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Stress Test Results CEBS

23 July 2010.

Eurobank EFG was subject to the 2010 EU-wide stress testing exercise coordinated by the Committee of European Banking Supervisors (CEBS), in cooperation with the European Central Bank, and Bank of Greece.

Eurobank EFG acknowledges the outcomes of t

Eurobank EFG was subject to the 2010 EU-wide stress testing exercise coordinated by the Committee of European Banking Supervisors (CEBS), in cooperation with the European Central Bank, and Bank of Greece.

Eurobank EFG acknowledges the outcomes of the EU-wide stress tests. This stress test complements the risk management procedures and regular stress testing programmes set up in Eurobank EFG under the Pillar 2 framework of the Basel II and CRD1 requirements.

The exercise was conducted using the scenarios, methodology and key assumptions provided by CEBS (see the aggregate report published on the CEBS website2). As a result of the assumed shock under the adverse scenario, the estimated consolidated Tier 1 capital ratio would change to 10.2% in 2011 compared to 11.2% as of end of 2009. An additional sovereign risk scenario would have a further impact of 2 percentage points on the estimated Tier 1 capital ratio, bringing it to 8.17% at the end of 2011, compared with the regulatory minimum of 4%.

The results of the stress suggest a buffer of 1,159 mln EUR of the Tier 1 capital against the threshold of 6% of Tier 1 capital adequacy ratio for Eurobank EFG agreed exclusively for the purposes of this exercise. This threshold should by no means be interpreted as a regulatory minimum (the regulatory minimum for the Tier 1 capital ratio is set to 4%), nor as a capital target reflecting the risk profile of the institution determined as a result of the supervisory review process in Pillar 2 of the CRD.

Bank of Greece has held rigorous discussions of the results of the stress test with Eurobank EFG.

Given that the stress test was carried out under a number of key common simplifying assumptions (e.g. constant balance sheet) the information on benchmark scenarios is provided only for comparison purposes and should in no way be construed as a forecast.

In the interpretation of the outcome of the exercise, it is imperative to differentiate between the results obtained under the different scenarios developed for the purposes of the EU-wide exercise. The results of the adverse scenario should not be considered as representative of the current situation or possible present capital needs. A stress testing exercise does not provide forecasts of expected outcomes since the adverse scenarios are designed as "what-if" scenarios including plausible but extreme assumptions, which are therefore not very likely to materialise. Different stresses may produce different outcomes depending on the circumstances of each institution.

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