DIMITRIS MILIAKOS Governor of ATEbank

P.M. Communications: Ate Bank was formerly known as the Agricultural Bank of Greece. You have recently decided to change ABG's distinctive title to "ATEbank". How does this new identity express better the values of the organisation?

Mr. Miliakos: The new identity is the comprehensive reflection of a modern multi-sector bank, of the new dynamic course set for the whole Group and the wish to continue to uphold the Bank's traditional corporate values since 1929.

P.M. Communications: On assuming your position in 2004 you stated that your main goal was to carry out a fundamental financial restructuring of the bank, improve the quality of the bank's loan portfolio and raise the bank's share of the domestic market. You have recently announced impressive Q1 2006 financial results, could you please share them with the readers of The Telegraph?

Mr. Miliakos: Financial figures of Q1 2006 show a year-on-year strong increase in post-tax earnings thanks to the interest income on a recurrent basis and the restraint of operating expenses. Such developments strengthen our optimism that the objectives of the Bank's three-year business plan will be achieved. On current trends we have every reason to believe that the 2006 results will exceed our expectations.

- Strong increase in Net Profits (Q1 2006-Q1 2005) by 387.15%

- Remarkable growth in Household Lending (Q1 2006-Q1 2005) by 40.35%

- Effective Cost Containment policy, small reduction of operating expenses (Q1 2006-Q1 2005) by 3.43%

- Coverage Ratio continues to be at satisfactory levels (Q1 2006) 80.47%

- Sustained Capital Adequacy with Tier 1 ratio (Q1 2006) at 13.30%

P.M. Communications: The turnaround of almost all of the companies in the ATEbank Group into profitability and the sustainability of the Bank's profits are the result of an intensive effort at an operational and organizational level. What are the main challenges that you face in your day-to-day activities?

Mr. Miliakos: We are constantly examining ways to improve customer services, raise employees' productivity and control operating expenses. Equally challenging is the constant concern to steer a steady course towards sustained profitability through a period of major changes in the external micro and macro environment.

P.M. Communications: A recent survey highlights a significant decline in the level of trust in banks during the last decade in Greece. How do you keep your clients happy and loyal?

Mr. Miliakos: By offering new products, by continuously improving our overall services and by providing, particularly to loyal customers, access to funds at very attractive rates. This is particularly the case with our core agricultural sector customers.

P.M. Communications: The ND government has made a priority to reduce its presence in the Greek economy in order to strengthen competition and maximise the benefits for the citizens. Please tell our readers about the privatisation process of ATEbank?

Mr. Miliakos: In May 2006 the government sold a 7.18% stake in ATE Bank as part of its 1.65 billion euro privatisation agenda. The Hellenic State currently holds 75.18% of the Bank's share capital and may consider to sell a second package of shares depending on market conditions.

Our charter stipulates that the Greek state is required to own at least 51% of ATEbank shares. The government may consider a further sale to reduce its share and bring it closer to the 51%, depending on market conditions, before the end of its current term (Spring 2008). The sale of 7.18% stake has increased the free float of ATEbank's stock and has made it more marketable. A further exposure to market forces means that foreign and domestic analysts will follow the stock closely and investors will have greater access to analysis and information.

In order to meet these new challenges the primary focus of the management team, according to a well-documented three year business plan (2005-2007), has been on transforming ATEbank into a highly competitive financial institution with enhanced transparency, coverage ratios and key financial figures comparable to its peers.

P.M. Communications: Greek banks with international ambitions must increase their size and transcend their national character by becoming regional forces. ATEbank has recently signed a cooperation agreement with the American Bank of Albania and an additional purchase agreement with the Romanian Mindbank. What is your strategy for further expansion in the region?

Mr. Miliakos: One pillar of our growth strategy is to diversify our income sources by expanding our activities in neighbouring countries with top international financial players. We are already actively exploring the opportunities offered to ATEbank to expand in South East Europe.

The privatisation programs for financial institutions in several countries are nearing completion and multiples of potential targets have risen significantly. However, just like most of our peers, we are focusing on the high-growth markets of the rapidly developing economies in this region because we believe that there are still major opportunities to be exploited.

P.M. Communications: The Greek market is small and its attractiveness lies in the positions of its banks in the markets of the broader region and the access it provides to these markets. What are the prospects for Greece to become a regional capital and what role will the finance sector play in this?

Mr. Miliakos: Over the last few years thanks to its key geographic location, Greece links the East with the West, the Mediterranean with the Balkans, and serves as the business hub for some of the biggest multinational companies. On the other hand, Greece is actively engaged in regional activities such as the Black Sea Trade and Development Bank, the Southeast Europe Cooperative Initiative and its own 500 million Euro Balkan Reconstruction Plan. They all focus on upgrading the infrastructure, cooperation and trade among all the countries in the region. It is inevitable for Greece, a senior member of the E.E., to play a major role towards the economic integration of neighbouring candidate countries.

Among the many areas of investment has been banking and finance. Given the relatively small size of Greek banks and the large number of their shareholders, there are favourable conditions for creating a new framework necessary for collaborations and partnerships both in Greece and in the new markets of South East Europe. The Greek banking sector forges its own way and is planning changes in strategy that will enable banks to make their presence felt mainly in the Balkans where they can openly compete with other E.E. banks.

P.M. Communications: The market has shown its confidence by including ATEbank shares in the prestigious FTSE/ATHEX 20 Index. Why is ATE Bank attractive for foreign investors and what would you highlight as your main competitive advantages?

Mr. Miliakos: The Bank's shares appear to be attractive given the results from its restructuring and the fact that the Bank has built a strong franchise in the regions outside Athens, which are relatively under banked. We are currently seeing a strong growth in banking services in these regions.

I believe that ATEbank has many competitive advantages. We have the second largest nationwide distribution network with 458 branches and 690 ATMs. ATEbank has a significant presence (72% of the network) outside the Athens and Thessalonica metropolitan areas, where population is relatively under-banked. The Bank has been growing steadily and it has a loyal customer base providing access to funds at very attractive rates. Furthermore, we have a wide brand recognition and customer loyalty, as well as relatively lower cost of funds thanks to the size and composition of our deposits base.