Greek Bulgarian Partnership in the Balkan Region Presented by: Christos Anagnostakis Management Cons

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Greek Bulgarian Partnership in the Balkan
RegionPresented by Christos
AnagnostakisManagement Consultant For
International Corporate ClientsUNITED BULGARIAN
BANK A Member of the NBG Group 30 May, 2007
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FYR
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Greek EU Membership

• Greece realigned its economy as part of EU
  membership that began in 1981.
• Historically, Greece has been a net beneficiary
  of the EU budget. Net payments to Greece totaled
  4.9 billion in 1998, representing 4.2 of GDP.
  Net inflows were estimated at about 5 billion in
  1998.
• Greece received substantial support from the EU
  through the Delors II package. In July 1994, the
  Greek government and the EU agreed on a final
  plan which provided Greece 16.6 billion ECU for
  the period, of which 14 billion ECU was from the
  Community Support Framework and 2.6 billion ECU
  was from the Cohesion Fund.
• That level of assistance continued in 1999
  financing major public works and economic
  development projects, competitiveness and human
  resources programs, the improvement of living
  conditions and also addressed disparities between
  poorer and more developed regions of the country.
  
• Greece is set to receive EUR 20.1 billion of
  funds from the EU's budget, or approximately 1,8
  of GDP.

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The Greek Economy Key Figures

• During the 2006, Greece experienced a strong 4.2
  growth rate, versus 3.7 for previous year. This
  is among the highest rates in the EU and the
  Eurozone, where the average growth rates for
  these periods were estimated to stand as 2.7 and
  1.7 respectively.
• Current challenges include the further reduction
  of unemployment which currently stands at 8.8,
  the reform of the social security system, the
  further privatization of the public sector, the
  overhauling of the tax system and the further
  reduction of certain bureaucratic inefficiencies.
  
• Reduction of the fiscal deficit to the Eurozone
  target of 3 of GDP had also become a key issue.
  Under a negotiated agreement, the EU had given
  Greece a two year deadline (budgets of 2005 and
  2006) in order to bring the deficit in line with
  the criteria of the European stability pact,
  namely below 3.
• In 2005, the deficit stood at 5.5 of GDP, while
  in 2006 the deficit fell below 3, standing at
  2.6 (figure approved by Eurostat in April 2007).

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Greece Key Economic Data
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Greek Investments in Bulgaria

• In 1996-2006, Greek FDI presented 9.3 of the
  total investments, ranking the country third
  after Austria with 16.7 and Netherlands (10.0).

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Greek FDI in Bulgaria (EUR million)
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Greek FDI in Bulgaria (EUR million)
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Major Greek investors in Bulgaria
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Investments in Financial Sector

• Expecting higher profits and increase of their
  market share in the region, Greek banks have been
  quite active in their expansion towards countries
  like Bulgaria, Romania, Serbia, FYROM and Albania
  during the past few years.
• Five Greek banks - National Bank of Greece
  (through United Bulgarian Bank), EFG-Eurobank
  (through Bulgarian Post Bank), Alpha Bank,
  Piraeus Bank (through Piraeus Eurobank) and
  Emporiki Bank control a total of appr. 24 of the
  banking business in Bulgaria as of the end of
  2006.
• Greek banks have turned to retail banking, which
  has seen especially rapid development during the
  past couple of years. In many markets, they are
  pioneers in offering new products and services.

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Greek Banks on the Bulgarian Market as of 2006
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Non-banking Financial Institutions within NBG
Group

• Leasing
• Interlease (NBG Group)
• Venture Capital
• NBG Venture Capital
• Asset Management
• UBB Asset Management

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Portfolio investments

• There is significant Greek interest for portfolio
  of Bulgarian shares and bonds. Hedge funds and
  mutual funds, focusing on Bulgaria, are in the
  process of being created.
• Road shows on Bulgarian IPOs were recently
  organized in Athens with CCB.
• Greek investors participated with considerable
  amounts in new issues of companies such as
  MONBAT, CHIMIMPORT, SVILOZA, CCB, etc.

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Bulgarian Greek Trade

• Since 2000 the Bulgarian exports to Greece marked
  a stable upward trend.
• In 2006 Greece ranked fifth in Bulgaria in terms
  of trade partnership. Bulgarian exports to Greece
  make up almost 9 of the total exports, while
  imports account for 5 of the total Bulgarian
  imports.
• In 2006 Bulgarias exports to Greece amounted to
  EUR 1060,9mn, increasing by 19 y/y, and imports
  stood at EUR 907,5 up by 23 compared to the same
  period last year.

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Mutual Bulgarian Greek Trade (EUR million)
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Merchandise structure of Bulgarian Greek Trade

• Textile industry holds the leading position with
  a 43 share of the total exports and a 42 share
  of the total imports.
• Bulgaria exports to Greece base metals (17),
  mineral products (10), wood products (6),
  animals (4) and others.
• Bulgaria imports from Greece base metals (16),
  machines and equipment (9), plastics (8),
  mineral products (6).

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Merchandise structure of Bulgarian Greek Trade

• Bulgarian Exports to Greece

• Bulgarian Imports from Greece

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Bulgaria-Greece Five Year Programme for
Cooperation and Development

• Last year the Bulgarian National Assembly
  ratified an amendment to an inter-governmental
  agreement between Bulgaria and Greece on a
  five-year programme for cooperation and
  development in 2002-2006, extending its term by
  another five years (2007-2011).
• The agreement signed on August 28, 2002,
  envisages EUR 54,290,000 in total financial
  assistance for Bulgaria.
• EUR 10,858,000 are allocated for private sector
  investment
• EUR 542,900 are provided to the Greek Embassy in
  Sofia for a fund financing small projects
• EUR 42,889,100 will finance public sector
  projects.

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Bulgaria- Greece Mutual Projects
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Bourgas-Alexandroupolis Pipeline

• The Greek parliament ratified the agreement on
  the Burgas-Alexandroupolis oil pipeline project.
• The final trilateral deal on the EUR 783mn
  project for building a 280-kilometre pipeline for
  transit of crude oil from the Bulgarian Black Sea
  port of Burgas to the Greek Aegean Sea port of
  Alexandroupolis was signed in Athens last month.
• Construction works are expected to start in the
  first quarter of 2008. Russian firms will control
  51 of the pipeline while Bulgarian and Greek
  firms will hold stakes of 24.5 each.
• The setup of the joint entity International
  Project Company, which will run the oil pipeline
  project, is expected in June.
• The Bulgarian parliament is ratified the
  agreement on the first reading and the deal is
  expected to have an official approval after the
  second reading.

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Arda Water Management

• Bulgarian-Greek international project of Arda
  River water management is expected to ensure
  technical assistance for water quality management
  until July 2007. It is implemented jointly with
  the Kurdjali municipality and is administered by
  the Ministry of Regional Development and Public
  Works.
• The project aims to promote integrated management
  and pollution prevention in the Arda River basin
  by establishing business partnership between the
  stakeholders in Bulgaria and Greece, as well as
  by providing technical assistance in assessing
  the current state of the river and
  recommendations to improve the monitoring systems
  based on the EU Framework Directive on Waters.

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Projects For Culture and Tourist Exchange

• Regional Development Ministry of Bulgaria
  collected offers for projects for culture and
  tourist exchange in the border region between
  Bulgaria and Greece.
•  The EU PHARE program envisages for minimal sums
  may amount to EUR 50,000 (US 63,725) and the
  maximum may reach EUR 300,000 (US 382,285).
• Municipalities, local organizations,
  non-governmental organizations and museums form
  the regions applied for projects.
•  Having at least one partner form Greece is
  mandatory.
•  Plans for preservation and restoration of
  cultural and historical objects have priority in
  financing.

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Bulgaria-Greece Cross-border Infrastructure

• Bulgaria signed agreements to receive EUR 42
  million (55.5 million) in aid from the European
  Union (EU) pre-accession fund PHARE for
  cross-border co-operation projects ranging from
  road construction to environment protection.
• Bulgaria will get EUR20 million for cross-border
  cooperation with Greece, EUR 8.0 million are for
  cross-border cooperation with Romania and seven
  million euro for cooperation with Turkey,EUR 7
  million are for cooperation with Serbia and
  FYROM.
• The projects that will be financed with the money
  include the upgrade of several roads, the
  construction of a ring road around Rudozem in
  southern Bulgaria, environment protection and
  infrastructure improvements. Bulgaria will
  provide EUR 10.205 million in co-financing.

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New Crossings on Bulgarian-Greek Border

• Greece has earmarked over EUR 200 million for
  the building of three new crossings on its border
  with Bulgaria Komotini/Makaza, Xanthi/Roudozem
  and Kyprinos/Ivailovgrad.
• Bulgaria and Greece can open two tourist
  crossings, between Zlatograd and Kavala and at
  Smolyan-Arda-Drama, by 2008.
• Bulgaria and Greece are considering an on-train
  control service in order to reduce border
  crossing time on the railway between Sofia and
  Athens.
• Bulgaria and Greece also agreed to develop
  railway cargo operations between two pairs of
  seaports Varna and Thessaloniki, and Bourgas and
  Alexandroupolis.
• The two countries will cooperate under a
  European satellite navigation project named
  Galileo, stating that its application in
  Southeast Europe is a priority for Sofia and
  Athens.
• Also, they will cooperate closely within the EU
  Transport Council and other European
  institutions.

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Trans-border Cooperation

• The projects for trans-border cooperation with
  Greece , Turkey and Romania will receive EU
  financing for EUR 35mn under the PHARE grant
  programme.
• The projects will be channelled to roads
  rehabilitation, construction of new tourist
  centre Perperikon (ancient archaeological remains
  in the eastern Rhodope Mountain), enhancing
  trans-border cooperation, borderland sustainable
  development, environment and cultural inheritance
  preservation. The state budget will secure
  additional EUR 8.8mn to the this scope of Phare
  programmes.

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Regional Cooperation Via UBB and NBG Group
Partnership
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NBG Significant Opportunities for Sustained
Business Relations

• Substantial market growth potential in Greece and
  SE Europe given strong GDP growth and
  under-banked economies
• Extensive cross-selling potential due to
  unexploited client base . two thirds of the
  active population NBG clients
• Significant savings from cost reduction efforts
  and from reallocation of capital to more
  efficient operations
• Strong brand name and trustworthy reputation
• Expanding franchise in SE Europe
• Largest branch network in Greece, with a
  substantial deposit base of 37billion ( 22 of
  GDP)
• Strong capitalization, with core Largest branch
  network in Tier I ratio at 8.8, supporting
  growth

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UBB Significant Opportunities for Sustained
Business Relations

• One of the top 3 Bulgarian commercial banks. One
  of the most effective and best performing banks
  in Bulgaria
• N2 in corporate banking and N2 in retail
• N1 in electronic and 3rd party channels for
  banking products and services
• One of the largest networking Bulgarian banks
  near 200 bank units, 4000 POS Terminals, 523
  ATMs
• Serviced more than 100,000 corporate customers
  and more then 1,000,000 individuals ( near 20 of
  the bankable population)
• High capitalization CAR of 13.4 as of December
  31, 2006
• Senior unsecured debt ratings BBB- (SP)/ BBB
  (Fitch)

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UBBs Branch Network
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Regional Synergies Opportunities

• UBBs regional initiative relies on the fact,
  that we have a very wide-spread presence on the
  entire Balkan Peninsula, as well as that National
  Bank of Greece, of which UBB is a part, is the
  largest bank in Greece.
• For several years already a priority of National
  Bank of Greece is the intensifying of the
  presence throughout the entire region
• Romania (Banca Romaneasca, Urial Leasing, Eteba
  Romania and Garanta NBG Asigurari)
• Serbia (Vojvodanska Banka and NBG
  Serbia)
• FYROM ( Stopanska Banka Skopje)
• Albania ( NBG Albania)
• Cyprus (NBG Cyprus)
• Turkey (Finansbank, the fifth largest private
  bank in the country).

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Regional Synergies Opportunities

• The network of National Bank of Greece consists
  of 1317 branches, 56 of which are present in
  Southeast Europe (excluding Greece), and service
  more than 11m. Clients
• This infrastructure has also directed the focus
  of UBB interest towards the servicing of clients
  not only on the territory of Bulgaria, but also
  throughout the region via NBG subsidiaries and
  branches in the Region.
• Servicing the regional business of clients,
  through developing competitive instruments and
  preferential schemes for trade finance,
  transfers, corporate products and retail
  services
• Support for establishing commercial contacts of
  good clients of NBG Group from one country with
  potential partners from another country in the
  region
• The Banks mediation for draw down of funds under
  programs and projects on the part of clients of
  the Group /incl. cross-border/, financed by the
  EU structural funds

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SMEs Given Access to EU Funding

• A total of 70 of Bulgarian companies are
  optimistic about handling the pressure on the
  competitive European market.
• The Competitiveness Programme, one of the seven
  programmes of EU's structural funds, focuses
  entirely on small and medium-sized (SME)
  enterprises. The programme aims at encouraging
  innovations and improving the business
  environment. Bulgarian companies will be able to
  receive a total of EUR 988 mn under the
  Competitiveness Programme in the period 2007-13.
• Another EUR 433 mn will be directed to
  micro-business trough the National Agriculture
  and Rural Development Plan.
• Various projects for innovative products and
  services, technological development, management
  systems and industrial developments, venture
  capital funds and the setting up of clusters and
  business incubators may apply for funding.

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Regional Synergies Opportunities

• Various projects for innovative products and
  services, technological development, management
  systems and industrial developments, venture
  capital funds and the setting up of clusters and
  business incubators may apply for funding.
• United Bulgarian Bank a 99.9 subsidiary of the
  National Bank Of Greece, is ready to assist
  Bulgarian SMEs and other entities in order to
  maximize benefits from the forthcoming euro-funds
  in Bulgaria, capitalizing on the NBG experience.
• With its mother bank NBG, UBB is also keen to
  assist in the realization of cross-border
  programs between Bulgaria and Greece, bound to be
  launched in the near future.
• For further supporting Bulgarian Companies, UBB
  is in the process of elaborating common actions
  schemes with the most prominent business
  associations of the country.

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Thank you for your attention !