a periodical publication for the employees of the NBG Group

Leading AheadISSUE NO. 11 - October 2008

N A T I O N A L B A N K

O F G R E E C E

The InternationalFinancial Crisis

Our NewsEditorial Cover Story

DevelopmentsDevelopments

Our Group Health & Safety

Leading Ahead

Internal Communication Team,Nikos Kanelopoulos, Evi Tsioni, Fotini Skarlatou, Sophia Karakassi

(+30) 210 3342230 (or extension 12230), (+30) 210 3342919(or extension 12919)email: epikoinonia@nbg.gr

Title of the Greek edition: Πρώτοι Εμείςa periodical publication for the employees of the NBG GroupISSUE NO. 2008Editors

Tel:

11 October

Internal distribution

http://ete/EsotEp/Η Τράπεζα/Ανθρώπινο Δυναμικό/ “Πρώτοι Εμείς”

The Bank/Human Resources/ “Leading Ahead”

Please send us your views, topics you would like us to publish or even an articlewritten by you, at epikoinonia@nbg.gr

No part of this publication may be republished, reproduced or altered,in any form or by any means, mechanical, electronic or photocopying,without the prior written permission of the publisher (Law 2121/1983 and rulesof international law in force in Greece).You can access this publication through the Web atFor the Greek edition follow the path:For the English edition follow the path:

DevelopmentsDevelopments Interview

The magnitude of the current crisis is unprecedented. It has hit markets all over the globe and is expected to impact hard on the realeconomy everywhere. It began with the subprime mortgage bubble in the US, which led to the collapse of a number of majorbanking corporations on both sides of the Atlantic, obliging the state to step in and foot colossal bills. When considering what therepercussions of the present crisis will be on the real economy, economic history has shown that on the heels of every credit crisiscomes a downturn in the real economy. Accordingly, under the current circumstances, we should expect a sharp slowdown andrecession across the developed world as a whole.

Here in Greece, while the going will undoubtedly get tough, we should recognize that, on the one hand, National Bank of Greece is notassociated with the toxic products at the heart of the global credit crunch and, on the other, the relatively conservative credit expansion ofthe domestic market has caused our banks to pursue a more responsible business policy and enjoy the shelter of surplus liquidity andfunds so as to be in a position to confront the impending slowdown in the Greek economy.

NBG's capital adequacy has further improved thanks, firstly, to the fact that the dividend for 2007 was distributed primarily in the form ofshares, secondly, to the funds which the bank raised through the issue of preference shares in the US last September and, thirdly andmost importantly, to the high earnings of the bank throughout 2008. In the sphere of liquidity, the additional rise in deposits and thescheduled issue of covered bonds will further boost NBG's surplus liquidity.

As I write (24 October), NBG's share is in sharp retreat, having lost, during the course of the past 12 months, the total of its gains since2003. I can assure you that the pressure being exerted on NBG's share price does not reflect the core financials of the bank, which, as Ihave already noted, are far better than satisfactory. Rather, they reflect the mood of panic that seems to have gripped stock exchangesaround the world, as they retreat before the fear of a recession the likes of which have not been seen in recent decades. It is worth bearingin mind that our share price has declined no more than that of other banks on the international stage; unfortunately, however, we are allbeing forced to pay the price of the excessive global leverage of the past two or three years.

In addition, there are concerns about the macroeconomic outlook of the countries of SE Europe. However, my view is that the economiesof these countries have a built-in resilience that is not properly reflected by the market indices. To sum up, I am confident that our shareprice does not truly reflect the fundamentals and the outlook of the NBG Group.

Best regards,

Pavlos MylonasChief Economist & Chief of Strategy

The global banking crisis: its causes and the conclusions to be drawn

Our News

Productivity bonus

Following the successful pilot

implementation in 100 branches, the

Bank is now implementing on an ad hoc

basis a Productivity Bonus program for

all tellers throughout our Branch

Network. The goal of this move is to

reduce waiting time and improve

customer service thus contributing to an

overall improvement in our relationship

with our customers.

The program will run for the period 1

October to 31 December 2008 and will

be eligible for all tellers, who will

receive pay according to productivity.

This applies to all persons who work

exclusively as tellers at the counters as

well as to those who work in other posts

in the Branches but are either

temporarily assigned to teller duties,

during peak hours, or stand in as teller

for an absent colleague.

Information regarding the method used

for calculating the productivity bonus

can be obtained from Circular No.

86/30.09.2008.

for all Tellers

International HRManagement

Meeting

On 25 July 2008, the first meeting ofHR Managers from throughout theNBG Group took place at the AstirVouliagmenis Hotel.

Mr.Stavros Gatopoulos

Mr.Agis LeopoulosMr. Pavlos Mylonas

Mr. DimitrisLefakis

Mr. Ioannis Pehlivanidis

The purpose of the meeting was toenhance cooperation and createsynergies between the various countriesin which the NBG Group is active in thefield of HR management.

HR Managers from Finansbank,Romaneasca, Stopanska, UBB,Vojvodjanska, as well as from the NBGNetwork in London, Cairo, Cyprus andAlbania had the opportunity to get toknow each other and exchange viewsfor the purpose of:

Coordinating their local actions sthey could achieve the HRManagement targets established inthe Business Plan at a Group level.

Sharing the HR Managementpractices they implement at the locallevel, and the challenges they face.

To enhance coordination of local HRManagement activities, the Head of HRand Group Internal Communication,

presented theprimary targets of the Business Plan andset out the Group's priorities. Thesewere translated into short-term andmedium-term projects and ProjectTeams were set up to implement them.

Also present at the meeting were, Head of International,

, Chief Economistand Chief of Strategy, and

Chief Risk Officer. The HRManagers had the opportunity to get toknow each other and exchange viewswith the Deputy Chairman and DeputyCEO at thedinner held the previous night.

o

Upgrade

NBG Internet Banking is now operating

in a new environment offering extra

transactions and functions to our

customers.

In this new environment, information is

available on current account balances

as well as on the customer's latest NBG

Credit Card transactions and online

payments. Useful tools are also

provided to customers, such as a tool

for calculating the IBAN number for

NBG accounts and new payment

options such as paying the fees for the

National Property Register, the

Municipality of Athens, and the Single

Real Estate Duty - ETAK.

Throughout transaction time users while

logged can view brief announcements

with useful information and assistance,

updates on their current account

balances as well as a listing of their last

ten transactions. They can also choose

up to 10 types of transactions that they

use most often and have immediate

access to these without having to

navigate through numerous screens and

menus.In addition, the ETHNOfiles system has

been also transferred to this new

environment and thus makes the option

of exchanging electronic files with the

Bank available to our business

customers.

NBG Internet Banking

NBG supports“Lung Cancer Awareness Month”

On 25 July 2008, the first meeting of

HR Managers from throughout the

NBG Group took place at the Astir

Vouliagmenis Hotel.

The World Health Organization (WHO) has

declared November as the Lung Cancer

Awareness Month. In this context, the

Oncology Department of Sotiria Hospital

under the auspices of the Ministry of Health

and the Medical School of the University of

Athens are organizing a series of actions

under the motto “Get Informed and Decide

for Yourself”.

As a responsible “citizen”, NBG

wholeheartedly supports this very important

initiative in order to improve quality of life for

all the people of Greece. Accordingly, NBG is

sponsoring the publication of “Myths and

Reality”, an informational brochure which

includes answers to many of the frequently

asked questions surrounding the critical

issue of Lung Cancer. The brochure will be

distributed to NBG personnel and it will also

be circulated to the public through its

inclusion as a supplement in Sunday

newspapers across the country.

In addition, from 3 to 7 November 2008

information booths staffed with qualified

medical doctors will be set up in central

points throughout Athens (in Omonia Square,

Kolonaki). The doctors at the booths will

provide the public with free breathing tests

measuring lung function as well as with

valuable information on cancer and related

topics. After the end of this period, one of the

spirometers will be given to TYPET to offer

NBG employees the opportunity to take

spirometry testing after scheduling an

appointment.

Finally, at the following website

you can find answers to

questions or read interesting information on

lung cancer and its diagnosis.

www.lungcancer.gr

The first signs of the

unprecedented crisis we are

now facing appeared early

last year with the tremors felt

in the market for sub-prime

mortgage loans in the United

States. Today, the crisis has

evolved into a general lack of

faith among financial

institutions, which in turn has

led to bankruptcies, forced

mergers and state-funded

bail-outs of banking giants.

The article below takes a

close look at the financial

credit crisis and concludes

that there is much to be learnt

from it.

The start of the problem dates back tothe period following the suddencollapse in value of high-techcompanies in the U.S. at the start ofthe 21 century. The bankingregulatory authorities in the U.S.reacted to this collapse byaggressively lowering interest rates inorder to avoid a serious slowdown inU.S. economic activity following theevents of September 11 .

In the end, the U.S. Federal Reserve(the Fed) reduced the interventioninterest rate to 1%, a record low.

This led to an extended period of lowborrowing rates in the United States,with which quite a few people publiclydisagreed, and which had two verysignificant effects. On the one hand,there was an increase in thewillingness of the majority ofhouseholds to reach out and takeadvantage of cheaper borrowing ratesto finance an improvement in theirquality of life and, on the other hand,there was a greater desire by financialand credit institutions to post evergreater profits.

st

th

Main Article

The InternationalCredit Crisis:

By Chief Economist & Chief of

Strategy

Pavlos Mylonas

Causes and observations

for the future.

This was accompanied by anunderestimation of the risk associatedwith this type of lending. The creditexpansion also led to a hereto unseenincrease in the price of real estate in theU.S., which in turn led to more and morelending and less and less rigorousscreening of borrowers' ability to repaytheir debts.

In seeking to exploit to the full therapidly expanding loan market, financialinstitutions, principally in the U.S. butalso in Europe, adopted a businessmodel that was based to a large extenton securitization. According to thismethod of securitization, a pool of loansis formed by commercial banks and isthen sold onwards to a wide range of

financial institutions and investors. Thelargest part of the value of the loans isthus transferred outside of the balancesheet of the banks thereby reducing theneed for maintaining matching capitalreserves and liquidity. In effect, thisallows the most risky part of the loan tobe distanced from commercial banks.This type of securitization was helpedby the creation and the quick spreadingof financial instruments whosecomplexity increased proportionately totheir opaqueness.This made it very difficult for them to beevaluated correctly even by reputablerating agencies. These financialinstruments were purchased by otherfinancial institutions, thereby transferringthe problem to Europe as well. As a

result of this practice, Banks did notappear to be shouldering these loansthemselves on their balance sheets, andthis led to them to grant loans that hadan even greater credit risk on the basisof much less paperwork and without theneed for adequate supportingdocumentation. This growth model ledto an excessive increase in borrowingby households and this demand alsomeant that financial institutions becamemore reliant on innovative types ofshort-term funding of off-balance sheetsecuritized loans the financing of whichthey ended up guaranteeingthemselves.

U.S. Federal Reserve Bankintervention rate

Period of

exceptionally

relaxed

monetary

policy

U.S. Real Estate Prices Index: S&PCase/Schiller10

Peak = June 2006

January 1998 = 100

Jan-9

8

Oct-

98

Jul-99

Apr-

00

Jan-0

1

Oct-

01

Jul-02

Apr-

03

Jan-0

4

Oct-

04

Jul-05

Apr-

06

Jan-0

7

Oct-

07

Jul-08

Feb-9

8

Oct-

98

Jun-9

9

Feb-0

0

Oct-

00

Jun-0

1

Feb-0

2

Oct-

02

Jun-0

3

Feb-0

4

Oct-

04

Jun-0

5

Feb-0

6

Jun-0

7

Feb-0

8

Main Article

This model operated relatively well for

the banking sector as long as the U.S

real estate market, on which it mostly

relied, was on an upward trajectory.

Unfortunately, from 2006 onwards,

following gradual increases in the interest

rates by the Fed, the first signs of

distress appeared in the U.S. real estate

market. The downward spiral

commenced and has continued to the

present. The inherent weakness of the

business model of banks soon became

painfully clear.

By the beginning of 2007 the problems in

the repayment of sub-prime mortgage

loans were becoming acute. Many U.S.

households were driven to the point of

being unable to keep up with their

payments and this in turn led to an

increase in repossessions, thereby

leading to a rapid decrease in the value

of real estate. The next stage in the crisiswas the reduction in the value, initially, of

the securitized loans and, subsequently,

of a range of other securities that had

also been valued during the period of

market ebullience. The total amount of

the losses has been estimated by the

IMF at $1 trillion (an assessment which

has since been revised upwards to $1.4

trillion). The question that immediately

arose was who were the specific financial

institutions that had suffered these

massive losses, which in turn set off a

widespread loss of confidence among

banking institutions and, as we can all

see, brought about a substantial

reduction in inter-bank lending and a

corresponding increase in the cost of

borrowing in the interbank market.

The next serious step in the crisis

occurred when the U.S. government

authorities decided not to support

Lehman Brothers, thus signalling that any

bank, regardless of its size, could be left

to collapse and that taxpayer money

would not be able to save them. In the

immediate aftermath of this, many

banking giants either filed for bankruptcy

or were forced to seek immediate

government assistance. All of this

occurred despite the fact that key central

banks had adopted radical measures to

increase liquidity for an extended period

of time in the interbank market and had

significantly expanded the acceptable

range of securities that they would accept

in order to make liquidity available to

credit institutions. The liquidity crisis was

evolving into a crisis of the

creditworthiness of the entire banking

system.

To come to current developments, the G7

nations, with the U.K. taking the lead,

have decided to adopt a more

comprehensive approach to saving the

banking system. Ingredients common to

the measures taken in Europe and in the

U.S. include a) the buy-out of the so-

called toxic assets by the state, b)

ensuring a process whereby

recapitalization of credit institutions is

achieved through the purchase of

preferred shares by the state, and c)

governments guaranteeing not only

customer deposits in credit institutions

but also the bonds of these institutions.

It will take time for these measures to

bear fruit and for confidence to return to

the system. In the meantime the real

economy will begin to feel the squeeze

from the credit crunch.

Household lending as a percentageof GDP (% December 2007)

U.S. Spain Euro area Greece

Economic history has shown that

after every credit crisis there is a

slowdown in the real economy, which

stems from the need of banks and

other financial organizations to

reduce the amount of the lending

burden they carry. Today it is

estimated that we shall see zero or

negative GDP growth on both sides of

the Atlantic for 2009 as compared

with earlier estimates of 1.6% and

1.3% in 2008 for the U.S. and the

euro area respectively, and moderate

rates of growth for the period 2003-

2007 of around 2.8% and 2.0% for

the U.S. and the euro area

respectively. The need to reduce

borrowing activity by households and,

by extension, the lending of banks is

increasingly apparent and will most

probably be more severe in the U.S.

and the United Kingdom than in the

euro area.

Another problem will be how to move

ahead once the storm is over. At this

point it is likely that discussion will

focus on the need to re-examine not

only the regulatory framework under

which banks operate but also the

factors that led to the current mess.

Without doubt, authorities will lose no

time in implementing measures that

will put a brake on certain types of

banking activity, especially where off-

balance sheet financial assets are

concerned. The method of measuring

banks' liquidity risk will also be re-

examined and limits realigned, as will

the need for adequate safety valves.

This will ultimately lead to an increase

in the total level of capital adequacy

reserves required of Banks.

Real GDP growth and IMF estimates (%)

U.S. Euro area Japan United Kingdom

Avg. 2003-2007

Est. 2008

Est. 2009

Developments

NBGat the 73 annual

ThessalonikiInternational Trade Fair

rd

The Thessaloniki International

Trade Fair was held for the 73 time.

Its focus was on the Environment

and Ecology.

rd

TIn line with this focus, our central

theme was “ ”

and in this context actions and initiatives

taken by the Bank in the sphere of its

“Responsibility” Corporate Social Action

Program were presented at our Branch.

The actions and initiatives illustrate and

mark not only our very large social

contribution but also our respect for the

Community, Culture and the

Environment.

An especially enthusiastic response was

reserved for the

which was this year fully

renovated in line with the model of our

new concept for the Branch Network.

Many positive comments were received

by visitors who dropped by the Branch

and who were especially enthusiastic

about the new branch image as well as

the quality of customer service.

The Branch was officially opened by the

Chairman and CEO of the Bank Mr.

and by the Deputy

Chairman and Deputy CEO Mr.

. During the opening

ceremony the Branchwas visited not only by numerous Bank

employees but also by many of the

dignitaries who were present at the Fair

including th Deputy Minister of Sports

Mr. , member of parliament

Mr. , the Chairman of the

Athens Stock Exchange Mr.

, the Chairman of Hellenic

Petroleum Mr. and

CEO Mr. I. Kostopoulos, and Olympic

Taekwondo medallist

.

Responsibility for Life

“New Face” of our

Branch,

Takis Arapoglou

Ioannis

Pehlivanidis

G. Ioannidis

G. Orfanos

Sp.

Kapralos

T. Christodoulou

Alexandros

Nikolaidis

e

6-14 September 2008

Spyros Kapralos and Takis Arapoglouat the official opening of the Branch

The "new face" of our Branch

The Bank keeps abreast of changestaking place in the banking servicessector, focusing on a customer-orientedapproach and responding dynamicallyto ever intensifying competition so as tosuccessfully attract funds and increaseliquidity. Accordingly, it has set up theGlobal Transaction Services (GTS) unitunder the guidance of ExecutiveGeneral Manager of Operations Mrs.

.

In his opening speech the ExecutiveGeneral Manager of Corporate andInvestment Banking, Mr. A. ,said that “NBG in order to achieve itsambitious goal of becoming the leadingcredit institution in SE Europe and theEastern Mediterranean has to offer itscorporate clients superior services thatwill facilitate the whole range of theirday-to-day activities, i.e. LiquidityManagement, Trade Finance andBusiness-to-Business services, takingfull advantage of its internationalpresence”.

These three main areas, which seek tobring together products offeringintegrated solutions, enhance theservices offered and creatively promotealternative service channels, were

presented in detail by the heads ofGTS.

The participants attendedpresentations on the TS units'organizational structure, on corporatestrategy issues, on innovative productsand services and on organizingcooperation between the Group's unitsand countries.

The workshop was attended by officersfrom affiliates in Greece and abroad. Allsectors of Corporate Banking wererepresented (large Corporate,Commercial, Small Business) CashManagement and Trade Finance.Country representatives presented thelocal market, the products and servicesthey offer, and the structure of businessunits and channels available,prompting interesting discussion, andexchange of ideas and know-how.

The two-day event ended withdiscussions, action plans through to thenext meeting, cooperation proposals,and reiteration of our objective to makeNBG the banker of choice amongcorporate clients in all the countries inwhich it operates.

Nelly Tzakou-Lambropoulou

Tourkolias

1 GlobalTransaction

ServicesWorkshop

st

On 4 and 5 July the first NBG Group

Global Transaction Services Workshop was

held at the Divani Apollon Hotel in Kavouri.

th th

Developments

Leading Ahead: Both inbusiness and in sport, beingfirst requires hard work andsacrifice. Given yourvaluable experience, whatwould you have to say tothose who want to reach thetop?

Leading Ahead: Both in business and in

sport, being first requires hard work and

sacrifice. Given your valuable

experience, what would you have to say

to those who want to reach the top?

Alexandros Nikolaidis:

Pigi Devetzi:

A.N.:

P.D.:

A.N.:

P.D.:

The only way to

achieve your dreams is dedication,

persistence and hard work. If we remain

true to these, we can overcome any

obstacles we may encounter along the

difficult path to success.

To succeed in any

endeavour, not just sports, you need to

really love what you are doing. That said,

you also need constant effort, a lot of work,

patience, perseverance and plenty of

sacrifice.

Having achieved my childhood dream

of participating in the Olympic Games and

winning medals, I think my only goal now is

to get a gold medal in London.

My goal is to continue what I'm doing.

As long as I remain at a high level and on

my feet, I will go on competing and aiming

for distinction. I want to take part in the

London Olympics in 2012. Of course four

years may seem a long way off, but in fact

the London Games are really just around

the corner. Naturally, my plans for the future

include starting a family. I'm already

married and I would like to have a child.

There certainly are young promising

athletes that in the near future can become

our country's next Olympic champions. My

brother Anestis Nikolaidis is among them

and at the age of just 18 he won the bronze

medal in the European Championship this

year. I believe that others will work equally

hard to bring lots of medals to Greece.

Of course, there are young people in

track and field that I think are capable of

achieving distinction. It's just that now, after

all the unpleasant developments connected

with doping, the incentives they will be

given to continue will play a critical part.

L A.: After 2 Olympic medals and

distinctions in major sporting events,

what are your plans for the future?

L A.: How do you see the future of

Taekwondo and of track events in

Greece? Are there any new athletes that

you think stand apart?

.

.

In a special event held in

Megaro Mela on 4 November,

NBG honoured Pigi Devetzi

and Alexandros Nikolaidis, the

two Olympic medallists that

made us proud in the Beijing

Olympics. The Chairman and

CEO of NBG, Mr. Takis

Arapoglou, presented the

awards and at the ceremony

the two champions spoke to

Leading Ahead, giving us

some “top advice”.

"Leading ahead"…with medals!

Interview

L.A.: There is a lot of talk nowadaysabout the right balance betweenprofessional and personal life. How doyou achieve that? L.A.: What has been NBG's contribution

to what you have achieved?A.N.:

P.D.:

A.N.:

P.D.:

There is no such thing as the rightbalance. When you really know what youwant from life, effort is not an issue.Everything in life is a question of choice,and when you pick a path and you know it isrough, you have to be sure this is what youreally want. Then everything becomes easy,because it is really your choice.

Like I've said, I want to have a child. Inthis sense, it is really hard to successfullycombine a professional and a personal life.

But I believe that if this is what you reallywant, you can make it happen.

I was lucky enough to have NBGstanding by me in one of the toughestmoments in my life. It was when I hadbroken my leg in the Sydney Olympics andthe Bank was among the few who believedin me and supported me throughout thedifficult road that lay ahead. After all that, wehad the happiness of sharing theachievements that this support brought andwinning the medal.

NBG has been my sponsor since2003. It is very important for athletes tohave a sponsor supporting their efforts andespecially NBG, who I wish to thank andhope will support our efforts into the future.

Alexandros Nikolaidis, Olympic taekwondo silver medallist Pigi Devetzi, Olympic triple-jump bronze medallist

Our Group

Brief History

Values, culture, human capital

Stopanska Banka (SB) is the oldest bank in

the country, established in 1944 with a long-

standing tradition of providing financial

support to all big investment projects and

companies in the country. In 1990, SB issued

shares and in the beginning of 2000 it was

acquired by the NBG, thus becoming a

member of a leading banking group in

Southeast Europe. In addition to NBG's

majority stake, IFC and EBRD participate in

the Bank's capital with 10% share each. The

acquisit ion helped strengthen SB's

compet i t i veness through in tens ive

restructuring. SB launched a sophisticated IT

system, implemented a new organizational

scheme, cleaned up its loan portfolio,

introduced standardized procedures for

decision-making, risk management and

procurement, reduced excess labour and

became the country's leader in corporate

governance. As a member of a large

international group, SB plays a crucial role in

strengthening the country's financial system.

And it provides companies and households

with a wide range of the cutting-edge services

within easy reach.

Valuing its employees as its greatest asset,

SB aims to constantly invest in its human

capital. During the years following the

acquisition, numerous new policies and

procedures for more effective human capital

management were introduced, which created

conditions for business growth. The constant

aim of the HR management is to enhance the

professionalism, reach objectivity in

assessment, encourage initiative, retain and

motivate its key performers, and increase the

operational excellence.

Stopanska Banka places great emphasis on

job satisfaction and training, since motivated

employees are the key to business success.

The management acknowledges that SB

business depends on the competence,

experience and professionalism of its

employees. Putting this management

philosophy into practice, the Bank offers

training programs that focus primarily on

customer care, sales techniques, micro

lending, retail banking, IT and software,

leadership and management, and learning of

foreign languages, both in the form of in-

house bank training and professional

seminars run by external certified companies

and institutions in the country and abroad.

The newly introduced Recruitment policy,

Performance Management Procedure,

Performance Evaluation System and

Personal Development Plan in the past years

delivered significant changes in the

qualifications structure of the SB workforce

toward higher education proficiency. By the

end of 2007, 3% of SB's staff held masters

and doctoral degrees compared to only 0.5%

in 2000.Similarly, the proportion of employees with

graduate education increased from 32.9% in

2000 to 42.3% in 2007.At the end of 2007, SB

had a total number of 1,080 employees,

slightly higher compared to 1,046 a year

before. The main reason for the higher

number of employees was the expansion of

the branch network. The average age of the

employees at the end of 2007 was 45 years.

As a good example of putting into practice the

strategy for effective human capital

management, the Bank in 2007 approved

promotions of 40% of the total number of

employees (up 10% on 2006), for the results

achieved and to enhance motivation.

Other initiatives undertaken during 2007

aimed at upholding the company's values and

the business strategy that places growth,

innovation and customer satisfaction at the

forefront.

STOPANSKABANKΑ

A financial partner of everyhousehold in Skopje

Competitive advantages and strategictargets

Bank's achievements

Leading Ahead in Corporate SocialResponsibility

Human and labour rights

Staff expertise, in hand with the largestbranch network in the country and advancedIT applications, as well as a strong capitalbase and synergies arising from membershipof the NBG Group, appeared to be the keycomponents of SB's competitive strengths indealing with increasing pressure frombusiness rivals.Looking to the future, sustained growth,profitabil ity and improved customersatisfaction are our main concerns. The keyto the successful implementation of theBank's growth strategy, as envisaged in themedium-term Business Plan, lies in achievinghigh customer satisfaction by placing theclient at the heart of the company's thinkingand forging a market position thatdistinguishes SB from the others throughstrengthening its brand name.

asset size,loan volumes and deposit base. With ongoingproduct and processes enhancement, inorder to maintain its competitive advantage,Stopanska Banka serves more than half thecountry's population, making it a financialpartner of every household in the country.

Key achievements of Stopanska Bankaduring 2001-2008:

Completion of its internal organizational and functional restructuring inline with best banking practices, andtransformation into a cutting-edge andcustomer-oriented bank.

During this period the bank increasedits capital by EUR 92 million, of which47 million through issue of shares and24 million through issue of subordinated debt.

The Bank realigned its asset mix in

favour of higher yield assets such asretail and corporate loans, as well asrisk-free government securities,resulting in a steadily rising loans-to-deposits ratio, increasing profita bilityand more efficient use of Bank's fundson the long-term perspective.

While keeping high the proportion ofprivate sector deposits in totalliabilities, there was a qualitativechange in the structure of liabilitiestowards expanding the funding basethrough long-term and stable sourcesof funds, and at the same timeenlarging the capital adequacy of theBank.

SB successfully maintained itscompetitive advantage and leader shipin retail lending by means of its widep roduc t range w i t h supe r i o rcharacteristics and competitive pricing,investments in technology-intensiveinfrastructure and unique alternativesales channels.

Emphasis on small businesses andsustained promotion of the two mainmicro products consolidated SB'sposition in the lucrative micro-lendingmarket. Building long-term relationswith top-performing companies as areliable partner further expanded thelarge corporate loan book.

In order to achieve maximum benefit forour customer's investments, SBpioneered among the Group theTemenos T24 application as the mosttechnically advanced banking systemavailable today.

This was the fourth consecutive year in whichSB participated in the world's leadingvoluntary corporate citizenship initiative. In2007, the Bank led the way in furtherreinforcing the 10 Principles of the UN GlobalCompact in the country as a set of core valuesin the spheres of human rights, labour

standards, environmental sustainability andanti-corruption.

The main achievement in 2007 wasadvocating the 10 Principles of corporatesocial responsibility to larger audiences,enhancing awareness and exchanging goodpractices for CSR advancement.

In 2007, SB firmly backed universallyaccepted human rights, particularly throughthe participation of the Chief Executive Officerin the UN Global Compact Leaders Summit.The participation in this truly global assemblyis a signal to employees, shareholders,c l ients , suppl iers , communi ty andcompetition, that the Bank is firmly committedto principles of good corporate citizenship.Thus, the Bank will use all its humancapacities in enhancing the local network andpromoting awareness.

In addition to the 10 Principles, the Banksupported broader UN goals, in particular theMillennium Development Goals. In thismanner, by facilitating accessibility andoffering more competitive terms for SBproducts, the Bank created better opportunityfor economic growth. Being the leading bankin the country's financial market, SB assumesits role as one of the driving forces in thenational economy by investing in educationas one of the most important contributionsthat SB can make to develop human capital,which supports economic competitivenessand social progress.

In this era of high technological andinformation literacy, Stopanska Banka ADSkopje put in place developed mechanisms inorder to protect one of the basic human rightsthe right to personal data privacy. Moreover,the Bank distributes among its employees themonthly electronic Newsletter that informsthem about the latest IT secur i tydevelopments, tools and data protection.

By sticking to its strategy and business plan,which is designed on the basis of markettrends and the expectations of our clients,Stopanska Banka maintained its leadingposition vis-à-vis capital strength,

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Our Group

Stopanska Banka fosters a culturewhere the best people want to work,where people are promoted accordingto their merits, where they treat eachother with respect and whereopportunities to develop are widelyavailable to all. SB invests in talentdevelopment and supports employeesin gaining new skills, managing theirwork/life responsibilities and enjoyinga satisfying career. Employees work asmentors for each other, as well as forothers in the community.

In 2007, the Bank played an active rolein the project “Accelerating CSRpractices in the new EU member statesand candidate countries (Bulgaria,Croatia, Hungary, Lithuania, theFormer Yugoslav Republ ic ofMacedonia, Poland, Slovak Republicand Turkey) as a vehicle forharmonization, competitiveness andsocial cohesion in the EU”. The Base-Line Study on CSR practicesdifferentiates Stopanska Banka asdistinguished example for integrationof sustainability principles into thebusiness strategy of the Bank.

In 2007, the Bank aimed at advancingclimate change solutions and took theopportunity to demonstrate climateleadership at both individual andcollective level by supporting “Caringfor Climate” Statement and donatingsignificantly in CO2 reduction. Furtheron, SB made progress in reducingoverall energy consumption by usingenvironment-friendly materials andclean technology in construction of itsnew branches and strengthened its

policy to restrain from supportingenvironment-harmful projects.

SB is guided by its desire to strengthenits values and defend corporateinterests by promoting, internally andexternally, the highest standards ofcorporate governance. Contributing tothe combat against money laundering,all forms of financial crime and terroristfinancing, SB has implemented atailor-made tool for this purpose.

In terms of corporate soc ia lresponsibility, SB stands by theprinciple that aligning companyoperations with universal values is notonly a good strategy for managing and

minimizing the numerous risks thatbusiness faces, but can be a strongdriving force of value and success. SBshall uphold transparency, exchangeof experience, dialogue, partnershipsand other initiatives, in order toadvance corporate social responsibility and send a message to otherstakeholders that the company'scorporate citizen engagement is anoperational and strategic priority.

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Environmental standards

Anticorruption

Determination for the future

Nicotine, Addiction, Dependence

The whole smoking affair is quitepuzzling. The only thing that makesus start smoking is that others arealready doing it. Still, most of thosesmokers wish they had never startedthe habit.

Smoking is a harmful habit that hasserious effects on society and ruinsthe quality of life for individuals andcommunities. Globally, the use oftobacco is responsible for moredeaths than any other known cause.It is estimated that each cigarettetakes 5.5 minutes off a smoker's lifespan.

According to scientists:

One in two smokers will die froa tobacco related cause.

More than 80% of lung cancecases are the result of smoking.

In the coming years we expect arise in lung cancer incidencesamong women.

It is estimated that in 2025smoking-related deaths willexceed 10,000,000 worldwide.

The spread of smoking is due to twofactors:

the on thebody, i.e. in the initial stagetemporary stimulation, and lateraddiction;

the formation of a mechanical

Dependence on cigarettes is sopowerful that just knowing thedamaging effects of smoking will nothelp one quit the habit. Research hasshown that 66% of smokers know thatsmoking can kill them.

Scientists now consider smoking tobe an addiction and nicotine anaddictive substance as dangerous asalcohol, heroine and cocaine.Tobacco addicts are viewed aspatients and they are supported intheir efforts to quit smoking in variousways, including medication.

effects of nicotine

psycho-motive habit.

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Health & Safety

As part of the Bank'santi-smoking campaign,which aims to informemployees of the harmfulconsequences ofsmoking and to helpcreate a cleaner workenvironment, we havecollected and bring toyou some veryenlighteningexcerpts from the book"Smoking; a Pleasurethat Kills", written by thejournalist KostasTsarouchas.

A pleasure that kills

Smoking

To sum up, the main symptoms ofnicotine dependence are the following:

Inability to quit: persons sufferingfrom nicotine addiction have madeone or more serious attempts to stopsmoking, but have failed.

Withdrawal signs and symptoms: Theefforts of persons trying to stopsmoking are attended by anoverwhelming desire to smoke. At thesame time, they experience intensestress, irritability, restlessness,anxiety, loss of concentration,headaches, drowsiness, andstomach upsets.

Persistence of smoking in spite ofhealth problems: Nicotinedependence obliges smokers to goon smoking even when they knowthat the habit is life threatening.

Social effects: Nicotine addicts mayat any moment leave a gathering inorder to smoke. They may interruptrelations with others or distancethemselves from family members, oravoid certain restaurants or otherplaces so that they will not bedeprived of a cigarette.

, is the message sent out byscientists.

A burning cigarette releases some 4000substances in solid, liquid or gas form.Many of these are categorised asaggressive, toxic or carcinogenic.Scientific research focuses on the threemain substances that are particularlyharmful to health: nicotine, tar and carbonmonoxide.

The prevailing impression that smokingcauses only cancer is wrong. All smokersneed to know that the primary health riskis heart disease. Overall, smokers run agreater risk of suffering a heart attackthan non-smokers.It is estimated that each cigarette takesoff 5.5 minutes from a smoker's lifespan.

Moreover:

Numerous studies carried out in thepast 30 years have shown thatsmoking causes damage to therespiratory routes, which can laterdevelop into Obstructive LungDisease, in other words into chronicbronchitis, emphysema, and ingeneral respiratory failure.

Chronic Obstructive Lung Disease isthe “unknown” disease suffered bysmokers and it is estimated that800,000 suffer from it in Greecealone.

According to a study carried out bythe Hellenic Thoracic Society, 11.6%of men and 4.8% of women sufferfrom the disease, half of them withouteven knowing it.

Smoking is associated with cancer ofthe bladder, of the oesophagus, ofthe larynx, of the mouth and withcervical cancer.

Recent scientific research has shownthat the eyesight of heavy smokersand heavy drinkers is alsothreatened.Other risks include decreased fertility,miscarriage, low birth weight andmemory loss.

Non-smokers become second-handsmokers when they breathe in the smokereleased in the environment by smokerssince the smoker only inhaled 15% of acigarette's smoke.

A study published in 2004 in a prestigiousmedical journal demonstrated that theeffects of passive smoking are disastrous.Adults living in the same house withsmokers run a 15% greater risk of death,even if they themselves have neversmoked.

It is even worse for non-smokers at theworkplace, where there is usually morethan one active smoker, the non-smokerbeing thus exposed to the smoke of manypeople.

Studies have shown that if non-smokersstay in a place literally filled with smoke,their blood pressure and heart rate willrise. In fact people with coronary heartdisease may suffer an angina attack orcoronary artery spasm. Passive smokingdecreases physical performance evenamong healthy people who exerciseregularly.

However, we should not develop a racistattitude towards smokers. Smokers donot smoke in order to relax or to have fun,but because they are addicted.

“Smokers have to dare change theirway of life”

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The harmful effects of smoking

Passive smoking

It is estimated that

each cigarette takes off

5.5 minutes from a

smoker's lifespan.

18

TEST YOURSELF: How strong is your dependence on smoking?

If you wish to quit smoking, it is important for you to know how dependent you are. The reason is that the

more dependent on his cigarette a smoker is, the more likely it is that he will need additional support to stop.

To find out how dependent you are, fill out the questionnaire below (it is based on a scale created by the

Swedish scientist Karl Olav Faregstrom).

6-30 minutes 2 points

31-60 minutes 1 point

after 60 minutes 0 points

Yes point1

31-60 minutes point0 s

The first one of the day 1 point

Any other one 0 spoint

11-20 1 point

21-30 2 spoint

more than 31 3 points

Less than 10 0 point

Yes 1 point

No 0 spoint

Yes 1 point

No 0 spoint

Question 1.

Question 2.

Question 3.

Question 4.

Question 5.

Question 6.

Within how many minutes of waking do you light up

your first cigarette?

Within the first 5 minutes 3 points

Do you find it difficult not to smoke in places wheresmoking is not allowed (e.g. church, library, cinema)

Which cigarette is it harder for you not to smoke?

How many cigarettes do you smoke in a day?

Do you smoke more in the morning than in theafternoon?

Do you smoke even you are sick in bed?

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Centre for the Prevention of Heart Disease at “Ygeias Melathron”,6 Thereianou St., Athens, tel: 210 3349147, 210 3349138Hellenic Cancer Society, 18-20 A. Tsocha St., Athens, tel: 210 6440785Hellenic Institute of Cardiology, 133 Vas. Sophias St., Athens,tel: 210 6401477Hellenic Thoracic Society, 152 Mesogeion Av, Athens, tel: 210 7487723Institute of Social and Preventive Medicine, 63 Ypsilantou St, Athens,tel: 210 7222727

If you feel you need to be supported in your effort to quit smoking, youcan contact:

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Total points Result

High tobacco dependence

Medium tobacco dependence

7 - 10

4 - 6

0 - 3 Low tobacco dependence

N A T I O N A L B A N K

O F G R E E C E