Piraeus Bank management is confident that the acquisition of MBG offers significant synergies to the enlarged Group and facilitates its forthcoming recapitalisation. Mr. Michalis Sallas, Chairman of the Board of Directors of Piraeus Bank Group, stated: "Following the acquisition of ”good” ATEbank and Geniki Bank last year and, most recently, the acquisition of loans and deposits of Greek operations of Bank of Cyprus, Cyprus Popular Bank and Hellenic Bank, Piraeus Bank continues to play a leading role in the restructuring of the Greek banking sector. The acquisition of MBG further strengthens our capital position and earning generation capability, while the BCP investment into Piraeus Bank brings us over the minimum 10% threshold private sector participation in the upcoming recapitalisation which is a prerequisite for the Bank to maintain its private character. We are confident that we can achieve an even higher participation of private investors, in this landmark rights issue of Piraeus Bank". This agreement falls within the framework set up 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 completed in the second quarter of 2013 and is subject to final regulatory approvals.

Description of the transaction and key terms. The key elements of the transaction are the following:

• Full recapitalization of MBG by BCP for €400 mn, in line with the requirements of Bank of Greece, through the conversion of €261 mn of the existing intercompany funding, in addition to the €139 mn already contributed by BCP into MBG in December 2012 (MBG equity as at December 2012 equal to €198mn). After closing, Piraeus will substitute current funding lines to MBG.
• The consideration paid by Piraeus for the acquisition of the recapitalised MBG will be €1mn.
• The current intragroup funding will be reimbursed by MBG to BCP in two tranches: the first one, in the amount of €650 mn, being paid on the date of closing of the transaction and the second one of approximately €250 mn within 6 months from closing. After closing Piraeus will substitute current funding lines to MBG.
• BCP to invest €400mn in a private placement with the exclusion of pre-emptive rights within the HFSF recapitalization framework, leading to a minority stake in Piraeus Bank.

Strategic rationale The acquisition of MBG will further bolster Piraeus Bank’s viability through the creation of synergies from the integration of MBG onto Piraeus Bank’s platform. This transaction, combined with the contemplated €400mn investment by BCP into Piraeus Bank, is expected to further enhance shareholder value and strengthen the financial and strategic position of Piraeus Bank, thus, increasing the attractiveness of Piraeus Bank for private sector investors and the value offered to investors, including the HFSF, in the context of the forthcoming recapitalization. By acquiring MBG, Piraeus Bank acquires a fully capitalized bank in line with Bank of Greece requirements. Piraeus Bank is uniquely positioned to enhance significantly the MBG platform based on Piraeus Bank’s best practices, leveraging upon the expansion into specific target groups and alternative channels, maximizing the synergies that will result from its integration into Piraeus Group.

With this transaction, Piraeus Bank (pro-forma as of 31 December 2012):

• Reinforces its leading position in the Greek banking market, reaching a 29% market share both in terms of deposits and loans;
• Benefits from estimated synergies of €531 mn before tax p.a. on a fully phased basis post a 3-year period;
• Achieves the 10% minimum required level of private participation in the forthcoming share capital increase in the framework of the Greek banks’ recapitalization.

Following this acquisition, Piraeus Bank Group pro forma total assets will amount to c. €103 bn, net loans to c. €67 bn and customer deposits to c. €55 bn. On a pro forma basis, Piraeus Bank Group will employ c. 25,000 people and the total branch network will amount to 1,765 units, with a presence in 10 countries in addition to Greece. Barclays Bank PLC, acting through its investment bank, Deutsche Bank AG, London Branch, and Lazard Freres are acting as financial advisors to Piraeus Bank for the transaction.