At its meeting held yesterday, the Board of Directors of the Bank of Cyprus approved the decision of the Board of Directors of the Bank?s subsidiary company, General Insurance of Cyprus Ltd, also dated 13 January 2005, for the acquisition of the insurance portfolio of the company Georgios Giabra Pierides Ltd for a consideration of £540.000. Georgios Giabra Pierides Ltd have been general agents of General Insurance of Cyprus since 2000 and before then, general agents of the companies Guardian Royal Exchange and AXA, which withdrew from the Cyprus market.

The Chairman of the Board of Directors of the Bank of Cyprus Mr Solon Triantafyllides and Mr Polys Polyviou, Member of the Board of Directors of the Bank and General Insurance of Cyprus Ltd, have a substantial interest in Georgios Giabra Pierides Ltd. In accordance with Articles 8 and 9 of the Cyprus Securities and Stock Exchange Laws 83(Ι)97 and 87(Ι)02 respectively, Messrs Triantafyllides and Polyviou together with connected persons own 99% of Georgios Giabra Pierides Ltd.

Given the above relationship, the Group proceeded to obtain two internal and two independent external valuations, which confirm the fair value of the consideration to be paid for the acquisition of the insurance portfolio.

In addition, the Group Audit Committee has extensively reviewed the procedure followed.

Messrs Triantafyllides and Polyviou did not participate in the process of determining the consideration to be paid for the acquisition, or in the decision making process.

All the above were carried out in accordance with corporate governance principles and the Cyprus Company Law.

Even though the above acquisition is not expected to significantly influence the profitability of the Bank of Cyprus Group, the Group expects that it will assist in the further development of the business and profitability of General Insurance of Cyprus Ltd.