THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014. ANNOUNCEMENT

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1 25 June 2018 THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF EU REGULATION 596/2014. ANNOUNCEMENT HELLENIC BANK S AGREEMENT TO ACQUIRE CERTAIN ASSETS AND LIABILITIES OF THE CYPRUS COOPERATIVE BANK ESTABLISHES HELLENIC BANK AS A LEADING RETAIL AND SME BANK IN CYPRUS Further to the announcement made by Hellenic Bank Public Company Limited (the Company ), on 18 June 2018, that its final offer for the acquisition of certain assets and liabilities of the Cyprus Cooperative Bank Ltd ( CCB ) ( Acquisition ) ( Final Offer ) was accepted by the shareholders of CCB at an extraordinary general meeting on 18 June 2018, the Company announces that today it has signed a business transfer agreement ( BTA ) with CCB in relation to the Acquisition and a subscription agreement with BRAVO Strategies III ( BSIII ) in connection with the associated capital raise. Acquisition Perimeter Through the Acquisition a total balance sheet of 10.3bn of assets (or 10.0bn after fair value and other adjustments), as well as certain business of CCB related to the Acquisition perimeter, will be acquired by the Company. The balance sheet comprises of a portfolio of primarily performing loans (net loans: 4.6bn), Cyprus Government Bonds ( 4.1bn), cash ( 1.6bn), customer deposits ( 9.7bn) and certain other current liabilities and assets. The terms of the Acquisition will include an asset protection scheme ( APS ), provided by CCB. CCB s obligations under the APS, the BTA and a transitional services agreement between the Company and the CCB will be guaranteed by the Republic of Cyprus pursuant to a guarantee agreement to be entered into prior to the completion of the Acquisition. The Company has agreed to pay CCB 74mn in cash as a consideration for the net asset value of the Acquisition perimeter, which is 247mn. The Acquisition is subject to a number of conditions precedent, including shareholder resolutions approving the capital raise (see below), the execution of the government guarantee referred to above, the Company and CCB entering into the asset protection agreements (on the basis of terms already agreed) and the receipt of certain regulatory approvals and consents.

2 Cyprus Government Bonds The Acquisition perimeter includes a portfolio of Cyprus Government Bonds ( CGBs ) of 4.1bn with a weighted average yield of 2.6%. Combining the acquired CGBs portfolio with its existing CGBs portfolio, the Company will hold a total CGB portfolio with a value of 4.6bn with a weighted average yield of 2.7%. The Company will have a significant exposure to CGBs and plans to maintain the domestic CGBs ( 4.0bn) till maturity. In terms of maturity, 1.6bn of CGBs (or 36% of the total outstanding) are due to mature by the end of 2019, and 1.4bn of CGBs (or 32% of the total outstanding) are due to mature by the end of It is noted that given the current credit ratings assigned to the Republic of Cyprus by international credit rating agencies, the CGBs held by the Company are not eligible as collateral for any Eurosystem credit operations. 1 The Company s capital position, following the execution of the capital plan, will be sufficient to satisfy the regulatory capital requirements for such exposure. Acquired Loan Portfolio The Acquired loan portfolio comprises of 4.1bn of performing exposures (net) and 0.5bn of nonperforming exposures (net). About 45% of the net acquired loans relates to mortgage loans, about 33% relates to consumer loans, about 15% relates to business loans, and the remaining 7% relates to government loans. The APS will protect parts of the acquired loan portfolio, such as 0.5bn of non-performing exposures (net) and up to 2.1bn of high risk performing loans (net), against future losses to the Company. Accordingly, the terms of the APS are based on two distinct asset-pools, Asset Protection Scheme 1 and Asset Protection Scheme 2 ( APS1, APS2 ). APS1 comprises non-performing exposures (net) of 0.5bn and performing exposures, classified as Stage 1 and Stage 2 as per IFRS 9 terms, of 1.0bn (net). APS2 comprises performing exposures of 1.1bn, classified as Stage 1 and Stage 2 as per IFRS 9. Any non-performing exposures arising in APS2 will flow to APS1. The Company will receive credit protection through a 90% vertical loss borne by CCB, whose obligations will be guaranteed by the Republic of Cyprus. The durations of APS1 and APS2 are 12 and 10 years, respectively, with the amount protected under the APS reducing by more than 50% within 5 years, if all commitments are met and if, additionally, the Company exercises its options to make further asset withdrawals from the APS. This would also lead to lower guarantee fees payable by the Company than in the case that the Company opts to retain these assets within APS and would facilitate a gradual wind- 1 All assets accepted by the Eurosystem as eligible collateral must meet the minimum requirement of a credit assessment of credit quality step 3 on the Eurosystem s harmonised rating scale as laid down in the ECB Credit Assessment Framework (ECAF). 2

3 down of the APS across its lifetime. The APS entails a guarantee fee payable to the government which could be up to 63mn over the life of the APS. Combined Entity and Outlook The Acquisition is expected to accelerate the Company s strategy of strengthening its banking franchise across Cyprus with an enlarged and diversified customer base. The Acquisition perimeter is complementary to the Company s existing business model, diversifying its loan portfolio from its current focus on corporates and SME clients to establish an enlarged retail presence. Subject to the completion of the Acquisition, the Company is expected to have a performing loan market share of c. 22% 2 and a customer deposit market share of c. 31%, 3 establishing the Company as a leading retail and SME bank in the Cypriot economy. The Company is expected to expand its services to the c. 400k customers of CCB (some of which are joint customers with the Company) which, combined with its existing customer base, will lead it to serve most Cypriot households. The Company s strong liquidity position enabled it to provide a comprehensive offer to CCB s tender process for the sale of certain assets and liabilities, through an offer to absorb the entirety of customer deposits and provide liquidity to CCB depositors. Should the transaction proceed, the Company will continue to maintain a prudent liquidity position post-completion, with an expected ratio of net loans to deposits of less than 50%, allowing it to further support the financing needs of its customers. The Acquisition is expected to achieve a reduction to the non-performing exposure ( NPE ) ratio of the Company from 52% 4 to c. 25% 5, while the Texas ratio 6 is expected to improve from 115% 7 to c. 100% 8. As a result, the Company s financial profile is expected to improve considerably, allowing it to focus on its core strategic initiatives. The Company expects to achieve significant synergies from the Acquisition reflecting the complementary characteristics of the combined businesses. The main revenue synergies are expected to arise from (a) potential convergence of the funding costs of the combined deposit base, and (b) potential from cross-selling 2 Latest available figures (i.e.: December 2017 for the Company and for the banking system as per Central Bank of Cyprus) 3 Based on Central Bank of Cyprus statistics for April As of 31 March Excluding NPEs under an asset protection scheme 6 Defined as NPEs / (Shareholders equity + Accumulated Impairment Losses) 7 As of 31 March Excluding NPES under an asset protection scheme and post equity capital increase 3

4 products and services to an enlarged customer base. Operational cost synergies are expected from (a) the rationalisation of the combined branch network, (b) from the planned employee exit scheme to be implemented by CCB s management prior to the completion of the Acquisition, with the Company onboarding up to 1,100 employees from CCB, and (c) economies of scale across head office and support functions. The Company s medium term 9 targets 10 following the Acquisition, include, inter alia: Asset Quality: Reduction of NPE ratio 11 to below 20%, whilst maintaining a NPE provision coverage ratio of around 55%. Cost of risk to be below 1.0% Funding: Net loans to deposits ratio in excess of 55% Profitability: Net interest margin (as % of average total assets) in excess of 2.3% with a cost to income ratio below 55%. Return on equity of low double digits Capital Common Equity Tier 1 ratio of c. 14.0%. Capital adequacy ratio of c. 17.0% Employees Employees to be around 2,500 Capital Raise The Company intends to proceed with an equity capital raise of 150mn at a subscription price of 0.70 per share in cash ( Capital Raise ) of which 100mn will be via a pre-emptive rights issue and 50mn will be via a private placement to BSIII. The Capital Raise is conditional on the Company s shareholders passing a resolution in a duly convened extraordinary general meeting ( EGM ) approving the issue of shares comprising the Capital Raise by the Company. The private placement is also conditional upon shareholders approving a resolution dis-applying 9 Medium Term Targets refer to a period of 3 to 5 years 10 These are targets only and not profit forecasts. There can be no assurance that these targets will be met and it should not be taken as an indication of the Company's expected or actual future results. Recipients of this announcement should decide for themselves whether or not the targets are reasonable or achievable. 11 Excludes the impact of any potential future NPE transactions or any similar related transactions and excluding any NPEs under an asset protection scheme 4

5 their pre-emption rights in respect of such shares. The Capital Raise will allow the Company to maintain a CET1 ratio and a total capital ratio, post Capital Raise, above the medium-term target. As part of the Capital Raise, the Company has agreed with Demetra Investment Public Ltd ( Demetra ) that it will subscribe for up to 50mn in the pre-emptive rights issue 12. Pursuant to this agreement, Demetra has committed to subscribe for its pro rata share of the pre-emptive rights issue. To the extent that shares are not subscribed for by other holders in the pre-emptive rights issue, the Company has agreed to allocate to Demetra such number of additional shares as are necessary for Demetra to have a 20.1% shareholding at completion of the Capital Raise (provided that the number of unsubscribed shares will be available in all other cases Demetra s shareholding will be lower than 20.1%). The Board of Directors may, at its full discretion, allocate to Demetra any further shares not subscribed for in the pre-emptive rights issue up to, including other shares subscribed for by it in the Capital Raise, the total amount of 50m (provided that the number of unsubscribed shares will be available then Demetra s shareholding will range between 20.1% and 22.1%). The subscription by Demetra is conditional upon the completion of the Acquisition, the passing of the shareholder resolution approving the issue of shares comprising the Capital Raise, and the receipt of certain regulatory approvals. In addition, the Company has agreed with BSIII that BSIII will subscribe by way of private placement for 71,428,572 shares (representing 17.3% of the share capital following completion of the Capital Raise) for a total consideration of 50mn. The subscription by BSIII is dependent upon shareholders approving at the EGM a resolution dis-applying their pre-emption rights in respect of the shares to be placed with BSIII. The subscription is also conditional upon certain conditions precedent, including the execution of the acquisition agreements, the receipt of certain regulatory approvals and the gross proceeds of the Capital Raise not being less than 150mn. BSIII s agreement to subscribe for shares may be terminated: at any time prior to the EGM should (a) the Company or any member of its group be in violation of sanctions or (b) over a period of two consecutive weeks, the Republic of Cyprus 4.25% bonds due 2025 trade at a yield to maturity which is 750 basis points above the yield to maturity at which the Federal Republic of Germany s 0.5% bonds due 2025 trade; and at any time prior to completion of BSIII s subscription, should (a) there occur any material adverse change in or affecting the financial condition or the earnings, funding, net asset value, 12 This is different from the 72.28mn subscription previously announced and has been adjusted for the private placement 5

6 solvency position, or credit rating of the group, whether or not arising in the ordinary course of business or (b) it (or any member of its group) cease to be authorized to conduct banking or insurance business. Irrevocable Undertakings The Company has received irrevocable undertakings from each of Demetra, Third Point Hellenic Recovery Fund L.P. and Wargaming Group Limited to approve the capital increase and the dis-application of preemption rights in respect of, in aggregate, 121,159,185 shares, representing approximately 61.0% of the issued share capital of the Company as at the date of this announcement. The irrevocable undertakings will cease to have effect, among other things, if the EGM does not occur prior to 31 December 2018 or if BSIII s agreement is terminated prior to the EGM. Expected Timetable Subject to shareholder approval at an EGM, expected to take place by the end of July 2018, and subject to all relevant regulatory approvals being obtained, the Acquisition is expected to complete, at the earliest, during September 2018 and the Capital Raise is expected to take place during the fourth quarter of The Company has been advised by Alantra Corporate Finance S.A, Allen & Overy LLP, Antis Triantafyllides & Sons LLC, PricewaterhouseCoopers Ltd and The Boston Consulting Group Hellas S.A. ( Advisors ) and will, to the extent required by applicable laws and regulations, keep the investors informed of any developments on this matter. Further detail regarding the Acquisition can be found in a presentation of the Company that can be accessed through its website, under Investor Relations. HELLENIC BANK PUBLIC COMPANY LIMITED 6

7 Forward Looking Statements The information in this announcement includes forward-looking statements which are based on current expectations and projections about future events. These forward-looking statements, as well as those included in any other material referred to within this announcement, are subject to risks, uncertainties and assumptions about the Company and its subsidiaries and investments, including, among other things, securing necessary governmental and other approvals, changing business or other market conditions and the prospects for growth anticipated by the management of the Company. In light of these risks, uncertainties and assumptions, the events or circumstances referred to in the forward-looking statements may not occur. None of the future projections, synergies, expectations, estimates or prospects in this announcement should be taken as forecasts or promises nor should they be taken as implying any indication, assurance or guarantee that the assumptions on which such future projections, synergies, expectations, estimates or prospects have been prepared are correct or exhaustive or, in the case of the assumptions, fully stated in this announcement. No one undertakes to publicly update or revise any such forward-looking statement, whether as a result of new information, future events or otherwise. As a result of these risks, uncertainties and assumptions, you should not place undue reliance on these forward-looking statements as a prediction of actual results or otherwise. No statement in this announcement is or is intended to be a profit forecast or profit estimate or to imply that the earnings of the Company for the current or future financial years will match or exceed the historical or published earnings of the Company. The price of shares in the Company and the income from them may go down as well as up and investors may not get back the full amount invested on disposal of the shares. This announcement does not constitute or form part of, and should not be construed as, any offer to sell or issue, or invitation to purchase or subscribe for, or any solicitation of any offer to purchase or subscribe for, any securities of the Company, nor shall the fact of its release form the basis of, or be relied on in connection with, any contract or investment decision. No reliance may be placed for any purpose whatsoever on the information contained in this announcement, or on its completeness, accuracy or fairness and the information contained in this announcement has not been independently verified. This announcement has not been prepared in connection with any prospective subscribing for or purchasing of securities of the Company and should not be considered as a recommendation by the Company or any of their respective advisers and/or agents that any person should subscribe for or purchase them. If there is any subsequent equity capital raise, investors should only subscribe for or purchase any securities purely on the basis of a prospectus published at that time. This announcement has been issued by, and is the sole responsibility of, the Company. No representation or warranty, express or implied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Advisors or by any affiliates of their respective affiliates or agents as to, or in to relation to, the accuracy or completeness of this announcement or any other written or oral information made available to or publicly available to any interested party or its advisers, and any liability therefore is expressly disclaimed. This announcement is not an offer for sale of securities in the United States. Securities may not be offered or sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended (the Securities Act ) or the securities laws or with any securities regulatory authority of any other state or other jurisdiction of the United States, and may not be offered, sold or transferred, directly or indirectly, in the United States absent registration under the Securities Act or an 7

8 available exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and in compliance with any applicable securities laws of any other state or jurisdiction of the United States. If there is any subsequent equity capital raise, the Company expects it would be pursuant to an exemption from registration under the Securities Act and/or in a transaction not involving any public offering and outside the United States in offshore transactions within the meaning of, and in reliance on, Regulation S under the Securities Act. The Company does not intend to register any portion of the subsequent equity capital raise, if applicable, in the United States or to conduct a public offering of securities in the United States. The Advisors are acting exclusively for the Company and no one else in connection with the matters described in this announcement and are not, and will not be, responsible to anyone other than the Company for providing the protections afforded to their clients, or for providing advice in connection with the matters described in this announcement. Neither the Advisors nor any of their affiliates owe or accept any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of theirs in connection with this announcement or the matters described in this announcement. No representation or warranty, express or implied, is made or given by or on behalf of the Company, its affiliates, their respective directors, officers, employees or agents as to the accuracy, completeness or fairness of the information or opinions contained in this announcement or any other material discussed verbally. Neither the Company nor any of their respective affiliates, members, directors, officers or employees nor any other person accepts any liability whatsoever for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith. The information and opinions contained in this announcement are provided as at the date of this announcement and are subject to verification, completion and change without notice. In giving this announcement, neither the Company nor its Advisors and/or agents or any person acting on behalf of any of them undertakes any obligation to update this announcement or to correct any inaccuracies in any such information which may become apparent. The information in this announcement may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding, distribution, reproduction or disclosure of this information in whole or part is unauthorised. 8