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Piraeus Bank signed today a definitive agreement with Société Générale regarding the acquisition of Société Générale’s total stake (99.08%) in Geniki Bank.

Piraeus Bank management is confident that the acquisition of Geniki Bank offers synergies to the enlarged Group and facilitates its forthcoming recapitalization. Mr. Michalis Sallas, Chairman of the Board of Directors of Piraeus Bank Group, stated:

"Following the acquisition of selected assets and liabilities of ATEbank, Piraeus Bank continues to play a leading role in the Greek banking sector’s restructuring. The addition of Geniki Bank will further strengthen our capital and funding sources and improves our positioning for the upcoming recapitalization."

This agreement falls within the process framework that has been defined by the Bank of Greece and the Hellenic Financial Stability Fund (HFSF) aiming at the restructuring of the Greek banking system and strengthening its financial stability. The terms and conditions of the transaction have been approved by the HFSF. The transaction is expected to be consumated before the end of 2012 and is subject to final regulatory approvals.

Description of the transaction and key terms

The key elements of the transaction are the following:

• A total investment by Société Générale of €444 mn, subject to a possible upward adjustment at closing date of the transaction, on the basis of Geniki Bank's Net Asset Value as of 30 September 2012. This amount will be paid as part of the completion of the transaction and will consist of two parts:

– An advance to Geniki Bank to be capitalised for a total amount of €281mn(1), as determined by the Bank of Greece;

– Subscription by Société Générale to a bond issued by Piraeus Bank for an amount equal to €163 mn (with a potential positive adjustment), which will provide access either to share capital increases representing 0.5% of the fully diluted number of common shares of Piraeus Bank to Société Générale or else, if the recapitalization process is not concluded by mid-2014, it will be automatically transformed into Tier 1 capital bonds with a permanent write-down mechanism,
• The aggregate consideration for the acquisition of (i) 100% of Geniki shares held by Société Générale and (ii) Société Générale’s receivables corresponding to the capital advances, was agreed at €1 mn. It should be noted that total equity of Geniki Bank stood at €100 mn at the end of March 2012.

• Currently, Société Générale provides no interbank funding to Geniki Bank and the agreement does not envision any such obligation in the future.

Strategic rationale

With Geniki Bank, Piraeus Bank acquires a fully capitalized and self-funded bank. Piraeus Bank is uniquely positioned to restore the operating performance and profitability of Geniki Bank, leveraging upon the synergies that will result from its integration into Piraeus Group.

This acquisition, combined with the contemplated €444 mn investment, will improve the financial and strategic position of Piraeus Bank and will increase its overall attractiveness in the context of the forthcoming recapitalisation of Greek banks.

With this transaction, Piraeus Bank (data as of March 2012, including ATEbank’s acquired assets and liabilities):

- increases capital adequacy ratio by 1.2 percentage point;
- increases its liquidity by more than €300 mn;
- increases significantly the possibility to cover the required level of private participation in the forthcoming share capital increase in the framework of the Bank’s recapitalization;
- reinforces its leading position in the Greek banking market, reaching a 20% market share in deposits and 17% in loans;


- benefits from significant synergies of €50 mn before tax (€244 mn before tax including ATEbank) per annum on a run-rate basis post a 3-year period;
- maintains its loans to deposits ratio at 124%;
- improves the coverage of NPLs by provisions ratio to 60% from 56%;
- improve the cumulative provisions to loans ratio to 9.5% from 7.4%.

Following this acquisition, Piraeus Group pro forma total assets will amount to €77 bn, net loans to €46 bn and customer deposits to €37 bn. Including Geniki Bank and ATEbank, Piraeus Bank Group will employ c.18,000 people, the total branch network will amount to 1,328 units, with a presence in 10 countries including Greece and will service 6 million customers.

Lazard Frères is acting as financial advisor to Piraeus Bank for the transaction.


Athens, 19 October 2012



(1)  This amount may be subject to adjustment following the due diligence performed prior to closing of the transaction by the HFSF.