Eurobank EFG Group continued expanding its activities in the Greek market and the countries of New Europe (Southeastern and Central Europe) at a fast pace in the first six months of 2006. Apart from the development of operations in the Greek market and the markets of Romania, Bulgaria and Serbia, the Group expands into three new countries, Poland, Turkey and recently in Ukraine.
Consequently, Eurobank establishes presence in a region of more than 200 million people, with collective nominal GDP approaching Euro1tr., employing a network of more than 1,000 branches and points of sale at the end of 2006. Consolidated net profit jumped 41.6% y-o-y to Euro318.1m. in the first half of 2006, driving Return on average Assets and Return on average Equity to 1.39% and 23.7% respectively. Given the robust financial performance in the first six months, the FY 2006 net profit of Euro615m. seems to be feasible. Total Assets grew by 22.6% y-o-y and reached Euro47.8bn at the end of June 2006, due to the continuous development of Eurobank operations in the fields of Retail & Wholesale Lending, Asset Management and Capital Markets in Greece and in New Europe.

- Loans and Funds under Management
Despite intensified competition, the loan portfolio of the Bank expanded very rapidly in the first half of the current year. Specifically, Group Loans reached Euro30.4bn, recording an increase of 24.5% compared to the respective period of 2005, with Household Lending (consumer and mortgage loans) growing strongly by 27.8% to Euro14.6bn and Business Lending rising substantially by 21.7% to Euro15.9bn. The expansion of the loan book in New Europe was impressive, as balances rose by 85% y-o-y to Euro2.3bn. It is worth noting that net loan additions amounted to Euro428m. in the second quarter of 2006, or double those in the first quarter of the current year.
Asset quality remained solid, as the total NPL ratio remained at 3%, with accumulated provisions covering 90.1% of non-performing loans, a ratio which is among the highest in the Greek banking sector. As a result of the prudent risk management policies, provisions to avg. net loans receded to 1.22% in the first half of 2006, from 1.36% a year ago.
Asset Management, results were also very strong, as Customer Funds under Management expanded by 22.9% y-o-y and stood at Euro39.5bn. In particular, Total Deposits recorded notable growth of 21.6% y-o-y to Euro21.4bn, whereas mutual funds increased by 15.4% to Euro6.8bn. Private Banking and Life Insurance businesses performed also very well, as customer funds under management expanded by 14.3% y-o-y to Euro6.8bn. and by 75.3% to Euro838m. respectively.

- Sources of Revenues
The leading position of Eurobank in the most profitable market segments and the continuous expansion of its activities in Retail and Wholesale Banking, Asset Management, Private Banking, Insurance and in the wider area of Capital markets (Brokerage services, Investment Banking and Treasury operations) led to a robust increase of Total Revenues by 23% to Euro1.1bn at the end of June 2006. Revenues stemming from New Europe operations accounted for 12.8% of total income, versus 10.5% a year ago.
The robust expansion of the loan portfolio drove Net Interest Income up 20.4% y-o-y to Euro758m. In the second quarter of 2006, net interest income amounted to Euro387m., against Euro371m. in the first quarter of the current year, a q-o-q growth of 4.3%. At the same time, the net interest margin (net interest income over avg. total assets) remained at 3.3%, which is one of the highest ratios in the domestic market.
Spearheaded by strong Capital Markets and Asset Management related fees, Total Fees and Commissions grew by 19.4% to Euro250m. Specifically, Net fees from Banking Activities expanded by 23.1% to Euro220.1m. In particular, fees related to capital markets grew strongly by 133% from Euro26.6m. to Euro62m. in the first half of 2006 and feesfrom mutual funds and assets under management advanced by 18% from Euro65.7m. to Euro77.5m. In addition, net fees from insurance activities reached Euro19.4m., growing by 21.3% on a yearly basis. Overall, the sum of net interest income and total commission income, that is Core Revenues, grew by 20.1% y-o-y to Euro1bn at the end of June 2006, accounting for more than 92% of Eurobank's Total Operating Income. Non-core revenues moved upwards as well and amounted to Euro83.9m., versus Euro48.7m. a year ago. Specifically, trading gains from bonds, equities and FX rose to Euro56.7m., from Euro40.8m. the first six months of 2005.

- Growth and Efficiency
Eurobank EFG Group has also made remarkable progress in enhancing the efficiency of its operations. The Cost-to-Income ratio for the Greek operations fell below 40% to 39.8%, from 43.8% in the first half of 2005. Including operations in New Europe, the efficiency ratio improved to 46.1% at the end of June 2006, from 47.4% a year ago. This achievement is of great importance, as the Bank is in an expansion mode and incurs additional costs from the opening of new branches in the domestic market and the region. Total Expenses in Greece were up 8.8% y-o-y to Euro378.9m., whereas Total Costs including New Europe operations stood at Euro477.6m., rising 13.8% y-o-y on a comparable basis in the first six months of 2006.

- Returns and Capital Structure
The Return on average Assets (after tax) reached 1.39% at the end of June 2006, from 1.26% in the first half of 2005, while the Return on average Equity (after tax and minorities) improved significantly to 23.7%, from 21.1% the respective period of 2005.Furthermore, Eurobank remained strongly capitalized, with the Total BIS Ratio standing at 12.6% and the Tier I Ratio reaching 10.3% at the end of June 2006. Regulatory Capital amounted to Euro3.7bn.

- Developments in New Europe
Eurobank operations in New Europe continued to expand successfully in the first six months of 2006. In Romania, together with the deployment of its new branch model and the development of new branches, 20 business centres were rolled out to cater to corporate clients. The network expansion was further accelerated to bring the total number of branches to 210 by year end. At the same time significant growth in corporate, consumer and mortgage loans was achieved in the first half of the year. Leasing products continued to grow at a fast pace with the launch of new products for corporate clients, whereas in the capital markets EFG Eurobank Securities already ranks among the top 10 brokerage houses.
In Bulgaria, the network expansion and optimisation continued, with the number of branches expected to reach 150 by the end of this year. Special emphasis was placed on the promotion of Amex, Visa and Euroline credit cards. Postbank continues to grow, enhancing its market position in all areas, in an environment characterised by the restrictive measures of the Central Bank. In Serbia, where Eurobank owns two banks EFG Eurobank A.D. Beograd and Nacionalna Stedionica Banka (NSB), the latter started the distribution of the retail and deposit products of the former with good results. The recorded growth stands above the market in both retail lending and deposits and leads to significant market share gains. Preparations are underway for a full merger between EFG Eurobank A.D. Beograd and NSB before the end of the year in order to create one strong bank for the Serbian market with extensive nationwide branch coverage -100 branches- combining the strengths of the two banks. In Poland, Polbank EFG has a fully operational network of 28 branches at the end of June 2006. Polbank EFG continues to bring innovative products to the market gaining clients preference and trust.
In Turkey, EFG Istanbul Securities continues to gain market shares and to contribute to Eurobank commission income and profitability. The completion of the acquisition of Tekfenbank should further help our operations in the neighbouring country.
Furthermore, Eurobank's agreement to acquire 99% of Universal Bank in Ukraine is a decision of strategic importance. Universal Bank activities are focused on Western Ukraine. The bank operates a network of 32 branches and has ca. 480 employees. Universal Bank employs a variety of distribution channels and offers a wide range of retail and commercial banking products, insurance and investment products, factoring, term financing and custodian services to institutional investors.
Ukraine is expected to experience high rates of economic growth in the medium-term and therefore the acquisition of Universal Bank allows Eurobank to enter an attractive market. The acquisition of Universal Bank in Ukraine follows the roll out of a branch network in Poland and the acquisition of Tekfenbank in Turkey and is consistent with the announced strategy of Eurobank EFG group to expand its activities in the most important markets of Southern and Eastern Europe.

It is stressed that the Summary Financial Data and Information for the period ended 30 June 2006, will be published in the press on Friday, August 4th, 2006.