Hellenic Bank to issue shares

Hellenic Bank is seeking shareholder approval at the forthcoming EGM to be held on 30 May 2007 authorising the Bank’s Board to issue up to 20 mln ordinary shares for the next 12 months with a maximum discount of 10% on the market value of the shares.

In another development, the Company will issue up to CYP 12 mln 2016 Debentures (HBDF) with maturity date 1 July 2016. The 2016 Debentures will carry a variable interest rate of 80 bps above LIBOR at the beginning of each quarter (31 March, 30 June, 30 September and 31 December) for the first five years, whilst for the remaining period (if not redeemed by the Bank) interest will be set at 150 bps above LIBOR.

The BoD’s decision to issue additional shares falls within the Bank’s strategic intention for the strengthening its operations via acquisitions, and strategic alliances thus aiming to provide flexibility to the Board in order to take advantage of the opportunities that may emerge.

As far as the capital increase is concerned, Egnatia Financial Services anticipate that the capital issue will positively impact HB’s overall financial strength and enhance its capital base, thus enabling HB to strengthen its expansion. Egnatia note that in mid July 2006 the Bank replaced the 2006/11 Debentures with these new 2006/16 Debentures aiming to reduce the cost of funding of the Bank (c. 50bps) and thus increase NIMs and profitability.