ALPHA BANK LONDON LIMITED

ALPHA BANK LONDON LIMITED ANNUAL REPORT AND FINANCIAL STATEMENTS 31 December 2007 Registered number 185070

Table of Contents Page Officers and Company Particulars 3 Directors Report 4 Statement of Directors Responsibilities 6 Report of the Independent Auditors to the Members of Alpha Bank London Limited 7 Financial Statements Income Statement 8 Balance Sheet 9 Statement of Changes in Equity 10 Statement of Cash Flows 11 Notes to the Financial Statements Accounting Principles Applied 12 Income Statement 17 Balance Sheet 20 Off-Balance Sheet Information 25 Risk Management 26 Additional Information 35 Directory of Offices 37 2

Officers and Company Particulars Anthony D. Loehnis Demetrios P. Mantzounis Martin J. Waghorn Spyros N. Filaretos Christopher J. Sheridan Emmanuel P. Zuridis Theodossis D. Bountourakis Christos Giampanas (Chairman) (Deputy Chairman) (Managing Director) John Coxon Christopher J. Sheridan Spyros N. Filaretos Anthony D. Loehnis Emmanuel P. Zuridis (Chairman) Anthony D. Loehnis Spyros N. Filaretos Christopher J. Sheridan Emmanuel P. Zuridis (Chairman) Martin J. Waghorn Alex Gibb Linda Cullen John Coxon (Chairman) (General Manager & Head of Relationship Banking) (Assistant General Manager, Operations) (Senior Manager, Financial Control) 66 Cannon Street London EC4N 6EP Tel: 020 7332 6767 Fax: 020 7332 0013 185070 England 17 October 1922 3

Directors Report Alpha Bank London Limited The directors have pleasure in submitting their annual report and the audited financial statements of Alpha Bank London Limited (the Company ) for the year ended 31 December 2007. The Company is designated as an authorised institution for the purposes of the Banking Act 1987, and as a limited company under the provisions of the Companies Act 1985. It is regulated by the Financial Services Authority. The Company provides a range of domestic and international banking services, and it expects to continue to do so profitably. Profit on ordinary activities after taxation amounted to 4,202,000 (2006: 1,877,000). The directors do not recommend the payment of a dividend (2006: Nil), and propose to carry 4,202,000 (2006: 1,877,000) to reserves. Profit after taxation is 124% higher than in 2006 due to an increase in net interest income, as a result of growth and higher margins in the lending portfolio, and an increase in other income, as explained below. Fee and commission income shows a slight increase at 1,089,000 (2006: 1,072,000) despite the Company receiving some large fees during the year. This is because fee income is accounted for on an effective interest rate basis over the life of a transaction. This has resulted in an increase in deferred fee income, from 957,000 to 1,515,000. Operating income, which increased by 37% from 7,942,000 to 10,920,000, includes a receipt of 1,250,000 for compensation for loss of light in connection with the development of an office block opposite the Company s Cannon Street premises. Operating expenses decreased from 5,194,000 to 4,795,000, mainly as a result of the implementation of a new staff cost structure. The Company now employs all staff that work at its London offices and apportions their time and costs between the Company and other affiliate entities that operate from these offices. This new structure was implemented from the start of the year. The composition of the balance sheet changed during the year due to a decrease in deposits from banks. This resulted in an increase in borrowings from the parent, Alpha Bank A.E.. Surplus funds earlier in the year were used to increase the investment securities portfolio. Loans and advances to customers increased by 25% during the year, from 263,007,000 to 328,183,000. There was one impaired loan at the year end which amounted to 26,000 (2006: nil), which was fully provided for. The Company s offshore banking subsidiary, Alpha Bank Jersey Limited, traded profitably. Its subsidiary, Alpha Asset Finance C.I. Limited, which provides credit instalment finance to retail and business customers in the Channel Islands, traded satisfactorily and as at 31 December 2007 had receivables of 15,600,000. Due to a change in business strategy the Company sold Alpha Investment Services A.E.P.E.Y., which provides investment advisory services in Greece, back to Alpha Bank A.E. at cost on 29 th June 2007. The key performance indicators used by the Company are the cost to income ratio and the risk asset ratio. The Company s cost to income ratio was 44% compared with 65% for the previous year. The reduction is due to the increase in income and reduction of staff costs, which is explained above. The Company s risk asset ratio, which is used to measure the adequacy of capital to support the business, is 21% (2006: 22%). This comfortably exceeds the minimum set by the Financial Services Authority. The Company s risk management policies are set out in note 28 to the financial statements. Movements in tangible fixed assets are set out in note 18 to the financial statements. 4

Directors Report (continued) The following persons served as directors of the Company during the financial year. None of the directors had any interest in the share capital of the Company. Theodossis D. Bountourakis Spyros N. Filaretos Christos Giampanas (appointed 19 November 2007) Vassilios J. Karaindros (resigned 25 June 2007) Anthony D. Loehnis Demetrios P. Mantzounis Christopher J. Sheridan Martin J. Waghorn Emmanuel P. Zuridis The current composition of the Board of Directors is shown on page 3. On 25 June 2007 Mr V. J. Karaindros resigned as a director of the Company. On 19 November 2007 Mr C. Giampanas, Executive General Manager of Alpha Bank A.E., joined the Board. There were no changes in directors interests between 31 December 2007 and 18 February 2008. None of the directors had a material interest at any time during the year in any contract of significance in relation to the Company s business. The Audit Committee meets at least twice a year to consider the nature and scope of audit reviews and the effectiveness of the systems of internal control and compliance within the group. Its terms of reference also include the review of the annual financial statements and accounting policies of the Company and its subsidiaries. The external auditors meet with the Committee by invitation. The Remuneration Committee reviews the appropriateness of all aspects of the Company s pay and benefit policies, taking into account the remuneration packages of comparable financial organisations and having access to relevant remuneration surveys. The Committee is able to take external advice where it feels this is necessary. Charitable contributions made during the year amounted to 1,290 (2006: 830). No political donations were made. The directors who held office at the date of approval of this directors report confirm that, so far as they are each aware, there is no relevant audit information of which the Company s auditors are unaware; and each director has taken all the steps that he ought to have taken as a director to make himself aware of any relevant audit information and to establish that the Company s auditors are aware of that information. In accordance with Section 384 of the Companies Act 1985, a resolution for the re-appointment of KPMG Audit Plc as auditors of the Company is to be proposed at the forthcoming Annual General Meeting. By Order of the Board John Coxon Secretary 66 Cannon Street London EC4N 6EP 18 February 2008 5

Statement of Directors Responsibilities in Respect of the Directors Report and the Financial Statements The directors are responsible for preparing the Directors Report and the financial statements in accordance with applicable law and regulations. Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with IFRSs as adopted by the EU. The financial statements are required by law and IFRSs as adopted by the EU to present fairly the financial position of the Company and the performance for that period; the Companies Act 1985 provides in relation to such financial statements that references in the relevant part of the Act to financial statements giving a true and fair view are references to their achieving a fair presentation. In preparing the financial statements, the directors are required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business. The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 1985. They have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Company and to prevent and detect fraud and other irregularities. 6

KPMG Audit Plc 8 Salisbury Square London EC4Y 8BB United Kingdom Report of the Independent Auditors to the Members of Alpha Bank London Limited We have audited the financial statements of Alpha Bank London Limited for the year ended 31 December 2007 which comprise the Income Statement, the Balance Sheet, the Statement of Changes in Equity, the Statement of Cash Flows and the related notes. These financial statements have been prepared under the accounting policies set out therein. This report is made solely to the Company s members, as a body, in accordance with section 235 of the Companies Act 1985. Our audit work has been undertaken so that we might state to the Company s members those matters we are required to state to them in an auditor s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company s members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditors The directors responsibilities for preparing the financial statements in accordance with applicable law and International Financial Reporting Standards (IFRSs) as adopted by the EU are set out in the Statement of Directors Responsibilities on page 6. Our responsibility is to audit the financial statements in accordance with relevant legal and regulatory requirements and International Standards on Auditing (UK and Ireland). We report to you our opinion as to whether the financial statements give a true and fair view and whether the financial statements have been properly prepared in accordance with the Companies Act 1985. We also report to you if, in our opinion, the Directors Report is not consistent with the financial statements. In addition we report to you, if in our opinion, the Company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law regarding directors remuneration and transactions with the company is not disclosed. We read the Directors Report and consider the implications for our report if we become aware of any apparent misstatements within it. Basis of audit opinion We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the company s circumstances, consistently applied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. Opinion In our opinion the financial statements give a true and fair view, in accordance with IFRSs as adopted by the EU, of the state of the Company s affairs as at 31 December 2007 and of its profit for the year then ended; and have been properly prepared in accordance with the Companies Act 1985; and the information given in the Directors report is consistent with the financial statements. KPMG Audit Plc 18 February 2008 Chartered Accountants Registered Auditor 7

Income Statement For the year ended Alpha Bank London Limited Note Interest and similar income 2 29,662 20,318 Interest expense and similar charges 2 (21,429) (13,816) Net interest income 8,233 6,502 Fee and commission income 3 1,089 1,072 Fee and commission expense 3 - (2) 9,322 7,572 Gains less losses on financial transactions 4 282 272 Other income 5 1,316 98 Staff costs 6 (2,677) (3,460) General administrative expenses 8 (1,736) (1,375) Depreciation 18 (380) (359) Net impairment loss on loans and advances 9 (2) - Income tax expense 10 (1,923) (871) The notes on pages 12 to 36 form an integral part of these financial statements. 8

Balance Sheet As at 31 December 2007 Alpha Bank London Limited Note Cash and balances with central banks 11 120 102 Due from banks 12 67,483 172,299 Derivative financial assets 13 159 678 Loans and advances to customers 14 328,183 263,007 Investment securities -Available-for-sale 15 61,476 48,488 Investments in subsidiary undertakings 16 5,250 7,516 Investment in group undertaking 17 1 1 Property, plant and equipment 18 2,475 2,545 Deferred tax assets 19 36 57 Other assets 20 516 394 Due to banks 21 222,160 262,081 Derivative financial liabilities 13 357 373 Due to customers 22 162,390 156,441 Debt securities in issue and other borrowed funds 23 12,091 11,204 Liabilities for current income tax and other taxes 24 1,142 481 Other liabilities 25 899 531 Share capital 26 30,000 30,000 Retained earnings 38,097 33,895 Fair value reserve (1,437) 81 The notes on pages 12 to 36 form an integral part of these financial statements. These financial statements were approved by the Board of Directors on 18 February 2008 and were signed on its behalf by: Anthony D. Loehnis Chairman Martin J. Waghorn Managing Director 9

Statement of Changes in Equity For the year ended 31 December 2007 Alpha Bank London Limited Share capital 000 s Retained earnings 000 s Fair value reserve 000 s Total equity 000 s 30,000 33,895 81 63,976 Change in fair value of available-for-sale securities - - (1,518) (1,518) Profit for the year - 4,202-4,202 30,000 32,018 125 62,143 Change in fair value of available-for-sale securities - - (44) (44) Profit for the year - 1,877-1,877 The notes on pages 12 to 36 form an integral part of these financial statements. 10

Statement of Cash Flows For the year ended 31 December 2007 Profit before tax 6,125 2,748 Adjustments to reconcile net profit to cash flow from(used in) operating activities: Depreciation 18 380 359 6,505 3,107 Net (increase) decrease in assets relating to operating activities: Due from banks 12,969 (12,969) Derivative financial assets 519 (454) Loans and advances to customers (65,176) (32,088) Other assets (122) (24) Net increase (decrease) in liabilities relating to operating activities Due to banks (39,921) 106,715 Derivative financial liabilities (16) (5) Due to customers 5,949 7,057 Other liabilities 368 2 Net cash from operating activities before taxes (78,925) 71,341 Income tax paid (1,241) (989) (80,166) 70,352 Note (Acquisition) disposal of subsidiary 2,266 (2,266) (Acquisition) disposal of property, plant and equipment 18 (310) (313) Net (increase) decrease in investment securities (14,506) (11,587) (12,550) (14,166) (92,716) 56,186 11 159,432 103,352 887 (106) 11 67,603 159,432 The notes on pages 12 to 36 form an integral part of these financial statements. 11

Notes to the Financial Statements 1.1 Basis of presentation These financial statements of Alpha Bank London Limited (the Company ) have been prepared in accordance with International Financial Reporting Standards ( IFRSs ) and the special provisions of the Part VII of the Companies Act 1985, as amended by Statutory Instrument 2004/2947 The Companies Act 1985 (International Accounting Standards and Other Accounting Amendments) Regulation 2004. They are presented in Sterling, rounded to the nearest thousand unless otherwise indicated, and are prepared on the historical cost basis except for certain financial assets and liabilities. The Company has prepared these financial statements in accordance with IFRSs that have been adopted by the European Union with Regulation 1606/2002 of the European Parliament and the Council of the European Union on 19 July 2002. The accounting policies applied by the Company are the same as those applied for the year ended 31 December 2006 taking into consideration the new standards, amendments and interpretations issued by the International Accounting Standards Board (IASB) and adopted by the European Union, which are effective for accounting periods beginning on or after 1 January 2007. As a wholly owned subsidiary of Alpha Bank AE, the Company has taken advantage of the exemption in IAS 27 Consolidated and Separate Financial Statements and has not prepared consolidated financial statements. The principal accounting policies adopted are set out below. 1.2 Foreign currency transactions The financial statements are presented in Sterling, which is the currency of the country of incorporation of the Company (functional currency). Transactions in foreign currencies are translated to Sterling at the closing exchange rates at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the balance sheet date are translated to Sterling at the closing exchange rate at that date. Foreign exchange differences arising on translation are recognised in the Income Statement. Non-monetary assets and liabilities are recognised at the exchange rate ruling at initial recognition, except for those non-monetary items denominated in foreign currencies that are stated at fair value. The exchange differences relating to these items are part of the change in fair value and are recognised in the Income Statement or recorded directly in shareholders' equity depending on the classification of the non-monetary item. 1.3 Cash and cash equivalents For the purposes of the statement of cash flows, cash and cash equivalents consists of: a. Cash on hand. b. Non-restricted placements with central banks. c. Short-term balances due from banks. Short-term balances due from banks are amounts that mature within three months after the date of the financial statements. 12

1.4 Classification and measurement of financial assets The Company classifies its financial assets in the following categories: Loans and receivables. Held-to-maturity investments. Financial assets at fair value through profit or loss. Available-for-sale financial assets. For each of the above classifications the following is applicable: a) Loans and receivables Included in this category are: i. Direct loans to customers ii. Amounts paid for a portion or total acquisition of bonds issued by customers iii. All receivables from customers, banks etc. Loans and receivables are carried at amortised cost. The amortised cost of a financial asset is the amount at which the financial asset is measured at initial recognition, minus principal repayments, plus or minus the cumulative amortisation using the effective interest rate method of any difference between the initial amount recognised and the maturity amount, minus any reduction for impairment. The impact of hedging on the measurement of financial assets is detailed in the derivative financial instruments and hedge accounting policy note. b) Held-to-maturity Held-to-maturity investments are financial assets that the Company has the positive intention and ability to hold to maturity. This category is carried at amortised cost. The Company has not included any financial assets in this category. c) Financial assets at fair value through profit or loss The Company may decide, at initial recognition, to recognise changes in fair value in the Income Statement. d) Available-for-sale Available-for-sale financial assets are investments that have not been classified in any of the previous categories. This category is carried at fair value. Gains and losses arising from changes in the fair value of available-for-sale assets are recognised directly in equity. All such gains and losses will be recycled through the Income Statement on derecognition of the related asset. Foreign exchange gains or losses on available-for-sale debt security investments are recognised in the Income Statement. The Company has included in this category: i. Variable interest rate bonds ii. Fixed rate bonds The measurement principles noted above are not applicable when a particular financial asset is a hedged item, in which case the principles set out in note 1.5 are followed. 1.5 Derivative financial instruments and hedge accounting Derivatives are financial instruments that upon inception have a minimal or zero value and subsequently change in accordance with a particular underlying instrument (e.g. foreign exchange, interest rates, index or other variable). All derivatives are recognised as assets when their fair value is positive and as liabilities when their fair value is negative. 13

Derivatives are entered into for either hedging or trading purposes and are measured at fair value irrespective of their purpose. When the Company uses derivatives for hedging purposes it ensures that appropriate documentation exists on inception of the transaction, and that the effectiveness of the hedge is monitored on an ongoing basis and the above are repeated at each reporting date. Hedge accounting Hedge accounting relates to the valuation rules to offset the effects of the gain or loss from changes in the fair value of a hedging instrument and a hedged item that would not be achieved if the normal remeasurement principles were followed. Documentation of the hedge relationship upon inception and of the effectiveness of the hedge on an ongoing basis is the basic requirements for the adoption of hedge accounting. Fair value hedge A fair value hedge of a financial instrument offsets the change in the fair value of the hedged item in respect of the risks being hedged. Changes in the fair value of both the hedging instrument and the hedged item in respect of the risk being hedged are recognised in the Income Statement. The Company uses interest rate swaps to hedge interest rate risk relating to borrowings, bonds, loans and fixed rate term deposits. If hedging ceases then the fair value adjustment to the hedged item is amortised over the remaining life of the hedged item as part of its effective interest rate and the hedging instrument continues to be measured at fair value with the gain or loss going through the profit and loss account. 1.6 Property, plant and equipment This caption includes: land; buildings (owned and leased); additions and improvements of leased fixed assets; and equipment. Property, plant and equipment are stated at cost less accumulated depreciation. The historical cost includes costs relating to the acquisition of property and equipment. Subsequent expenditure is capitalised or recognised as a separate asset only when it increases the future economic benefits. Expenditure on repairs and maintenance is recognised in the Income Statement as an expense as incurred. Depreciation is charged on a straight-line basis over the estimated useful lives of property, plant and equipment taking into account residual values. The estimated useful lives are as follows: - Freehold and Leasehold Buildings: 10 to 50 years. - Additions to leased fixed assets and improvements: over the term of the lease. - Computers and other equipment: 3 to 10 years. Land is not depreciated; however, it is reviewed periodically for impairment. The residual value of property and equipment and their useful lives are periodically reviewed and adjusted if necessary at each reporting date. Property and equipment is reviewed for impairment, in accordance with the general principles and methodology set out in IAS 36 ( Impairment of Assets ) and the relevant implementation guidance, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Property and equipment, which is considered to be impaired, is carried at its recoverable amount. Gains and losses from the sale of property and equipment are recognised in the Income Statement. 14

1.7 Leases The Company enters into leases as a lessee. For operating leases, the Company as a lessee does not recognise the leased asset, but charges the lease payments on an accrual basis to general administrative expenses. 1.8 Impairment losses on financial assets and liabilities The Company assesses, as at each balance sheet date, whether there is evidence of impairment in accordance with the general principles and methodology set out in IAS 39 ( Financial Instruments: Recognition and Measurement ) and the relevant implementation guidance. 1.9 Taxation Income tax expense consists of current tax and deferred tax. It is recognised in the Income Statement, except to the extent that it relates to items recognised directly in equity, in which case it is recognised directly in equity. Current tax is the expected tax payable on the taxable income for the year, and any adjustments to the tax payable in respect of previous years. Deferred taxation is the tax that will be paid or for which relief will be obtained in the future resulting from the different period that certain items are recognised for financial reporting and tax purposes. Deferred tax is provided for temporary differences arising between the tax base of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets and liabilities are provided based on the expected manner of realisation or settlement using tax rates (and laws) enacted at the balance sheet date. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the asset can be utilised, taking into consideration the enacted tax rates at the balance sheet date. 1.10 Financial liabilities Financial liabilities may be classified as at fair value through profit or loss when: i. the financial liability is acquired or repurchased in the short term to take advantage of short-term market fluctuations; ii. they are derivatives which are not classified as hedging instruments. Financial liabilities are initially recognised and remeasured at fair value, with changes in fair value recognised in the Income Statement. The liabilities from derivatives which are used for hedging purposes are measured at fair value. Changes in fair value are accounted for as set out in note 1.5. All other liabilities are measured at amortised cost. Subordinated debt issued, deposits from credit institutions and deposits from customers are included in this category. 1.11 Employee benefits The Company contributes to one defined contribution plan, the expense being charged to the Income Statement as incurred. A defined contribution plan is where the Company pays fixed contributions into a separate entity. The Company has no legal or constructive obligation to pay further contributions if the fund does not have sufficient assets to pay employees the benefits relating to their employment with the Company in current or prior years. 15

1.12 Sale and repurchase agreements The Company enters into purchases of securities under agreements to resell at a certain date in the future at a fixed price. Securities purchased subject to commitments to resell them at future dates are not recognised. The amounts paid are recognised in loans and advances to either banks or customers. The difference between the purchase price and the resale price is recognised as interest on an accrual basis. Securities that are sold under agreements to repurchase continue to be recognised in the balance sheet and are measured in accordance with the accounting policy of the category that they have been classified and are presented as investments. The proceeds from the sale of the securities are reported as liabilities to either banks or customers. The difference between the sale price and the repurchase price is recognised as interest on an accrual basis. Securities borrowed under securities borrowing agreements are not recognised except when they have been sold to third parties whereby the gain on the sale is recognised in the Income Statement and the liability to deliver the security is recognised at fair value. 1.13 Interest income and expense Interest income and expense for all interest-bearing financial instruments except for those classified as heldfor-trading or designated at fair value (other than debt issued by the group and related derivatives) are recognised in Interest income and Interest expense in the income statement using the effective interest rates of the financial assets and financial liabilities to which they relate. The effective interest rate is the rate that exactly discounts estimated future cash receipts and payments earned or paid on a financial asset or liability through its expected life or, where appropriate, a shorter period, to the net carrying amount of the financial asset or financial liability. When calculating the effective interest rate, the group estimates cash flows considering all contractual terms of the financial instrument but not the future credit losses. The calculation includes all amounts paid or received by the group that are an integral part of the effective interest rate, including transaction costs and all other premiums or discounts. 1.14 Fee and commission income Fee and commission income is recognised on an accruals basis when the relevant service has been provided. Transaction revenues relating to the recognition of a financial instrument, which are measured at amortised cost, such as loans and advances, are capitalised and recognised in the Income Statement using the effective interest method. 1.15 Comparatives To the extent considered necessary the comparatives have been adjusted to facilitate changes in presentation of the current year amounts. 1.16 Use of estimates and judgements The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. 16

Income Statement Due from banks 8,162 5,745 Investment securities 2,440 1,451 Loans and advances to customers 19,060 13,122 Due to banks 12,562 7,807 Due to customers 8,304 5,584 Debt securities in issue and other borrowed funds 563 425 Loans 709 697 Letters of guarantee 2 4 Fund transfers 106 104 Mutual Funds 157 143 Other 115 124 Loans - 2 Foreign exchange differences 167 267 Available-for-sale securities - 9 Other financial instruments: Derivatives held for trading 130 168 Derivatives held for fair value hedge (218) 19 Fair value movement to hedged items 203 (7) Debt security at fair value through profit or loss - (184) 17

Management fees 85 80 Compensation for loss of light 1,250 - Compensation to customers (99) Rates refund - 18 Recovery from loans and advances 80 - Other - - The Company negotiated a one-off payment of 1,250,000 for loss of light from the developer of the office block opposite the Company s Cannon Street premises. This amount was received during the year. Wages and salaries 2,064 2,670 Social Security contributions 245 305 Expenses of defined contribution plan 218 292 Other 150 193 The number of persons employed by the Company at the year-end was 64 (2006-54). The remuneration of the directors is as follows: Directors emoluments 375 399 Company contributions to a defined contribution scheme 34 33 The above amounts for remuneration include the following in respect of the highest paid director: Directors emoluments 248 230 Company contributions to a defined contribution scheme 34 33 The number of directors who were members of the Company s pension scheme was as follows: Defined contribution scheme 1 1 18

The amount outstanding at 31 December 2007 required to be disclosed pursuant to S.255B of the Companies Act 1985 in respect of a loan to a director of the Company amounted to 2,740 (2006: 2,440). The aggregate amount of loans outstanding in respect of 10 officers was 18,456. (2006-6 officers: 13,335). This includes: Auditors remuneration: - Statutory audit 58 60 - Half year review 4 4 - Basel II presentation - 10 Customers loans and advances 26 - Recoveries (24) - UK corporation tax at 30% (2006: 30%) 1,965 883 Adjustments in respect of prior periods (63) (72) Deferred tax 21 60 Current tax on the above at 30% (2006: 30%) 1,837 824 Disallowable expenses 119 60 Depreciation for the period in excess of capital allowances 30 59 Adjustments in respect of prior years (63) (72) 19

Balance Sheet Cash 120 102 Sale and repurchase agreements - 32,343 Short-term placements with other banks 67,483 126,987 Placements with other banks 67,483 139,956 Sale and repurchase agreements - 32,343 Derivatives held for trading Interest rate swaps 2,755 98 9 Derivatives for hedging Interest rate swaps 7,176 61 348 20

Derivatives held for trading Interest rate swaps 58,927 539 269 Derivatives for hedging Interest rate swaps 8,095 139 104 The fair values of the interest rate swaps, which are not actively traded on any market, have been estimated by the directors based upon the discounted value of the future cash flows expected to be received and paid from these transactions. Overdrafts 18,110 17,164 Term loans 308,642 244,332 Other receivables 1,457 1,511 Allowance for impairment losses Government bonds 576 5,374 Other debt securities 60,900 43,114 The fair values of the debt securities have been determined by reference to prices available from the markets on which the instruments are traded. 21

The principal subsidiaries have only issued ordinary shares and are all wholly owned: Alpha Bank Jersey Limited Jersey Banking Alpha Bank London Nominees Limited United Kingdom Nominee services ABL Independent Financial Advisers Limited United Kingdom Dormant Flagbright Limited United Kingdom Dormant Commercial Bank of London Limited United Kingdom Dormant Alpha Asset Finance C.I. Limited * Jersey Credit instalment finance * 100% owned by Alpha Bank Jersey Limited On 29 th June 2007 the Company sold Alpha Investment Services A.E.P.E.Y., a company incorporated in Greece, to Alpha Bank A.E. The Company s participation amounted to 99% of the issued share capital and the proceeds of the sale amounted to EUR 3,371,435. There was no gain or loss on the sale of this investment. The amount reflects an interest in a group undertaking incorporated in Luxembourg. Additions - 3 307 310 Charge for the year 48 61 271 380 22

Property, plant and equipment 57 (21) - 36 Property, plant and equipment 117 (60) - 57 Prepayments 364 300 Other 152 94 Current accounts 788 610 Term deposits 221,372 261,471 Current accounts 9,574 10,923 Saving accounts 16,332 15,814 Notice accounts 13,079 - Fixed deposits 123,381 129,595 Items in the course of transmission 24 109 23

On 29 December 2005 the Company issued a subordinated note of EUR 16,500,000, which matures on 29 December 2015. It has a margin of 0.75% over 3 month Euribor and the Company as borrower has the right to redeem after 5 years and 1 day. Current income tax 1,142 481 Accrued expenses 797 528 Other 102 3 6,000,000 ordinary shares of 5 each 6,000,000 ordinary shares of 5 each 24

Off Balance Sheet Information There are no pending legal cases or issues in progress which may have a material impact on the financial statements of the Company. The Company s minimum future lease payments are as follows: Less than one year 93 93 Between one and five years 370 370 More than five years 46 139 Letters of guarantee 487 731 Undrawn loan commitments 47,039 45,695 25

Risk Management The Company s financial instruments, other than derivatives, principally comprise loans and deposits that arise from its operations as a lending and deposit-taking institution. It also has a portfolio of debt securities that are treated as long term investments. The Company also enters into a small number of derivative transactions (principally interest rate swaps, currency swaps and forward foreign currency contracts). The purpose of these transactions is to manage the interest rate and currency risks arising from the Company s operations. It is, and has been throughout the year under review, the Company s policy that no trading in financial instruments shall be undertaken. The main risks arising from the Company s financial instruments are credit risk, market price risk and liquidity risk. Market risk includes interest rate and foreign currency risk. The Company s objectives, policies and processes for measuring and managing these risks are described below. The objectives, policies and processes are the same as those in place last year. Credit risk is the risk that financial loss arises from the failure of a customer or counterparty to meet its obligations under a contract. It arises principally from lending, trade finance and treasury activities. Internal controls are in place within the Company s credit function which are designed to ensure that loans are made in accordance with credit policy and that once made such facilities are monitored on a regular basis by the appropriate level of management. Consideration is given to making specific provisions where necessary. Moreover, significant changes in the economy, or state of a particular industry could result in risks that are different from those provided for at the balance sheet date. To manage these risks management has established limits in relation to individual borrowers or groups of borrowers. The limits established are constantly monitored and are subject to a regular review by the responsible (based on the amount of the limit) approval body. Limits relating to specific sectors and countries are examined and approved by the Board of Directors. The exposure to credit risk is managed by an analysis of the ability of the borrowers to meet their obligations using internal credit rating systems and methodologies. In the instances of borrowers who have obtained facilities from other group companies, the total exposure on a group basis is taken into account in determining the credit risk. As a result the credit limits are adjusted if considered necessary. In addition the above analysis takes into account the interest rate spread and collaterals held. The Company s exposure to credit risk is determined by the counterparties with whom the Company conducts business, as well as the markets and countries in which those counterparties conduct their business. Counterparty and country limits are in place and the Company performs credit appraisal procedures prior to the advancing of any facilities. The Company also has policies on the levels of collateral that are required to secure facilities. The Company held impaired loans amounting to 26,119 at the year end (2006: Nil). All debt securities have a rating (Moody s) of no less than Baa1 (2006: A3). At the year end there were no other loans that were past due. The company holds collateral against loans and advances to customers in the form of property, guarantees and cash deposits. 26

The tables below show the Company s exposure to credit risk based on the markets and countries in which the Company s customers conduct their business. As at 31 December, these exposures were as follows: Sovereign - 492 492 Banks - 59,090 59,090 Individuals 64,694-64,694 Financial intermediaries 45,809 98 45,907 Real estate companies 157,429-157,429 Other 60,251 1,796 62,047 UK 185,107 17,607 202,714 Greece 74,183 7,130 81,313 North America 10 21,088 21,098 Other 68,883 15,651 84,534 Sovereign - 5,235 5,235 Banks - 36,919 36,919 Individuals 57,455-57,455 Financial intermediaries 23,789 98 23,887 Real estate companies 164,880-164,880 Other 16,883 6,236 23,119 UK 139,933 8,721 148,654 Greece 60,078 7,971 68,049 North America - 20,194 20,194 Other 62,996 11,602 74,598 27

Market price risk is the risk that changes in market prices, such as interest rate, bond prices, foreign exchange rates and credit spreads (not relating to changes in the obligor s / issuer s credit standing) will affect the Company s income or value of its holdings of financial instruments. The objective of market risk management is to maintain market risk exposures within acceptable parameters, whilst optimising the return on risk. The Company has a portfolio of debt securities held for investment purposes. It is the Company s policy to hold all such securities as available-for-sale. Management monitor market price movements of the financial instruments held, and these details are circulated for review to the Board of Directors. Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company principally borrows and lends at floating rates of interest. In any instance where it has borrowed or lent at a fixed rate, the resulting interest rate risk is eliminated through the use of interest rate swaps. At 31 December 2007, it had fixed rate loans and fixed rate deposits that were hedged through the use of fifteen interest rate swaps. These swaps had a notional principal of 9,981,000 (2006: 67,022,000). The table below summarises the repricing mismatches on the Company s non-trading book as at 31 December. Items are allocated to time bands by reference to the earlier of the next contractual interest rate repricing date and the maturity date. Market loans 4.41 66,991 - - - - 612 Derivative financial assets - - 4 155 - - Loans and advances 6.65 315,897-250 7,823 1,005 3,208 Reverse repos 4.83 - - - - - - Debt securities 4.85 61,010 103 - - - 363 Investment in subsidiary and - - - - - 5,251 group undertakings Other assets - - - - - - 3,027 443,898 103 254 7,978 1,005 12,461 Bank deposits 4.53 184,473 36,106 - - - 1,581 Derivative financial liabilities - - 1 351 5 - Customer deposits 4.76 138,026 13,768 389 - - 10,207 Debt securities and other borrowed funds 4.97 12,089 - - - - 2 Shareholders funds - - - - - - 66,660 Other liabilities - - - - - - 2,041 334,588 49,874 390 351 5 80,491 Interest rate sensitivity gap 109,310 (49,771) (136) 7,627 1,000 (68,030) 109,310 59,539 59,403 67,030 68,030 - - 28

Market loans 3.55 128,920-10,415 - - 621 Derivative financial assets 1 253 389 35 - - Loans and advances 5.63 234,379 13,439 8,939 3,126 1,113 2,011 Reverse repos 5.07 29,652 2,613 - - - 78 Debt securities 4.30 48,071 108 - - - 309 Investment in subsidiary and - - - - - 7,517 group undertakings Other assets - - - - - - 3,098 441,023 16,413 19,743 3,161 1,113 13,634 Bank deposits 3.88 260,313 - - - - 1,768 Derivative financial liabilities - 50 241 76 6 - Customer deposits 4.12 135,907 7,516 652 - - 12,366 Debt securities and other borrowed funds 3.25 11,087 - - - - 117 Shareholders funds - - - - - - 63,976 Other liabilities - - - - - - 1,012 407,307 7,566 893 76 6 79,239 Interest rate sensitivity gap 33,716 8,847 18,850 3,085 1,107 (65,605) 33,716 42,563 61,413 64,498 65,605 - - A negative interest rate sensitivity gap exists when more liabilities than assets re-price during a given period. Although a negative gap position tends to benefit net interest income in a declining interest rate environment, the actual effect will depend on a number of factors, including the extent to which repayments are made earlier or later than the contracted date and variations in interest rates within repricing periods and among currencies. A 1% rise in interest rates is estimated to increase net interest income by 1,361,000 in the next twelve months (2006: 1,320,000). 29

Foreign currency exposure arises through certain monetary assets and liabilities that are denominated in foreign currencies. Currency limits are in place to manage these exposures and are closely monitored. The table below shows the Company s currency exposures. Such exposures comprise the monetary assets and monetary liabilities of the Company. As at 31 December, these exposures were as follows: 000 s 000 s 000 s 000 s 000 s Cash and balances with central banks 73 8 39-120 Due from banks 5,429 56,143 4,754 1,157 67,483 Derivative financial assets 154 5 - - 159 Loans and advances to customers 235,665 2,899 85,227 4,392 328,183 Investment Securities -Available for sale 680 17,282 43,514-61,476 Investments in subsidiary undertakings 5,250 - - - 5,250 Investment in group undertaking 1 - - - 1 Property, plant and equipment 2,475 - - - 2,475 Deferred tax assets 36 - - - 36 Other assets 516 - - - 516 Due to banks 89,629 33,582 98,266 683 222,160 Derivative financial liabilities 353 4-357 Due to customers 86,624 50,637 24,499 630 162,390 Debt securities in issue and other borrowed funds - - 12,091-12,091 Liabilities for current income tax and other taxes 1,142 - - - 1,142 Other liabilities 899 - - - 899 30

000 s 000 s 000 s 000 s 000 s Cash and balances with central banks 68 16 18-102 Due from banks 3,543 36,830 130,660 1,266 172,299 Derivative financial assets 31 16 631-678 Loans and advances to customers 208,819 3,712 48,399 2,077 263,007 Investment Securities -Available for sale 709 15,462 32,317-48,488 Investments in subsidiary undertakings 5,251-2,265-7,516 Investment in group undertaking 1 - - - 1 Property, plant and equipment 2,545 - - - 2,545 Deferred tax assets 57 - - - 57 Other assets 394 - - - 394 Due to banks 41,703 33,829 185,704 845 262,081 Derivative financial liabilities 82 6 285-373 Due to customers 79,642 59,179 16,962 658 156,441 Debt securities in issue and other borrowed funds - - 11,204-11,204 Liabilities for current income tax and other taxes 481 - - - 481 Other liabilities 531 - - - 531 In the opinion of the directors a movement in the above foreign currency positions against Sterling would not have a significant impact on profit or equity of the Company and therefore no currency sensitivity analysis has been disclosed. 31

Liquidity risk is the risk that the Company will not have sufficient funds to meet the obligations or commitments associated with its financial instruments. The Company s exposure to liquidity risk is managed based on policies agreed with the Financial Services Authority. These include the holding of sufficient immediately available cash or marketable assets, ensuring asset and liability cash flows are appropriately matched and having the ability to arrange further borrowing if required. Liquidity risk relates to the Company s ability to maintain sufficient funds to cover its obligations. To that end, a liquidity gap analysis is performed. Cash flows arising from all assets and liabilities are estimated and classified into relevant time periods, depending on when they occur. The table below analyses assets and liabilities into relevant maturity groupings based on the remaining period at the balance sheet date to the contractual maturity date: Cash and balances with central banks 120 - - - - 120 Due from banks 67,476 7 - - - 67,483 Derivative financial assets - - - 4 155 159 Loans and advances to customers 22,122 18,826 10,977 27,691 248,567 328,183 Investment Securities 178 184 104 6,316 54,694 61,476 Investments in subsidiary and group undertakings - - - - 5,251 5,251 Property, plant and equipment - - - - 2,475 2,475 Deferred tax assets - - - - 36 36 Other assets - - - - 516 516 Due to banks 57,364 128,690 36,106 - - 222,160 Derivative financial liabilities - - - 1 356 357 Due to customers 89,432 58,801 13,768 389-162,390 Debt securities in issue and other borrowed funds - - - - 12,091 12,091 Liabilities for current tax and other taxes 1,142 - - - - 1,142 Other liabilities 899 - - - - 899 32

Cash and balances with central banks 102 - - - - 102 Due from banks 140,515 18,815 2,554 10,415-172,299 Derivative financial assets - 1 253 389 35 678 Loans and advances to customers 21,348 2,472 9,343 26,283 203,561 263,007 Investment Securities 10,758 2,561 - - 35,169 48,488 Investments in subsidiary and group undertakings - - - - 7,517 7,517 Property, plant and equipment - - - - 2,545 2,545 Deferred tax assets - - - - 57 57 Other assets - - - - 394 394 Due to banks 117,697 76,456 16,741 51,187-262,081 Derivative financial liabilities - - 50 241 82 373 Due to customers 101,385 46,889 7,516 651-156,441 Debt securities in issue and other borrowed funds - - - - 11,204 11,204 Liabilities for current tax and other taxes 481 - - - - 481 Other liabilities 531 - - - - 531 33

The FSA sets and monitors capital requirements for the Company. In implementing current capital requirements the FSA requires the Company to maintain a prescribed ratio of total capital to total riskweighted assets. The Company s regulatory capital is analysed into two tiers: Tier 1 capital which includes ordinary share capital and retained earnings and Tier 2 capital which includes qualifying subordinated liabilities. Regulatory capital stood at 74,909,000 (2006: 67,439,000) with the Company s risk asset ratio remaining strong at 21.2% (2006: 21.7%), well in excess of the minimum required by the Financial Services Authority. Tier 1 Share capital 30,000 30,000 Retained earnings 38,097 33,895 Net losses on equities held as available for sale (26) (26) Total Tier 1 Capital 68,071 63,869 Tier 2 Subordinated debt 12,089 11,087 Total Tier 2 Capital 12,089 11,087 Less: Investment in subsidiaries and associates (5,251) (7,517) Total regulatory capital /risk weighted assets 21.2% 21.7% Total tier 1 capital / risk weighted assets 19.3% 20.5% 34