The Bank's shipping finance activities are carried out almost exclusively through its Piraeus-based operation. The Bank plans to continue with its strategy of targeting first-tier shipping groups with respect to both our conventional shipping finance and our syndicated loan activities in order to improve quality, spread risk and enhance the profitability of our shipping loan portfolio.

Nearly all of our shipping loans are secured by vessels. The shipping industry is highly cyclical, experiencing volatility in revenues and cash flows resulting from changes in the demand and supply of vessel capacity.

The demand for vessels is influenced by, among other factors, global and regional economic conditions, developments in international trade and changes options seaborne and other transportation patterns. None of these factors is within our control. Nevertheless, in freights are expected to maintain levels.

The Bank has adopted strategies and procedures to more effectively evaluate shipping credits lei existing shipping loans are subject to periodic at a minimum, annual performance reviews. This approach has delivered positive results and the Bank's management believes that it will result in sustained strong performance in this sector in the next few years.

The Bank's management has focused on reducing the level of the Bank's non-performing loans. In recent years, management has taken steps to reduce the level of non-performing loans.

Our policy for writing off non-performing loans, in conjunction with growth in the Bank's total loan portfolio, has resulted in the decline of non-performing loans to approximately 3. Other Banking Related Services. The Bank and certain of our subsidiaries principally NBG Asset Management and Ethniki Leasing offer a wide range of other banking related services, including: The Bank launched our Private Banking operations inwhich currently offer services both domestically and internationally through our international private banking units in London and Guernsey.

Private Banking provides high net worth clients with high quality service and a wide scope of investment choices following a detailed evaluation of the customer's investment profile. We have agreed with established international investment institutions to distribute investment products to our clientele, such as mutual funds, hedge funds, structured products, and private equity products. The Bank and each of our banking subsidiaries carry out their own treasury activities.

The Group's Treasury is active across a broad spectrum of capital market products and operations, including bonds and securities, interbank placements in the international money and forex markets, and market-traded and OTC financial derivatives. It supplies the branch network with value-added deposit products, and the client base includes institutions, large corporations, insurance funds and big private-sector investors.

In general, the Bank and our subsidiaries enter into derivatives transactions for economic hedging purposes or in response to specific customer requirements. The Bank also trades actively on a proprietary basis, primarily in Euro-denominated Greek Government securities, and to a lesser extent, in the spot foreign exchange market and is a general clearing member in the Eurex derivatives exchange.

In recent years, the Bank's treasury-related activities have represented a significant source of stock. The Bank is active in the primary and secondary trading of Greek Government securities, as well as in the international Eurobond market. The Bank is a founding member of the Group of Greek Government Securities Primary Dealers which was established by the Bank of Greece in early In recent years, the Bank has maintained one of the leading market shares in capital market activities in Greece, particularly with regard to public offering activity.

Over the past five years, the Bank has acted as underwriter in 27 out of 39 domestic private sector IPOs. During the same period, the Bank has participated in all seven privatization offerings in Greece, while being one of the lead. The Bank also provides finance to major infrastructure projects both in Greece and abroad through its participation in the respective syndicated loan facilities.

The Bank offers custodian services to our foreign and domestic institutional clients who hold securities listed on the ATHEX, lei well as remote settlement and custody services on the Cyprus Stock Exchange "CSE". The Bank offers trade settlements, safekeeping of securities, corporate action processing, income collection, proxy voting, tax reclamation, brokerage services, customized reporting, regular market flashes and information services. The Bank also acts as global custodian to our domestic institutional clients who invest in securities outside Greece.

The Bank offers payment services to our clients participating in all local interbank payment channels. As a member of Step 2, the Bank is the main Greek entry point for Eurozone payments.

For payments, especially outside the Eurozone, the Bank maintains a global network of correspondent banks. The Bank is currently in the process 12973 implementing a major program to centralize its payment operations. It manages funds that are made available to our customers through the Bank's extensive branch network. Its market share in Greece was NBG Asset Management offers a wide range of investment products that offer institutional and private investors access to the most important markets in stocks, bonds and money market products, both in Greece and internationally.

In it expanded its range of mutual funds with the introduction of Delos Delta Bonus and Delos Delta Fasma Funds products combining high returns and initial capital protection, and Delos Tactical Allocation for investors wishing to invest in an absolute return fund. These products are characterized by high quality standards and competitiveness. The Bank's management believes that this qualitative shift will deliver benefits for our profitability in the years ahead, as well as substantially enhance customer retention.

These funds offer a new investment concept as they combine high returns depending on the course of selective stock index and initial capital protection. Delos Tactical Allocation Balanced Fund. This fund offers a new investment concept, as its model of portfolio management follows that of an absolute return fund, which provides stable returns with low correlation to the markets.

In NBG Asset Management expanded its range of investment services. The company offers a more integrated range of contemporary investment services such as: The total value of the funds we have managed since is illustrated in the table below.

Other Financial and Related Services. We also offer a wide range of other financial and related services directly through the Bank stock indirectly through specialized subsidiary companies.

Ethniki Leasing is active in the leasing of land and buildings, machinery, transport equipment, furniture and appliances, and computer and communications equipment. We have been offering factoring services sinceincluding domestic factoring services such as debt collection, management and account monitoring and advancing of funds for companies' outstanding claims.

Internationally, we offer export credit, credit risk coverage, monitoring services, management and debt collection services. Factoring services are provided through the Bank's corporate credit centers, which comprise a specialized division of the Bank. The Bank's corporate credit centers also provide lending services to small- and medium-sized enterprises, offering a synergistic complement of services to these clients.

The Bank engages in real estate management activities, options warehousing and third-party property management. Most of these properties have been bought in recent years from the Bank, which acquired them on realization of collateral under non-performing loans.

National Real Estate performed warehousing functions and held real estate property as a subsidiary. A, "History and Development of the Company" for information regarding our principal real estate divestitures in recent years.

The Bank intends to continue to divest real estate holdings. We operate, as a Group, in 12 countries outside Greece. As a result of the merger of NBG Serbia with Vojvodanska, the Bank currently has seven commercial banking subsidiaries in Turkey, Bulgaria, Romania, FYROM, Serbia, Cyprus, and South Africa. Our Turkish subsidiary Finansbank also has a commercial banking subsidiary in Malta. Our policy, since the early s, is to focus on the Bank's regional strength in SEE by strengthening our existing network and expanding into growing markets that present low banking penetration and greater profit margins and also to withdraw from mature markets where growth prospects are limited.

We seek to develop, in particular, our wholesale banking business by targeting major financial centers to which we can offer Greek and Balkan lending exposure. Our retail banking presence in some geographical areas may only be justified by our success in niche markets in which we have the ability to exploit competitive advantages.

Sincethe Bank has steadily built up a strong presence in SEE, through acquisitions and greenfield start-ups. The Bank's regional strategy aims at diversifying our operations and enlarging our footprint to cover a region with attractive economic prospects. The Bank offers commercial banking services to customers in the region through our branches and subsidiaries in Turkey, Bulgaria, Serbia, Romania, FYROM and Albania.

The Fiba Sellers also agreed and undertook to attend any general meetings of Finansbank and to vote such number of shares they then own as is equal to the difference between As a result of Turkish Capital Markets legislation, NBG made a mandatory tender offer to minority shareholders.

Following the mandatory tender offer and the sale of shares to IFC, we acquired from February to December a further 0. Finansbank's group of companies includes FinansLeasing, FinansInvest, Finans Portfolio Management, Finans Investment Trust, IBTech, Finans Pension and Finansbank Malta together, "Finansbank Group".

A, " History and Development of the Company ". Finansbank is the fifth largest private bank in Turkey in terms of total assets, loans and deposits, and offers a wide range of retail, commercial, corporate, private banking and international trade finance services. In addition, financial leasing, capital market, corporate finance, portfolio management and brokerage services are provided by Finansbank's subsidiaries. In the analysis that follows of Finansbank's and its subsidiaries' business, all amounts are before elimination of intercompany transactions and balances.

Finansbank's Corporate Banking Department serves large-scale corporate customers through its eight branches in the four largest cities in Turkey. Finansbank's Corporate Banking Department has benefited from integration into the NBG Group intaking advantage of NBG's reputation and experience in the international arena to launch post delivery finance products in the shipping sector and to enhance its credibility in the local syndication market.

Finansbank's Commercial Banking Department serves mid-size companies located in 22 cities in Turkey. The Commercial Banking Department operates through its Head Office departments, its four Regional Management offices three in Istanbul and one in Ankara and an extensive distribution network that includes 51 branches. The strategy of the Commercial Banking Department is to serve a wider range of customers as their "House Bank" while obtaining sound and sustainable profitability.

In the last quarter ofthe Commercial Banking Department opened six new branches in order to expand its sales channels. Finansbank's Investment Banking Department consists of Project Finance, Corporate Finance and Technical Consulting. The Investment Banking Department acts as a consultant and solution partner in its client relations while fulfilling client needs via medium- to long-term loans and other products. Companies are provided with assistance and consultancy in such fields as project finance, privatization, contract finance and real estate development, financial valuation, acquisitions, financial restructuring, debt restructuring, syndication loans including secondary loanscountry-based strategic market analysis and industrial analysis.

The SME Banking Division has been serving Finansbank's SME clients since Finansbank was the first bank in Turkey to provide sector support packages, such as tourism and agriculture support packages, and it also pioneered the "Kobifinans" project to serve its clients' information and consultancy needs through magazines, internet portals and call centers. SME Banking's market share in increased to Finansbank's Retail Banking Division recorded significant loan growth in This growth resulted in a market share increase in residential mortgage loans from 9.

The market share for individual car loans increased from 6. Finansbank's consumer deposit portfolio grew by InFinansbank and Finans Portfolio Management introduced three new funds: FBIST ETF and QUANT, FINANS ANALIZ. Finansbank's market share in mutual funds grew due to the mutual funds volume in OH "Automatic Account", a demand deposit account in which funds that exceed a certain threshold are invested in mutual funds by Finansbank for the benefit of the account holderwhich is a key product for consumer banking.

The introduction of the new funds was also the major contributor to the increase in market share. In OctoberCardFinans launched a new campaign with the concept "The Power is Yours". With this campaign, CardFinans introduced ten new product features including the following: Free Loans to Spend Promise, CardFinans in 15 minutes instant card facilityReady to Use Consumer Loan, Automatic Utility Payment, Cash Advance in Installments, Spend Alert Service, Detailed Statement Analysis and Unemployment Insurance.

The new instant card facility "CardFinans in 15 minutes" has been implemented in 49 branches throughout Turkey. During Finansbank increased its annual credit card spend volume from TRY 5. Total cards have increased The monthly rate on deposits is set out by the Central Bank of Turkey. While it has not yet been submitted for review to the respective parliamentary committee and for approval to the general assembly of the Parliament, if passed by the general assembly, the proposed legislation would limit the monthly rate credit card providers can charge to an estimated 2.

Visitors to the Finansbank website reached 2. A special SMS channel was established as a new card acquisition channel. Following internal forecasts on the performance of domestic and international markets and an analysis of the global political and economic situation, domestic and international investment instruments are offered by Private Banking to meet clients' needs. Recommended instruments include time deposits, mutual funds, emerging market bonds, T-bills and T-bonds, domestic and international equities and bonds, corporate bonds, currency exchange, forward contracts, futures and options, and structured products.

Finansbank's Private Banking Division has 70 specialized financial advisors providing broad coverage of the client base and enhanced cross-selling of the division's range of products.

The division's Private Banking Centers consistently support, develop, train and coach the branch teams in their effort to identify new high net worth clients as well as develop additional referral sources.

Events and training are regularly organized to inform clients about the latest investment and business issues. The most significant subsidiaries of Finansbank include the following: Finans Invest was established in Decemberand began operations 12973 January on the ISE. The company provides a wide range of financial services to both individual and institutional investors, including investment counseling and brokerage services, portfolio management, fund investment services and corporate finance and international investment services.

Finans Invest's client portfolio was TRY 2. Total assets of Finansbank Malta reached TRY 2. Finans Leasing was established in March Finans Leasing's target customer segment is SMEs and it was one of the first leasing companies in Turkey to identify the investment needs of SMEs, targeting them as a distinct market segment. In Finans Leasing grew faster than the leasing sector in Turkey as a whole. Finans Portfolio Management was established in September As a financial product innovator, Finans Portfolio Management currently manages five Exchange Traded Funds, 11 Mutual Funds, two Funds of Funds and one Closed-end Fund.

Finans Portfolio Management also manages discretionary portfolios for high net worth individuals and select institutional clients. Finans Portfolio Management's market share in the mutual funds industry including ETFs was 3. As at the same date, total assets amounted to TRY Finans Investment Trust was established in and its shares have been traded on the ISE since It is a closed-end investment company, managing portfolios composed of capital and money market instruments.

Finans Investment Trust's total assets amounted to TRY The Bank's foreign banking operations include banking subsidiaries in six countries: NBG Cyprus, Stopanska Banka A.

Our foreign banking network is described below. In the analysis that follows, all amounts are before elimination of intercompany transactions and balances. Additionally, we have two overseas representative offices in Australia. The London branch principally serves large corporate and shipping clients and also offers private banking services. The majority of assets and loans of the Bank attributable to our foreign branches are held in London.

Currently, the Bank's branches in Albania lend primarily to certain of the Bank's established Greek corporate clients operating in that country, but also to certain local corporate clients that have significant liquid assets and other collateral. The table above relates solely to the Bank's foreign branches and not to the branches of the Bank's foreign subsidiaries.

Inthe UBB branch network continued to expand, opening 56 branches in cities and towns throughout Bulgaria and 5 in-store branches. DuringUBB opened seven business centers, dedicated entirely to servicing SME customers. InUBB recorded InUBB's market share in Bulgaria was In order to support its further development, Banca Romaneasca implemented two share capital increases, following which our participation in Banca Romaneasca increased to The European Bank for Reconstruction and Development "EBRD" is the second largest shareholder of Banca Romaneasca, with In Marchthe extraordinary general meeting of Banca Romaneasca's shareholders approved a share capital increase of RON Banca Romaneasca launched several new products and services duringprimarily options to SME and retail activity, and increased its overall total assets market share from 2.

Inwe acquired a controlling interest in Stopanska Banka, and currently hold a Following its latest reorganization activities, Stopanska Banka currently has 25 branches, which in turn manage 35 sub-branches, and continues the transformation of its branch network into modern sales outlets. Stopanska Banka is also a leader in e-banking within FYROM, promoting Internet and SMS banking and offering its clients electronic payment facilities.

Stopanska Banka aims to continue improving its loan portfolio by targeting high net worth customers, such as SMEs and large companies. NBG Cyprus provides a wide range of commercial and retail banking services. InNBG Cyprus maintained its policy of growth of its loans and deposits portfolio through the introduction of new mortgage and retail credit products. SABA offers traditional commercial and retail banking services, with particular emphasis on retail and commercial banking services for the SME market in South Africa.

In Decemberwe acquired a In October NBG became the sole shareholder of Stock. Vojvodjanska is the ninth largest Serbian bank in terms of assets and has the third largest branch network in the country with branches. As a result of this merger, our total presence in the Serbian market amounts to branches. Furthermore, its branches serve over 1, private accounts and 84, SME and large company accounts.

In Februarythe Bank's branch network in Serbia consisting of 24 branches became the NBG Beograd subsidiary, which was subsequently merged with our other subsidiary bank in Serbia, Vojvodjanska, in February As part of its foreing banking operations, the Group offers Leasing services through certain of its foreign subsidiaries. InInterlease established a subsidiary company, Interlease Auto E. Income and total assets of the company have grown steadily.

Lei line with its cross-selling strategy, Interlease offers its leasing services in Bulgaria through the Group's Bulgarian subsidiary, UBB. Interlease possesses a fully diversified client portfolio, consisting of lessees from almost all sectors of the country's economic activity, focusing on the transportation and industrial equipment industries. Before the acquisition, Eurial operated primarily in the automobile leasing sector, being the major lessor of Peugeot automobiles in Romania. Following Interlease's success in Bulgaria, Eurial has adopted a strategy of supporting its clientele via alternative financial services, together stock cross-selling operations.

The Group plans to enhance Eurial's structure and expand its activities to cover the full spectrum of leasing services, making it one of the leading leasing companies in Romania. Acquired inNBGL operates in the automobile, commercial vehicle and equipment leasing sectors. Following the Group's success in the Bulgarian leasing market, NBGL has adopted the strategy of supporting its clientele via alternative financial services, together with cross.

In this aspect, NBGL established a subsidiary company, NBG Services d. We are currently evaluating potential acquisitions in SEE, Eastern Europe and the Southeastern Mediterranean region. In addition to our domestic activities, we also conduct investment banking business in London through NBGI, which also has a private equity and venture capital business conducted in its London and Athens offices.

NBGI's Debt Capital Markets team completed several key public transactions in while further expanding its private placement transactions across the countries of coverage. The second half of was marked by the international credit crisis as well as by the slow-down of fixed income activities in Greece.

InNBGI's Debt Capital Markets team expanded its origination coverage in SEE and broadened both its product base such as private placement financings and covered bonds and its client base. NBGI's success in placing Greek stock to international investors extended beyond the ATHEX to include significant international transactions and building expertise in shipping initial public offerings "IPOs". The NBGI Corporate Finance Advisory team successfully undertook projects with major corporate clients in key transactions during NBGI advised Mytilineos on the merger of its energy assets to form Endesa Hellas, one of the largest non-banking transactions in Greece of the past three years.

In NBGI forged productive cooperation with Finansbank's Investment Banking team, promoting cross-border transactions. The provision of capital markets and advisory services in Greece has become increasingly competitive, with a number of banks and brokerage houses participating actively in this area. However, we believe that our plan to reorganize our business to combine all of the investment banking activities of the Group and our existing presence in the marketplace will enable us to capture a significant share of any growth in the Greek market for investment banking and brokerage services.

Its activities focused on three main investment areas: Funds are managed by NBGI's subsidiary NBGI Private Equity Limited "NBGI Private Equity".

NBGI Private Equity, has offices in London, Athens, Paris and Bucharest and manages the following private equity funds: The Bank is the sole investor in the fund. It is a UK limited partnership.

In this fund was restructured and its scope widened in order for it to take advantage of the opportunities arising in SEE markets. This fund was formally closed in March and will primarily seek to invest in SMEs which are incorporated in or whose business operations are in Greece and in companies which are headquartered in or have a significant part of their activities in Central and Eastern Europe with a focus on Balkan countriesthe former Soviet Union, Cyprus and other markets which, at the discretion of the fund's manager, are considered to be in the SEE area.

Both of these funds are structured as English limited partnerships. NBGI Private Equity Limited is the manager of the fund and employs a specialist team of investment professionals to manage the Fund, under the brand "NBGI Ventures". The scope of NBG Greek Fund Limited is to invest primarily in rapidly growing Greek companies. EH offers a full range of products such as life, accident and health insurance for individuals and groups, fire, calamity, credit, motor, marine hull and cargo insurance, and general third party liability.

Through the expertise of its personnel and the reorganization of its internal procedures, EH provides advanced insurance solutions that can meet the demands of the increasingly competitive Greek insurance market.

EH provides insurance products through 58 branch offices, sales agencies with 2, tied agents, who sell only EH Insurance products, and 1, independent insurance brokers. In addition, insurance products are distributed to consumers through the Bank's extensive branch network. In the Greek insurance market, EH further strengthened its leading position during by increasing its market share to With a view towards expansion in SEE, EH operates two Cypriot subsidiaries in collaboration with NBG Cyprus which are active in Life and Non-Life insurance business.

Garanta offers consumer credit insurance and personal accident products through the network of four banks, namely Banca Romaneasca, Alpha Bank Romania, Pireaus Bank Romania and Romextera.

The main scope of these companies is to promote bancassurance products in the Bulgarian market. In MayFinansbank applied to the General Lei of Insurance in Turkey and received permission to establish Finans Emeklilik ve Hayat A.

This new company has completed its corporate organization and obtained a license to conduct life, personal accident and pension insurance business. Finans Pension's total assets amounted to TRY NBG Bancassurance acts as an agent providing intermediary services between our customers and insurance underwriters. NBG Bancassurance assumes no insurance underwriting risk itself. InNBG Bancassurance continued its penetration in the area of bancassurance, providing innovative products that aim both to improve efficiencies to our extensive network and develop synergies between Group companies.

NBG Bancassurance provides two categories of products: It is targeted at individuals with available deposits in order to secure a guaranteed pension for life, which the customer buys through a lump sum payment. Customers choose the amount of the guaranteed pension as well as the age at which they wish to receive such pension. Customers have the flexibility to borrow part of the payment through a loan with a competitive interest rate.

Also ina new program "Frontizo" was presented by the Bank, where the customers secure a lump sum payment for their children when they reach a specific age. Duringthe Bank presented two new programs: Bancassurance products contributed approximately Based on statistics provided by the Association of Greek Insurance Companies, we believe that the Greek insurance market is still immature and we consider this market to have strong growth potential.

The share of insurance premium to GDP in Greece is 2. Consulting and Professional Training. In addition, the Bank runs a training center for its employees as well as for other banks in Greece and abroad. The Bank's training center offers training courses and participates in programs funded by the EU.

12973 investment projects currently in progress include the full restoration of the hotel's bungalows, the "Club House" restaurant and "Astir Beach". Significant Equity Method Participations. Our equity method investment portfolio includes participations in Greek corporations.

UBB AIG Insurance and Reinsurance Company and UBB AIG Life Insurance Company are jointly controlled by Group companies UBB and EH and companies of AIG. Intellectual property, contracts and manufacturing processes. Our business and profitability are not materially dependent on patents or licenses, industrial, commercial or financial contracts or new manufacturing processes. We compete with other banks, financial services firms and a wide range of insurance companies in providing mutual fund services, capital markets and advisory services and insurance.

Internationally, we compete with banking firms of varying sizes and geographic scope. The Bank itself competes with national, regional and foreign banks throughout Greece and abroad. There were 47 universal banks i. Regulation and Supervision of Banks in Greece. The Bank of Greece is the central bank in Greece. It also has supervision and regulatory powers relating to the operation of credit institutions in Greece. The regulation of credit institutions under Greek law was substantially amended pursuant to the following: Credit institutions operating in Greece are obliged to observe the liquidity ratios prescribed by the Bank of Greece Act No.

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 insufficient liquidity of a credit institution, 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.

Historically, the Greek banking system was subject to strict regulatory requirements, including restrictions on: Since the late s, but predominantly in the early s, a gradual relaxation of the strict regulatory environment in Greece took place due to: Liberalization of capital movements, through implementation of the relevant EU Directives and in particular the Second EU Banking Directive, also contributed substantially to deregulation.

Beginning inminimum interest rates gradually replaced interest rates previously imposed by the central bank. Administratively determined interest rates were finally abolished in 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 As a consequence, credit institutions were allowed to negotiate freely and grant new types of loans without limitations on the rate of interest including loans for: Limitations apply to the compounding of interest.

Sinceborrowers have been permitted to borrow in foreign currencies for all legitimate business purposes at interest rates and on terms freely negotiated between the parties.

Credit institutions in Greece were also authorized to accept deposits made by natural persons and legal entities in foreign currency.

The foreign exchange rates against the euro are published on a daily basis by the European Central Bank. 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. 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 a revised capital adequacy framework "International Convergence of Capital Measurement and Capital Standards"while in Novemberthe Committee issued its final proposals on the new capital standards, also known as the Basel II accord.

Lei II promotes the adoption of stronger risk management practices and introduces more risk-sensitive approaches for the calculation of capital requirements that are conceptually sound and at the same time pay due regard to the sophistication level of risk management systems and methodologies that are applied by banks.

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 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.

As a result of the adoption of these Directives by the Bank of Greece, we may be required to maintain higher levels of capital, which could decrease our operational flexibility and increase our financing costs. Consequently, we cannot assure you that Basel II will not have a material adverse effect on our financial condition or results of operations in the future. The new requirements include the following sets of reports: The Greek deposit guarantee fund took effect in September 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.

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. 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. Lei of Money Laundering and Terrorist Financing.

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. The main provisions of Greek legislation on money laundering are as follows: Additionally, we comply with the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of known as the "USA PATRIOT Act of "which took effect in October and which has implemented a range of new anti-money laundering requirements on banks and other financial services institutions worldwide.

Equity Participation by Banks. Banks must follow certain procedures regarding holdings in other companies: For the calculation of the above thresholds, the following shares or holdings are not taken into account: 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.

The provisions of such Act do not apply to branches of credit institutions with their registered seat in a 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. Prior approval for the acquisition or increase of a qualifying holding is not required in any of the following circumstances: The HCMC and the Lei must be notified once certain ownership thresholds are crossed with respect to listed companies.

The Business Plan and Business Plan targets discussed in this section are based on the Bank's financial statements prepared in accordance with IFRS. Although business has expanded substantially in recent years, the domestic banking market still offers attractive growth margins in the retail segment.

One of our key competitive advantages is our leading position in mortgage lending, with a share of approximately one fourth of the market. This was due to the extensive branch network, customer loyalty and the innovative products that the Bank offers. We aim to maintain our market share and exploit alternative delivery channels, particularly targeting construction companies and estate agencies. We attach particular importance to small enterprises.

The total number of small enterprise customers reached 56, at the end of As we upgrade our branch operations, we have improved services to customers. Affluent individuals and SMEs are served by Customer Relationship Managers "CRMs" who undertake to attend to their overall banking needs. This new model has been implemented in almost the entire NBG branch network, while in it extended to affluent retail customers.

Through this model, we have made significant improvements in customer service, as we can now offer more personalized services to SMEs and affluent individuals.

The benefits for the Group focus on growth in business with existing customers i. In asset management, efforts will be stepped up to enhance the mix of higher performing fund categories, while special emphasis will be placed on exploiting our extensive branch network as a sales channel.

With respect to insurance, besides the benefits that we will reap from the long-term rationalization of domestic market penetration, we expect to achieve significant synergies in the international markets. For instance, in Turkey, the Group launched Finans Pension in ; in Romania we will leverage the newly acquired Alpha Insurance; and in Bulgaria collaboration will proceed jointly with AIG.

In bancassurance, we intend to exploit the synergies derived from our broad customer base. The key targets for the three-year period are to enhance the performance of our insurance business by better leveraging the sales network, launching new products, strengthening incentives across the sales network and revising pricing policy.

In view of the fact that banking penetration levels in Greece in the medium term are maturing, and due to the limited scale of the Greek market, we are looking to expand in markets that present. To this end, we succeeded in substantially strengthening our presence in the wider region of SEE in Foreseeing the rapid developments that are currently taking place in the international environment and the need to expand into new dynamic markets that offer growth at levels similar to those of other major banks operating on a European level, we made two important acquisitions inin Turkey and Serbia.

This was Serbia's biggest sale to date of a state-controlled bank. These targets will be achieved despite the expected continuation of high growth in our business in the domestic Greek market.

Inthe first phase of internal reorganization at the Group was completed, through a range of actions that aimed at actively monitoring and containing operating expenses.

These actions have led to more efficient management of general expenses and staff costs at the Bank, resulting in below-inflation increases. In SEE, operating expenses grew at a faster pace than in Greece due to the vigorous organic expansion of the Group in the region. In the three-year periodwe will step up our efforts to contain administrative expenses by initiating the second round of internal reorganization. The key actions will focus on centralization of commissions at the Group level, and on further rationalization of general expenses by consolidating procurement and rationalizing and centralizing processes.

As a result, domestic general and administrative expenses are expected to increase at roughly the same pace as inflation, on average, each year, while in the wider SEE region, growth in these expenses will be outstripped by the increase in revenues, thereby improving significantly the ratio of general expenses to income. As regards staff productivity increases, the main actions planned for the three-year period will aim at reducing those options carried out in the branches that are not associated with sales, and the improved management of human resources.

Special emphasis will be placed on training and professional development of staff, while the application of productivity bonuses and performance-related pay will be strengthened, thereby enhancing incentives and rewarding performance. As part of our Business Plan we announced the implementation of a new Group operating model.

All key projects included in this plan have been launched, including the consolidation of SEE data centers and core banking systems, the outsourcing of Group card processing operations and the deployment of an effective Group procurement model. Effective integration of new acquisitions and the leverage of synergies.

The recent acquisitions, particularly Finansbank, have created a new structure for the Group, with a wide diversity of revenue and profitability sources that derive in large part from operations outside Greece. The integration of Finansbank was completed ahead of schedule withinachieving organizational and policy alignment in all core functions: Treasury, Finance, Risk, Audit and Compliance. Also, all planned joint business initiatives in Corporate, Investment and Retail Banking were launched and are delivering revenue synergies for the Group, including synergies in from cross-border lending provided to Turkish clients, while a new life insurance business was launched in Turkey leveraging Finansbank's network and NBG's expertise.

The effective integration was confirmed with the appointment in early of Finansbank Group's CEO both to the NBG Group Executive Board and to oversee international activities. To achieve effective integration of the new members into the Group, it is imperative that a single control and management system is effectively implemented. To this end, substantial work has already been done by means of special projects for the integration of financial reporting, performance management, risk management, corporate governance and regulatory compliance.

Effective management of regulatory capital. Active management of our regulatory capital is being strengthened alongside the changes in strategy and orientation, and the rapid growth in lending, particularly in SEE and Turkey. Accordingly, we divested a number of our shareholdings in sectors and activities that either did not yield satisfactory returns or were not compatible with our strategy.

Following the disposal of our subsidiary Atlantic Bank of New York to New York Community Bank at the end ofwe disposed of our Canadian subsidiary NBG Canada. The disposal of these two banks is in line with our strategy to discontinue operations in mature markets where the prospects of further growth are limited and where, in any case, we have only a very small presence.

We will continue to withdraw from non-strategic sectors and divest our portfolio of low-yielding assets so as to better utilize the funds we invest, thereby continuing to generate benefits for our shareholders. The creation and maintenance of an environment of international best practice management is essential in order to ensure our compliance with the requirements of the Basel II framework of rules regarding the capital adequacy of banks.

In the first stage of implementation of Basel II, we saw our regulatory capital affected to only a very small degree. Strict and efficient management of the Group's regulatory capital throughout the two years ahead will support growth in operations. Further expansion of the Group through acquisitions will continue to be selective; ensuring desired returns on the capital invested, but will be relatively small-scale in the coming two years.

The transformation of the Group into a modern international organization requires further changes at a. The progress already made is particularly important and has laid the foundations for a successful outcome to the Business Plan Property, Plants and Equipment. These properties are, for the most part, held free of encumbrances. Most of our properties are attributable to our branches and offices through which we maintain our customer relationships and administer our operations.

Most of our other properties have been acquired as a result of foreclosure on the collateral of defaulted loans. There are no environmental issues of which we are aware of that may affect the Bank's utilization of our real estate assets. GAAP financial statements under "premises and equipment". Those of our properties that have been acquired as a result of foreclosure on the.

Management believes that the current market value of real estate assets exceeds their book value. We are not always able to realize the full market value of real estate which we are required to or wish to sell because of variations in the property market and legal impediments to the open market sale of such property.

Information included in this section, except where otherwise stated, relates to the Bank and its subsidiaries. The statistical data presented below may differ from data included in the consolidated financial statements of the Group included elsewhere in this Annual Report. In certain cases, the statistical data is derived from statutory reports and from statistical data reported in the forms prescribed by the central bank for regulatory purposes.

Such data are compiled as a normal part of our financial reporting and management information systems. Unless otherwise noted, amounts presented below are based on U. Average Balances and Interest Rates. The tables below have been calculated on the basis of average monthly balances. The following tables analyze the change in our net interest income attributable to changes in the average volume of interest-earning assets and interest-bearing liabilities and changes in their respective interest rates for the periods presented from our continuing operations.

Amounts due to changes in volume have been calculated by multiplying the change in volume during the year times the average rate for the preceding year.

Amounts due to changes in rates have been calculated by multiplying the change in the current year average rate times the volume of the current year. The net change attributable to changes in both volume and rate has been allocated proportionately to the change due to average volume and the change due to average rate. The changes are calculated on the basis of the monthly average balance sheets set forth in the preceding table.

The following table shows the levels of average interest earning assets and interest income and net interest income of the Group and the net interest margin for each of the periods indicated from lei and foreign continuing operations. These data are derived from the table of average balance and interest rates above and are based upon information in the Group's U. The following table presents certain selected financial information and ratios for the Group for the periods indicated from continuing operations.

In preparing its U. GAAP Financial Statements, the Group classified its securities as required by U. GAAP according to stock following categories: The Bank has the largest portfolio of Greek Government bonds among Greek banks, which is attributable to the Bank's position as the leading primary dealer in terms of volume and liquidity of Greek risk, according to statistics published by the Bank of Greece.

The Group's equity portfolio stems largely from investment activities on the ATHEX as well as equities taken in loan foreclosure and workout situations from the past. As part of our aim to restructure and reorganize our operations, the Group has been strategically divesting our holdings in non-core businesses.

The Group holds a significant amount of financial instruments issued by the Greek Government. The Group's loan portfolio has grown steadily in recent years in line with increased demand for credit generally in Greece and the other markets in which the Group operates. Most of the Group's loans are in the form of credit lines with short maturities. Loans by Type of Customer. The Group offers a wide range of credit instruments to domestic and foreign businesses and State-related entities and individuals, including letters of credit and long-term and short-term loans.

A brief description of the type of loan classifications included in the options analysis is as follows. Residential mortgages consist primarily of fixed and floating rate loans first collateralized by interests in owner-occupied dwellings including houses and condominiums.

These loans are nearly all secured by pre-notation " prosimiosi " which is less expensive and easier to record than mortgages. The Group is also able to offer certain Government-subsidized mortgage loans in Greece to borrowers who meet certain criteria. Credit card lendings are unsecured revolving credit lines. Auto financing loans are extended for personal vehicles and are mostly secured.

Other consumer loans are made to individuals on an installment plan to finance the purchase of consumer goods and to pay for services. The Bank extends revolving credit facilities for retail customers under which approved customers can withdraw funds up to the limit of their individual credit facility as needed for personal purposes.

These loans are unsecured. The majority of the Group's commercial loans are in the form of short-term i. Generally, if the borrowers meet interest payments in a timely manner, these facilities are rolled over, subject to the wishes of the borrower and the Bank's credit review policies.

Industry and mining loans include credit extensions primarily made to corporations involved in the textile, food and beverage, chemical, and metals mining ventures.

Such loans are generally collateralized by interests in the customers' real property and operating assets. Small scale industry loans are those made to commercial ventures that generally employ fewer than 50 persons, and such loans are collateralized by assets of the company or assets of the companies' shareholders.

Trade loans are those made to ventures which do not manufacture goods but import, export, distribute and sell goods. Such loans are typically collateralized by inventory or assets of the company's shareholders. Construction loans are made for larger scale infrastructure or commercial projects undertaken by private entities on their own behalf or on behalf of government public works offices.

Tourism loans are made primarily to developers and operators of hotel and resort properties and such loans are secured by interests in those properties. Shipping and transportation loans are advanced primarily for shipbuilding, and to a lesser extent, shipyard construction and vessel acquisitions and are collateralized by interests in the vessels or other property and the future revenues generated by the vessels.

Other transportation loans relate to ground and air transport. Commercial mortgages are loans for the acquisition of real estate used in business. These loans are nearly all secured by pre-notation which is less costly and easier to administer than a mortgage. Public sector loans are those advanced to the Hellenic Republic, public utilities and entities governed by the public law of Greece, including IKA, the largest social security institution in Greece, and a shareholder of the Bank.

Foreign Country Outstanding Loans. The Group's foreign country outstanding loans, representing specific country risk, are extended primarily by the Group's foreign branches and banking subsidiaries. The Bank's Greek and London operations also provide loans customarily made in U. These foreign country outstanding loans represent additional economic and political risks.

D, " Risk Factors ". The discussion below relates to the Bank and our banking subsidiaries, Finansbank, Vojvodjanska, SABA, UBB, Stopanska Banka, NBG Cyprus and Banca Romaneasca. The Bank has established a centralized credit approval process, which is governed by the Credit Policy for the Corporate Banking Portfolio the "Credit Policy". The Credit Policy addresses core credit policies and procedures for identifying, measuring, approving and reporting credit risk.

To this end, it includes a set of rules related to the extensions of credit and the granting of approval authority. Credit extensions are based on Credit Proposals, which are prepared by the Corporate Banking Business Divisions and submitted for approval as appropriate. The approval level primarily depends on the total amount of proposed facilities, tenor, the classification of the obligor and the sector. All credit extensions are subject to the approval of authorized Credit Division members or the Group Chief Risk Officer.

There are 11 levels of credit approval authority as follows: Members of this Committee are the General Manager of Corporate, the Corporate Banking Business Division Managers and the Credit Division Manager. The underwriting process is centralized under the Mortgage Credit Division. All mortgage applications are rated using a bespoke application scorecard.

Centralized underwriting ensures segregation of duties and uniform enforcement of underwriting standards. Pre-notation is easily converted into a full mortgage following a non-appealable court order or decision, which may be obtained at the request of the Bank in the event of default. The Bank may, at its discretion, permit the transfer of a mortgage on condition that the transferee agrees to assume all obligations arising from the original mortgage contract, and provided that the transferee's income and credit profile have been screened and approved by the Mortgage Credit Division.

Loan approval criteria include the applicants' income, the sources of such income, employment history, credit history, and the applicant's payment-to-income ratio. Moreover, loan approval takes into account the applicant's former relation with the Bank e. Qualified appraisers, both in-house and outsourced, are completely independent from the underwriting process and carry out collateral valuation.

In doing so, they have to take into account the market value of the property. In addition, they perform an estimation of liquidation possibilities, taking into account the levels of commercial activity with respect to properties with similar characteristics. Furthermore, the appraisers apply conservative assumptions in estimating market values and formulate a useful benchmark, serving as an indication of the minimum asking price for the asset.

For personal loans and credit cards, the credit approval process is centralized and is carried out through the use of bespoke credit scorecards, developed on the basis of historical data. These are used for the review of applications to ensure effective and accurate decision-making. The Group Risk Management Division "GRMD" produces, among other reports, ageing analyses by period of disbursement, issuing channel, and product type for various delinquency definitions, thus continuously ensuring strict monitoring of the scorecards' efficiency and separation power.

Consumer loans are generally not collateralized, with the exception of car loans. The SME Division has created small business credit centers in Athens, Thessaloniki and Patras in order to standardize lending criteria. These credit centers handle all of the Bank's credit applications, whether coming from entrepreneurs or SMEs. The above mentioned credit centers are staffed by lending teams under the supervision of a team leader. Credit underwriters use a decision support model to assist in their credit decisions when reviewing and making credit decisions on applications forwarded by branches.

An internal rating model has recently been developed for the credit evaluation of loan requests. This model is expected to further improve the quality of decisions and reduce the time required for the credit granting process.

The credit policies are communicated throughout the Bank by means of credit manuals and circulars, supplemented by bulletins and local directives on particular issues. The Bank has developed and implemented a credit manual for each of the above retail portfolios, following best banking practices.

The credit manual is periodically revised. The credit-granting processes and procedures are centralized. The rationale behind this organizational structure is three-fold: Finally, through the development of portfolio models, our Risk Management Division is able to calculate, evaluate and monitor expected and unexpected losses for all portfolio asset classes and segments.

The credit approval system is managed by the Credit Department. Finansbank's Credit Department consists of: The Credit Department approves loans in compliance with the applicable regulations within the framework of its own policy and principles. Inseven Region Credit Approval Units have been set up under the Credit Department. Each regional unit consists of eight persons and one manager and the number of branches that each regional unit supports, ranges from 40 to The Credit Department conducts credit and financial analysis procedures to verify whether the customer is creditworthy.

Also, the Credit Department uses Probability of Default models to assess the creditworthiness of SME customers in the application process and behavioral models to monitor and measure credit risk of existing customers. The Credit Department makes every effort to ensure the collectability of the loan through receipt of a proper security compliant with the terms and conditions set forth in the written internal procedures about credits and collaterals.

Credit analysis falls under the responsibility of Financial Analysis and Inquiry Groups and in a Credit Analytic Unit. All credit and measurement models are eventually approved by the Risk Management Group.

Finansbank's Board of Directors has the right to grant loans within the limits set by Turkish Banking Law. The Head Office can use this credit granting authority through its units, regional offices and branches. Vojvodjanska has implemented a five-tiered credit approval system which is based on various criteria. Vojvodjanska's bodies which are responsible to reach the decisions on facilities are the Branch Credit Committees, the Micro Loans Credit Committee, the Head Office Credit Committee, the Executive Board and the Board of Directors.

The Branch Credit Committees also can approve loans at the request of a client, which are collateralized with cash deposits or pledges on bonds denominated in foreign currency issued by the Republic of Serbia, up to the maximum amount of the competence of the Head Office Credit Committee, regardless of the maturity, classification and quantitative risk evaluation.

Pursuant to Vojvodjanska's credit risk methodology, the Branch Credit Committees cannot approve loans to clients with a credit risk evaluation of 8 or above 1 to 10 scale. Vojvodjanska's competent bodies have the right to reach decisions on loans granted under conditions which are in line with conditions defined in the enactments of Vojvodjanska's business policy. Vojvodjanska's Board of Directors approves all exposures exceeding the above mentioned limits to corporate clients and entrepreneurs.

The South African Bank of Athens "SABA". The loan approval process at SABA is centralized and takes place in the Credit Risk Department located at SABA's head office. UBB has implemented an eight-tiered credit approval system, which is based on the size of the aggregate exposure of the borrower.

The Credit Committee consists of the Executive Directors of UBB, the Head of Corporate Banking and the Head of Risk Management. InUBB established an Executive Credit Committee, consisting of the members of the Credit Committee, as well as the Head of the NBG Group International Credit Division. Loan facilities exceeding the above limits are submitted to UBB Board of Directors for approval. Stopanska Banka has adopted a four-tiered credit approval system for lending to companies, depending on the size of the loan.

Commercial loan applications are approved as follows: Banca Romaneasca has adopted a multi-tiered credit approval system for lending, depending on the total aggregate exposure on a single debtor considered as a single client or group of clients. The Bank and each of its subsidiaries conduct the credit risk process separately. The Group has implemented systematic control and monitoring of credit risk. The GRMD coordinates each of the.

Corporate Credit Policy determines the contents of Credit Proposals "CP" for the corporate and commercial portfolios, which are conducted at least stock depending on the classification of the obligor. Each CP includes, among other criteria, the purpose and amounts of the facilities proposed, their main terms and conditions, key risks and mitigants, the obligor risk rating and classification status of obligors and related counterparties, and, finally, business, financial and industry reviews and analyses.

According to the Rating Policy, which is an integral part of the Corporate Credit Policy, all obligors of the Corporate Portfolio are rated on a grade scale using calibrated and validated rating systems with each grade corresponding to a Probability of Default.

The Bank uses a number of obligor rating systems, assigning a borrower rating to each Corporate Banking Portfolio customer. This rating is based primarily upon quantitative criteria but qualitative factors are used as well. Additionally, each of the Bank's and its subsidiaries' rating systems consider the borrower's industry risk and its relative position within its peer group. As the Bank prepares for compliance with Basel II Internal Rights Based "IRB" methods, corporate borrower ratings are mapped to probabilities of default in order to estimate specific expected loss per obligor.

The Bank manages its corporate credit granting function, controls credit exposures and ensures regulatory compliance with a set of obligor, industry and large exposure limits. The assignment of obligor limits is directly related to the obligor risk rating.

The Bank has established and implemented an obligor classification system in order to facilitate early recognition of problems in various credit relationships and proactively take remedial action. The classification process is the responsibility of the Credit Division. There are five classification categories: Current, Watch List, Sub-standard, Doubtful and Loss. The obligor classification determines the frequency of the credit reviews and the level of credit approval authority.

Credit Review, Management and Control in Retail Banking. Inthe Bank completed its estimation of key credit risk measurement variables, including probability of default, loss given default and exposure at default.

Simultaneously, new credit risk management and rating systems for consumer credit and SMEs were completed and expected loss was estimated internally for these portfolios. The Retail Banking Collection Division holds responsibility for monitoring and collecting past due amounts for all retail portfolios and focuses on reducing delinquency rates, facilitating early awareness of defaulted loans, ensuring proactive remedial management and reducing costs, achieving a higher overall retail business profitability.

Responsibility of loan tracking lies primarily with the branches and secondarily with the Units of District Offices, the Directorate General Loans Department and Loans Tracking Unit. The loan tracking process consists of ensuring adherence to loan covenants, timely identification of existing and potential problematic loans, determination of the remedial measures of existing and potential non-performing loans, implementation of such measures and reporting to management on the quality and structure of the loan portfolio.

Credit risk is monitored by Risk Management and the Credits Department. The comprehensive and well-documented credit system is the backbone of credit risk management. The Credit Policy Manual covers credit authorization activities, concentration limits, credit monitoring activities, credit risk classification systems rating, scoringcredit risk strategies and guidelines. In order to evaluate the Bank's retail and non-retail loan portfolios, two risk committees were established.

The Retail Risk Committee and the Corporate Risk Committee meet monthly and determine 12973 and policies regarding their respective portfolios. Rating systems and scorecards are in place to assist with risk management for the credit portfolio. These models are reviewed and validated by an independent unit within risk management. Total loan portfolio is monitored by the Credit Risk Management Unit and concentration limits are applied to the loan portfolio to maintain credit quality at the pre-agreed level.

Limit categories are defined as single borrower limits, group of connected borrowers' limit, industry limit, internal rating limits, top 50 customers' exposure limit and top 20 groups' exposure limit.

Risk management reports present a full review of the credit portfolio from various aspects and enable monitoring of the limits, and are submitted to the board of directors on a monthly basis. The capital charge for credit risk is considered as an indicator of the level of risk of loan portfolios and is currently reported based on the "Standardized Approach" as defined by the Bank of International Settlements "BIS"which weighs credit risk according to the type of the facility and the collateral.

Finansbank has outlined its Basel II roadmap which includes all the necessary steps to comply with the IRB approaches within the timeline agreed by regulators. The Basel II roadmap consolidates model development projects for Probability of Default, Loss Given Default and Exposure at Default for retail and non-retail portfolios as well as subsidiaries; IT Projects for data collection and model implementation; validation of models in use; detailed bottom-up calculations of economic capital "ECAP" and risk adjusted return on capital.

After the development of a capital portfolio model and calculation of ECAP, the Risk Adjusted Performance systems will be developed as well. Loans are classified in accordance with the evaluation of their collectability, number of days in arrears, and the general financial background of the counterparty.

The South African Bank of Athens. SABA focuses on working capital facilities and asset-based finance for SMEs and facilities are reviewed on an annual basis in light of the most recent financial statements for clients. Outstanding business loans to large corporations are reviewed monthly by the responsible credit officers and by UBB Credit Portfolio Review Committee, which is responsible for reviewing general categories of risk and implementing risk guidelines.

Loans to SMEs are reviewed on a monthly basis. All loans are reclassified monthly according to a risk assessment based on a four-point risk-rating system. The review is focused on the largest and most recently granted loans and a random sample of other loans. Interim reviews are undertaken during semi-annual audit reviews. UBB Credit Portfolio Review Committee submits to the Credit Committee monthly reports related to the quality status of loans.

At least once a year, UBB executive management presents a full report on the quality of the UBB loan portfolio to the UBB Board of Directors.

Stopanska Banka applies a six-point risk rating system for classifying loans. Loans are rated in categories A0, A1, B, C, D, and E, with E being the highest risk category of non-performing claims. Loans are classified depending mainly on the length of time they have been in arrears.

Additionally, collateral coverage ratios, as well as quality and marketability of collateral are considered in risk classification. Allowances for loan losses are based on specified allowance coefficients which vary in proportion to the risk attributable to each one of the six loan categories.

NBG Cyprus has adopted the Bank's risk rating system. A special Credit Provisions Committee presents a report annually to NBG Cyprus' Executive Credit Committee on the quality of NBG Cyprus' credit portfolio. Banca Romaneasca applies a five-point risk rating system. The risk rating assigned to a loan is determined by three factors: The initiation of legal proceedings against a debtor results in the highest risk rating.

A debtor's financial performance is measured by a combination of quantitative and qualitative criteria, such as the debtor's quantitative financial performance as well as his or her general background.

Banca Romaneasca evaluates these factors and, after receiving a client's annual and semi-annual financial statements, determines the risk rating on a semi-annual basis in April and August. We maintain an allowance for loan losses sufficient to absorb probable estimated losses inherent in the loan portfolio. The balance of the allowance for loan losses is based on ongoing assessments of the probable estimated losses inherent in the loan portfolio that are performed by those members of the Group's management who are responsible for the respective loan types, subject to the approval of the Group's senior management.

Guidelines have been established for the assessment process and are continuously monitored and improved. In general, the allowance incorporates the measurement methods, income recognition and disclosures as provided for in the following accounting pronouncements: Specifically, our methodology has five primary components described below: The amount of unallocated allowance, decreased inas a result of the improvement of our methodology for calculating loan loss allowances by increasingly incorporating recent loan experience as well as geographical and industry segment concentrations.

The allowance for credit losses is based upon estimates of probable losses inherent in the loan portfolio. The amount actually observed for these losses can vary significantly from the estimated.

To ensure this is the case, we evaluate our loans and the methodologies applied thereto, including loss estimation percentages, on a regular basis based on management's judgment of the changing dynamics within the portfolio. For instance, our coefficient analysis incorporates loss and delinquency data for the most recent three-year period, and our analysis of homogeneous loans incorporates loss and delinquency data for the most recent two-year period.

The following table sets forth the loan loss allowances by methodology for the last five years to which the methodology was applied to respective loan balances. The decrease in specific allowances reflects the increased write-offs of corporate loans in The decrease in homogeneous allowances reflects the increased write-offs of unsecured loans as well as the refinement of our methodology for the mortgage portfolio, which takes into account the loss given default and probability of default consistent with Basel II IRB methodology.

The following table illustrates the activity in the loan loss allowance balance over the previous five years: Key ratios related to the activity in our loan loss allowance for the previous five years to which our loan loss methodology was applied are as follows: Non-Performing Loans, Allowance for Loan Losses, and Loan Loss Experience. Non-Performing, Delinquent and Restructured Loans. The Group's Treatment of Non-Performing Loans. Greek regulations with respect to problem loans differ in certain respects from those followed by banks in other countries, including the United States.

The accounting processes applied by the Group for problem loans are described below. Treatment of Non-Performing Loans in Greek Banking Operations. This corresponds to 3. This amount represented 3. Non-performing loans had tended to remain on the Bank's balance sheets significantly longer than would be the case with banks in other Western European countries and the United States.

The Bank generally initiates action to recover or settle outstanding amounts as soon as a loan is determined to be non-performing. The Bank has special branches responsible for the collection of non-performing loans in coordination with the central non-performing loan divisions Corporate and Retail. In addition, the Bank is proceeding with the restructuring of certain non-performing loans.

The terms on which non-performing loans are restructured vary depending upon several factors including how long the loan has been classified as non-performing options the value of the collateral underlying the loan. Restructuring terms generally involve a discount to the total amount of unpaid interest owed to the Bank under the loan and a revised interest rate and repayment schedule.

Non-performing loans that have been restructured remain classified as non-performing loans until they are repaid in full and interest lei not accrue with respect to such loans. If the borrower performs under the restructuring arrangements, however, the Bank ceases to pursue legal action against the borrower under the original loan.

The Bank's non-performing loans in the workout stage are monitored internally by the credit staff at the Bank's headquarters, certain regional branches and specialized branches which handle only non-performing loans.

The prospects of recovery and the estimated losses are reviewed. The Bank establishes provisions, reserve levels and write-offs for these loans. In addition, the Bank's internal audit department examines loan portfolios at branches to determine how loans are to be classified.

Specific provisions for other loan losses are also permitted under relevant Greek tax laws. However, tax penalties apply where loans written off against specific provision are subsequently recovered.

Under Greek tax regulations, non-performing loans can only be written off after all legal remedies for recovery, including the realization of collateral, have been exhausted. Treatment of Non-Performing Loans in Turkish Banking Operations. According to Turkish regulations, loans are classified in five categories depending on their current status and how many days they are past due: Finansbank's policy is to classify loans according to the above-mentioned categories.

Any additional impairment raised in both cases is treated as portfolio impairment. Treatment of Non-Performing loans in Foreign Banking Operations. Vojvodjanska begins legal action against borrowers on a case-by-case basis. The bank has its own Non-Performing Loan Division in charge of collecting non-performing loans.

At the end ofVojvodjanska also began to outsource the collection of some consumer loans to Serbian companies. In some cases, when Vojvodjanska assesses that the company in default has only temporary financial problems but has potential for successful operations in the near future, the bank reschedules or restructures its non-performing loans.

The restructuring depends on the Vojvodjanska's assessment of the ability of the client to regularly repay the loan in the future and the quality of the existing or the additional collateral the client is ready to offer.

In some cases when the client is categorized as "C", "D" or "E" it is possible for the restructuring to include some partial write-off. In accordance with internal regulations, rescheduled loans maintain the same classification until full repayment. New loans that can be possibly granted to these companies under rescheduling should have the additional. The South African Reserve Bank has issued guidelines on how loans should be categorized and what minimum provision should be raised, a summary of which is set forth below.

SABA strictly adheres to these guidelines and reclassifies the status of its loan accounts on the following basis: The Recoveries Division will endeavor to communicate with the borrower in order to obtain repayment. SABA analyzes its loan portfolio by taking into account historical default and recovery rates product by product.

Any additional impairment raised is treated as portfolio impairment and is above and beyond the provision already raised in terms of South African Reserve Bank guidelines. UBB charges penalties on overdue balance sheet interest in accordance with the terms of the relevant loan agreement. These penalties are accrued as an off-balance sheet item. When overdue amounts are fully repaid, UBB renews its balance sheet accruals and it suspends accrual of interest income when loans become doubtful of collection non-performing.

Such income is excluded from interest income until received. Stopanska Banka begins legal action against borrowers on a case-by-case basis. For borrowers that are legal entities, the bank applies. Stopanska Banka has its own Non-Performing Loan Division in charge of collecting non-performing loans.

InStopanska Banka began outsourcing the options of consumer loans to local companies. In some cases, when Stopanska Banka assesses that the company has only temporary financial problems but has potential for successful operations in the near future, it reschedules or restructures its non-performing loans.

The restructuring depends on the Stopanska Banka's assessment of the potential of the client for regular payment of loans in the future and the existing or additional collateral that the client is ready to offer. In some cases when the client is categorized as "D" or "E" it is possible for the restructuring to include some partial write-offs of interest or default interest.

In accordance with current central bank regulations, rescheduled loans remain classified as non-performing for at least six months after rescheduling. After that period they can be gradually upgraded to a higher category only if the client regularly meets its obligations to Stopanska Banka.

NBG Cyprus adheres to the Central Bank of Cyprus instructions for the classification of credit facilities as non-performing. A credit facility is considered non-performing if its balance is in excess of its approved limit or if repayment, in regard to principal or interest or other income, is in arrears for more than three months.

NBG Cyprus stops accruing interest on non-performing loans when more than three monthly installments fall in arrears. Such income is excluded from interest income until it is received. Since February NBG Cyprus has established a streamline Workout Sector in order to manage and minimize non-performing loans. The Workout Sector Committee approves any decision on whether to commence legal actions with respect to non-performing loans and overdraft accounts on a case-by-case basis and transfers them to the recoveries sector.

Recoveries departments with trained personnel have been set up in each district for the intensive and effective collection of debts. The terms on which non-performing credit facilities are restructured vary depending upon several factors including how long they have been classified as non-performing and the value of the underlying collateral.

Restructuring terms generally involve a revised interest rate, repayment schedule and or obtaining additional security and guarantees. Banca Romaneasca employs remedial management procedures applying to any loan falling under the non-performing loan category.

Under the remedial procedures, the usual action performed by Banca Romaneasca in order to recover the amounts due is to enforce or execute the collaterals through court orders.

Determinations of whether certain time deposits in currencies other than the U. The following review is based upon the selected financial data prepared in accordance with U. GAAP and should be read in conjunction with our U.

GAAP Financial Statements and the notes explaining those financial statements included elsewhere in this Annual Report. The financials we refer to herein present Atlantic Bank of New York and NBG Canada as discontinued operations. We are the largest financial institution in Greece in terms of loans and market capitalization, according to an internal review of published financial statements of Greek banks.

We options a wide range of financial services, including retail such as mortgage lending and consumer lendingcommercial and investment banking services and asset management and insurance, through our network of branches and subsidiaries in Greece and abroad. Our principal sources of income have historically been interest earned on customer loans and debt securities as well as commissions. We fund our lending activities and our securities portfolio principally through customer deposits in our branch network.

Outside Greece, the Group is active in eight countries: Turkey, Bulgaria, Romania, Serbia, Albania, FYROM, Cyprus and South Africa, via 1, branches, with approximately One of our strategies is to increase our operating efficiency.

As part of this strategy, we are seeking to enhance our revenue generation potential through sales of businesses outside of our core markets and by modifying our mix of assets in order to reduce the proportion of low yielding assets in our portfolio. Concurrently, we are increasing our lending to market sectors with higher interest rate margins, such as the small business, mortgage and consumer segments.

We are also streamlining our structure in order to improve efficiency, reduce costs and facilitate cross-selling among various divisions and companies within the Group. One of our goals is to preserve our asset quality and reduce the level of non-performing loans, which has had a significant negative impact on our results of operations in the period under review and in prior years. We are further seeking to increase our fee-related activities, primarily commissions from retail services and products as well as those related to investment banking and asset management, although these areas are subject to variations in market conditions.

Recently, events affecting asset-backed CDO's, the US sub-prime residential mortgage market and leveraged finance, have resulted in increased market volatility and adverse changes in the liquidity and value of assets. Key Factors Affecting Our Results of Operations.

Our level of non-performing loans continues to decline from 3. Furthermore, the accumulation of long-term historical data within the Bank with regard to the creditworthiness of the greater part of the economically active population of the country has helped to implement a strategy of targeting creditworthy retail customers.

Furthermore, non-performing loans have remained on our balance sheet significantly longer than would be the case for banks in other Western European countries. Write-offs of collateralized non-performing loans can only be made after all legal remedies for recovery, including realization of collateral, have been exhausted. Our write-offs of non-performing collateralized loans in recent years have been higher than in previous years, which reflects the fact that we have exhausted all legal remedies for recovery of many loans.

The write-off of these loans does not require the exhaustion of all legal remedies. As part of our strategy to preserve the quality of our loan portfolio, we have improved the methods of assessing the credit quality in our loan portfolio. We have also provided for other probable losses inherent in the portfolio to the extent such losses are reasonably estimable.

In Greece, we have taken and are continuing to take steps to improve our credit approval and risk management procedures in order to reduce the amount of non-performing loans that occur in the future.

We have developed and implemented a comprehensive credit manual to govern the lending process, and have fully implemented new credit review and monitoring procedures, which focus on the borrower's cash flow and ability to repay as well as on collateral values.

One objective in restructuring our credit function was to ensure consistency in the loan approval process throughout the Bank while tailoring this process to meet the specific needs of the Bank's borrowers. We options therefore established centralized credit centers, taking the decision-making power for loan approval out of the hands of the branches.

Outside of Greece, we are in the process of fully implementing credit approval and credit review policies throughout the Group's lending operations in order to reduce non-performing loans that occur in the future.

In the future, the effects of the Compounding Law are expected to be more limited with respect to further write-offs. Disposal of Non-Core Assets. As part of our strategy to streamline our operations, we are disposing of certain investments in non-core businesses.

Inwe realized aggregate proceeds. We expect to continue divestitures of non-core assets in the future. In order to streamline their operations and further reduce costs, three Group companies implemented voluntary retirement schemes during EH, NMOC and Astir Palace. The number of employees participating in the schemes was19 and 81 respectively. We have taken measures to strengthen our 12973 base in connection with the modification of our asset mix to comply with Greek capital adequacy requirements as set by the Basel Committee on Banking Supervision under the Capital Adequacy Directive relating to market risk and to selectively expand our operations.

Sources of liquidity are regularly reviewed to maintain a wide diversification by currency, geography, provider and product. The ability to raise funds is in part dependent on maintaining the Bank's credit ratings.

Many factors contribute to the credit rating process, including the rating agency's assessment of the Bank's management capability, the quality of the Bank's corporate governance and the Bank's risk management processes. The Bank considers capital base and regulatory ratios to be important factors in determining credit ratings.

Incentive Stock Options and Non Qualified Options