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					 Annual Report by the Chairman
         of the Board of Directors
of the Bank on the Balance Sheet
              for Fiscal Year 2002

                 Athens 2003
    Table of Contents




2
Key Figures for the Bank and Group, 2001-2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5


1. Board of Directors of the Commercial Bank of Greece . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6-7
2. Address by the Chairman of the Board of Directors to the Shareholders . . . . . . . . . . . . . . . . . . . .                                 8-13
3. The Financial Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14-19
4. Developments in the Banking Sector . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20-23
5. The Strategy of the Commercial Bank Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24-27
6. Activities of the Commercial Bank Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28-45
7. Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46-49
8. Analysis of the Bank’s Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50-57
9. Analysis of the Group’s Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58-61


10. BALANCE SHEETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Accounting principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63-65
Balance Sheet of Commercial Bank for Fiscal Year 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66-70
9th Consolidated Balance Sheet of the Companies of the Group for Fiscal Year 2002 . . . . . . . . . . . .71-75
Summary of the Minutes of the Annual Ordinary General Meeting
of the Shareholders of the Commercial Bank of Greece S.A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .76




                                                                                                                                                           3
4
       KEY FIGURES FOR THE BANK AND THE GROUP 2001-2002 (in EUR million)
                                                                                                Group                               Bank
                                                                                            2002      2001                      2002    2001
                                                                      Assets
Net loans and advances to customers                                                   10,168.6            8,736.5           9,791.9 8,441.0
Bonds, bills and other fixed-yield securities1                                         4,359.1            5,479.4           4,109.9 5,268.9
Total assets                                                                          16,891.4           18,143.1          16,448.3 17,721.2
                                                                    Liabilities
Amounts due to customers                                                              13,296.3           13,593.4          13,152.0 13,429.3
Own funds                                                                              1,220.4            1,973.4           1,255.2 2,014.0
                                                         Number of employees
                                                                                           7,679             7,604             6,898          6,912
                                                                      Results
Net interest income                                                                        560.8             509.5             467.6          429.2
Net fee and commission income                                                              145.7             140.3             130.8          125.3
Gross operating income                                                                     767.2             875.7             667.5          893.8
Staff costs                                                                                357.1             342.3             329.9          324.1
Total costs2                                                                               592.0             558.1             477.1          461.6
Net earnings (before tax)                                                                   89.6             243.2             118.2          374.0
Net earnings (after tax and minority rights)                                                52.2             146.3              86.2          282.8
                                                              Structure indices
Net loans and advances to customers / Total assets (%)                                       60.2              48.2              59.5           47.6
Bonds / Total assets (%)                                                                     25.8              30.2              25.0           29.7
Provisions / Gross loans and advances to customers (%)                                        2.7               2.9               2.6            2.7
                                                 Profitability and efficiency ratios
Net interest margin (%)                                                                       3.2               3.0                2.7           2.6
Return on average assets (ROAA) (%)3                                                          0.5               1.4                0.7           2.2
Return on average equity (ROAE) (%)                                                           5.6              12.1                7.2          19.4
Efficiency ratio
(Operating expenses4 over operating income5) (%)                                             68.4              70.9              73.7           77.6
                                                          Capital adequacy (%)
∆ier-16                                                                                     10,37       17,1                    10,8       17,7
Credit ratings                                                                                 Long-term                        Short-term
Standard & Poor’s                                                                                 BBB-                             A-3
Moody’s                                                                                           Baa1                             P-2
FITCH-IBCA                                                                                        BBB+                             F2




1 Refers to the sum of "Bonds and Other Fixed-Yield Securities" and "Treasury Bills and Other Securities Eligible for Refinancing with the Central Bank".
2 Total costs are defined as the sum of general administrative expenses, depreciation and other operating expenses.
3 The return on average assets and on average equity are calculated on the basis of pre-tax profits over average assets and average equity using
averages of end of year figures.
4 Operating expenses are defined as general administrative expenses (staff costs and other administrative expenses).
5 Operating income is defined as the sum of net income from interest and commissions.
6 For CBG, the aggregate capital adequacy ratio coincides with the basic capital adequacy ratio (Tier-1).
7 Estimate.


                                                                                                                                                            5
    1. Board of Directors
       of the Commercial Bank of Greece




6
                   Chairman of the Board and Managing Director
                                 Ioannis A. Stournaras

                 Vice-Chairman of the Board and General Manager
                                Georgios I. Michelis

                                     General Manager
                                     Dimitrios D. Frangetis



                                          Directors
         Panagiotis D. Alexopoulos                               Michel Le Masson
      Governor, "Evangelismos" Athens             Representative of Caisse Nationale de Crédit
              General Hospital                                        Agricole


        Theodora G. Antonopoulou                          Georgios K. Moutsopoulos
                Entrepreneur                                         Economist


            Andreas P. Bekiaris                                  Ioannis D. Nikolaou
         Employees’ representative                     Chairman, Manpower Employment
                                                                Organisation (OAED)
          Gerasimos E. Boudouris
Governor, Agricultural Insurance Organisation                     Jean-Luc Perron
                   (OGA)                               Representative of Caisse Nationale
                                                                  de Crédit Agricole
            Andronike E. Boumi
     Chairwoman, Postal Savings Bank                          Georgios K. Spiliopoulos
                                                              Lawyer, Commercial Bank
           Fokion F. Dimakakos
         Employees’ representative                                   Secretary
                                                               Grigorios G. Chryssikos
        Konstantinos S. Kastrinakis                           Manager, Commercial Bank
   Vice-Chairman of the Board of Directors,
     KANTOR S.A. Business Consultants



Mr Michel Le Masson was elected Director on the 27th May 2002, in replacement of Mr Christian
Besse of Clement Roger Maurice, who resigned on the same day.

                                                                                                 7
    2. Address by the Chairman of the Board of
     Directors to the Shareholders




8
   Ladies and Gentlemen,                                annual growth rate in 2001 was 1.5% and only
                                                        0.8% in 2002 as against an average growth rate of
   The developed economies are currently                2.6% during the five-year period 1996-2000. A
experiencing moderate growth rates with low             similar slowdown was observed in the USA where
capacity utilization levels, excess liquidity, a        the growth rate was only 0.3% in 2001 and 2.4% in
substantial decline in capital expenditure, low         2002 in comparison to annual growth rates of over
consumer confidence and a decline, for the fourth       4% during the five-year period 1996-2000. Even in
consecutive year, of the values of the major stock      Japan where the growth rate during the period
market indices.                                         1996-2000 was already low, and in fact lower than
   To a large extent these developments can be          1.5%, there was a further slowdown during the
thought of as the downturn of the investment cycle      period 2001-2002 and the rate of growth did not
that started in the second half of the 1990s. The       exceed 0.4%.
distinguishing feature of the expansion phase of           This slowdown has had a significant negative
this cycle was the expectation of unusually high        effect on share prices. At the end of 2002 the main
returns in the so-called "new economy" sectors and      stock market indices in developed economies were
in telecommunications. These expectations led to        considerably lower than at the end of 2000; the
high market valuations and to increased capital         main stock market index of the German stock
expenditure throughout all sectors in anticipation of   market, the DAX, was at the end of 2002 55% lower
substantial    improvements       in   total   factor   than at the end of 2000. The main index of the
productivity arising from the extensive use of new      French stock market CAC-40 declined by 48% in
technology.                                             the same period, the S&P-500 index was lower by
   The fact that the initial expectations were not      33% while the NASDAQ composite index was
fulfilled marked the turn of this investment cycle      lower by 46%. It has to be stressed that the decline
and initiated the downward trend of stock market        of these indices from their values at the peak of the
indices, the decline in investment expenditure and      cycle was, however, much greater.
the decrease in profits. These developments                The reaction of capital markets, the largest
together with the terrorist attacks of September        recorded in the post-war period, was however
11th 2001, the so-called "corporate scandals" in the    much more exaggerated than the economic
USA, and the most recent geopolitical uncertainties     slowdown observed during the same time period.
created adverse conditions in capital markets.          In 2003 share prices in many Eurozone countries
   For developed economies the year 2002 was            and in the USA reached levels last recorded in
the second consecutive year for which growth was        1996 despite the fact that overall company profits
lower than that observed during the five-year           in 2002 were higher and of a better quality than in
period 1996-2002. In the Eurozone the average           1996. The magnitude of the decline in share prices



                                                                                                                9
     during the last few years is, in some sense, the         high rate of growth of investment is due to the
     mirror image of their exaggerated increase in the        historically low level of interest rates, the flow of
     previous period.                                         funds through the 3rd Community Support
        The adverse conditions in capital markets             Framework (3rd CSF) and the infrastructure works
     worldwide affected the Greek capital market. At the      related to the Olympic Games.
     end of 2002 the Athens General Price Index was              As a result of the high rates of growth of
     48.4% lower compared to the end of 2000 while the        investment and consumption during 2002 the
     FTSE-20 and FTSE-40 indices had declined by              credit expansion to both the corporate sector and
     56% and 53% respectively.                                to households continued. At the end of 2002 the
        The Greek economy, however, continued to              outstanding balances of loans to the corporate
     grow robustly during the two-year period 2001-           sector where by around 10% higher than at the end
     2002. In fact, in 2002 the growth rate of the Greek      of 2001 while the outstanding balances of loans to
     economy was the highest in the Eurozone with             households were by around 32% higher.
     both consumption and investment contributing to             The expected high rates of growth of
     this growth rate. In 2002 private consumption, in        consumption and investment for the next few years
     real terms, increased by 2.5% while capital              will lead to further credit expansion to households
     expenditure increased by around 7%. The increase         and enterprises. Opportunities for further
     in capital expenditure in Greece as opposed to a         penetration of the financial sector in economic
     decline in the Eurozone is actually the most             activity are high in Greece since the current level of
     significant    difference    in   macroeconomic          lending over GDP is much lower than in the
     developments.                                            Eurozone. At the end of 2002 total credit to
        Despite the slowdown in the world economy,            enterprises and households was equal to 61% of
     the prospects for the Greek economy both this            GDP in Greece compared to 100% in the
     year and in the years to come are positive. More         Eurozone. The difference between Greece and the
     specifically it is expected that the rate of growth in   Eurozone is more apparent regarding lending to
     2003 will be of the order of 3.6%; over three times      households. In Greece outstanding balances of
     higher than the corresponding rate for the               loans to households amount to 23% of GDP
     Eurozone. For 2004, the year of the Olympic              compared to 47% in the Eurozone.
     Games, growth is expected to increase further.              The Commercial Bank of Greece (CBG) is
     Growth in both years will again depend on both           capturing an increasing share of this expanding
     consumption and investment. For 2003, the                market. Outstanding balances on advances and
     Ministry of Economy and Finance expects private          loans to customers at the end of 2002 were by 16%
     consumption to increase by around 3% while               higher compared to the end of 2001 leading to an
     investment is expected to increase by over 9%. The       increase in market share of the Group in lending.



10
The focus of the Bank’s activities in the last couple   for total profitability of the Greek banking sector.
of years has been the area of retail banking;           Indicative of the negative sentiment that prevailed
individuals and Small and Medium-sized                  is the fact that the profits of all large Greek banks
enterprises (SMEs). In this area we are benefiting      decreased substantially. This deterioration is due
greatly from the invaluable experience of our           to the lower results from financial transactions.
strategic partner, Crédit Agricole. As a result the        For the CBG Group net profits after tax and after
percentage of the Bank’s loans in the area of retail    minority rights amounted to Euro 52.2 million
banking increased substantially and amounted to         showing a decrease of around 64% compared to
62.3% of loans in 2002 compared to 57.3% in 2001        2001. The decrease in Group profits is due to the
and 54.3% in 2000.                                      decrease in the results from financial transactions
   The expansion in lending together with the           and the revenues from securities, which were
increased presence in the area of individuals and       negatively affected especially by the adverse
SMEs, where profit margins are higher, resulted in      conditions in the insurance sector that impacted on
an increase of revenues from core operating             the consolidated results through the revenues of
activities and a further improvement in the net         our largest subsidiary Phoenix-Metrolife. At the
interest margin. Revenues from core operating           same time the 2002 results were affected by the
activities, the sum of net interest income and fee      cost of the restructuring of the Group (mergers,
and commission income, were by 9% higher than           creation of new companies). The adverse
in 2001. This rate of increase was amongst the          conditions in the capital markets in the last few
largest in the Greek banking sector. In 2002, the       years resulted in valuation losses in the investment,
net interest margin of the Group increased to 3.2%      participation and trading portfolios of the Bank. At
from 3.0% in 2001 and is amongst the highest in         the end of 2002 the value of the portfolios of the
the market.                                             Bank were adjusted to take these valuation losses
   These developments are the result of the             into account. Taking into account the above
transformation of the Bank that started in 2000         developments the Board of Directors suggest a
through the restructuring of the branch network,        dividend of 40 cents (0.40 Euro) per share.
the voluntary exit schemes, the promotion of new           Developments of the last few years have made
officers in high positions, the improvement of the      clear that banks can no longer rely on non-
information technology infrastructure of the Bank.      recurrent sources of revenue such as the income
At the same time a restructuring of the Group was       from financial transactions. The focus must now be
initiated through the merger of subsidiaries, the       on the expansion of the core banking activities.
creation of new companies, and the closure of           Opportunities for enhancement of revenues from
other companies.                                        core operating activities are big since the
   The year 2002, however, was not a good year          penetration of the banking sector in the economic



                                                                                                                11
     activity of the country is still quite low.             the Bank concerns the improvement in the
        At CBG in 2002 in order to gain greater market       management of credit risk. To this effect we have
     share in this expanding market and in order to          extended the use of a standardized way of taking credit
     increase our core operating revenues we                 decisions while we have also improved the system of
     intensified our efforts for the modernization of the    monitoring and managing delayed payments.
     Bank. These efforts were integrated in one plan,           A third step to enhance our position in retail
     code named "Pegasus". The plan aims to improve          banking is the establishment of a model company
     the operation and the image of the Bank in order to     in the area of consumer credit. Emporiki Credicom,
     increase revenues from retail banking and improve       the new company with equal participation by the
     its market share.                                       Bank and Sofinco, the subsidiary of CA in this field,
        The first step in this direction is the              will start its operation this summer and will provide
     development of a modern operational business            consumer credit through points of sale thus being
     model. To this effect there has been a coordinated      in direct contact with the customer (for e.g. in stores
     effort for the segmentation of our clientele,           selling white goods, cars etc).
     development of a specialized business plan by              In the state of full implementation of the
     unit, restructuring of branches together with an        "Pegasus" plan we expect our net result from retail
     increase in the number of customer officers,            banking to more than double compared to its
     extension of alternative distribution networks          current level. This target might seem ambitious but
     (ATMs, telephone banking, e-banking), redesign          is nevertheless attainable and is based on specific,
     and automation of procedures and corporate              manageable initiatives. About two-thirds of the
     rebranding in order to signal our new philosophy.       expected improvement in the result is expected
     At the same time the number of products offered         through the increase in revenues while the rest is
     has been enriched (e.g. "Easy Business", new            expected to arise from improved management of
     savings products) and cross-selling has been            credit risk, both in the area of retail banking as well
     promoted (e.g. sale of bancassurance products           as from improved management of delayed
     through the Bank’s branch network, advancement          payments.
     of the promotion of the products of the leasing and        The increase in revenue from households is
     factoring subsidiaries of the Group through the         expected both from our increased penetration in
     branch network, creation of the web site interex.gr).   customer segments, where our presence today is not
     In this way we achieve a high degree of                 satisfactory as well as by expansion of cross-selling. In
     commitment by our customers, we increase the            the area of corporate banking the increased revenue
     number of products sold per customer and we             will arise from our improvement in market shares,
     attract new clients.                                    following our increased customer focus, and the better
        The second important step in the transformation of   management of delayed payments.



12
   During 2002 the Bank also developed further its        that introduce flexibility in the operation of
relationships with big corporates by advancing            occupational pension funds and give pension
profitable banking services (both through the             funds the permission to employ professional
domestic and international subsidiaries of the            managers is expected to boost the company’s
Group) together with the services of other Group          activities.
companies such as leasing, factoring, and
investment banking.                                          Ladies and Gentlemen,
   In Greece, in addition to opportunities in bank
lending, which as a percentage of GDP is at much             The CBG Group is today one of the most
lower levels compared to the Eurozone, significant        dynamic financial Groups in the country with a
opportunities for expansion exist in other areas of       significant presence in all areas of the financial
the financial sector as for e.g. in bancassurance         sector. Our aim is to constantly develop our
and asset management.                                     presence through the supply of high quality
   At CBG we are active in the area of                    products and services in order to fully cover the
bancassurance through a joint venture with CA,            needs of households and enterprises. Our vision is
Emporiki Life. The Bank and Predica, the subsidiary       for a modern, flexible, customer-oriented Group
of CA in this area, have an equal participation in        with the main aims of steadily increasing our
Emporiki Life that started operations in 2002. Predica    profitability and the return of capital of our
which is one of the leaders in its field in France and    shareholders, of customer satisfaction and of
in the Eurozone participates actively both in the         modern working conditions for our employees.
management of the firm and by transferring its know-         The year 2002 was without doubt a difficult year
how in the design and distribution of products as well    for the banking sector. At CBG we put significant
as the training of personnel. Emporiki Life is an ideal   effort to transform the Bank and to modernize the
example of a business line in which we "exploit" the      Group. At the end of 2002 we marked to market
know-how of our strategic partner and the extensive       our portfolios to take account of negative valuation
branch network of the Bank to offer new original          adjustments, we developed closer ties with our
products in the Greek market.                             strategic partner Crédit Agricole, we advanced the
   In the area of asset management at the end of          synergies between the companies of the Group,
2001 a new firm was established, Emporiki Asset           we merged subsidiaries, we concentrated our
Management, active in asset management for                efforts on recurrent sources of revenue and with
institutional investors. The Bank participates with a     the commitment and creativity of our personnel we
share of 80% while Crédit Agricole Asset                  designed our new image and we promote our
Management (CAAM) participates with a share of            customer oriented philosophy. We are confident
20%. Recent changes in the institutional framework        that our efforts will bear fruits.



                                                                                                                 13
     3. The Financial Environment




14
3.1 GLOBAL ECONOMIC DEVELOPMENTS                                OECD      area    during    the   past     year,   from
                                                                approximately 3% in 2001. Inflation in the Euro-zone
   In 2002, the rate of increase of global economic             in 2002 also stood at 2.2%, as against 2.4% in 2001.
activity is estimated to have accelerated to 2.8%                  The economic policy carried out during 2002
from 2.2% in 2001. This development is attributed               sought to create the conditions for supporting
to the recovery of the rate of economic growth in               economic activity. Consequently fiscal policy was
the OECD area, as well as to the acceleration of                expansion oriented. The general government deficit
               Gross Domestic Product
          (annual percentage change in real prices)             for the OECD area as a whole (excluding Mexico,
2.5
                                                                Switzerland and Turkey) widened to approximately 3%
2.0                                                             of GDP in 2002 from 1.4% in 2001. In the Eurozone,
                                                                the easing of fiscal policy, combined with the
1.5
                                                                slowdown in economic activity, led to the widening of
1.0                                                             the deficit of the general government to 2.3% of GDP
                                                                in 2002, as against 1.5% of GDP in 2001.
0.5
                                                                   The monetary policy applied in 2002 also contributed
0.0                                                             to boosting recovery. Short-term rates were decreased
                                                                in all OECD member-countries (with the exception of
-0.5
                                                                Japan, Sweden, Slovakia and N. Zealand). The US
-1.0        USA              JAPAN           EUROZONE           Federal Bank maintained the federal funds rate at a

                                                  2001   2002   record-low of 1.75%, further decreasing it in November
growth in developing Asian economies.                           by 50 basis points (to 1.25%). The minimum bid rate of
   In particular, the rate of economic growth in the            the European Central Bank for main refinancing
OECD area stood at 1.5% versus 0.7% in 2001. In                 operations remained at 3.75% and was decreased twice
the USA, economic activity recovered (2002: 2.3%,               during the period November-December 2002, finally
2001: 0.3%) as a result of the increase in both                 reaching 2.75%, while today it stands at 2.5%.
private and public consumption. In contrast, the                   In 2003 the rate of increase of economic activity
annual rate of increase of GDP in the Eurozone                  is expected to approach 2.2% in the OECD area
further slowed down (2002: 0.8%, 2001: 1.5%), due               and 1.8% in the Eurozone. In spite of the expected
to the decline in private consumption and                       acceleration of economic growth, inflation -as
investment. The growth rate of the Japanese                     measured by the percentage change in the GDP
economy is estimated to have been negative for the              deflator- is expected to stand at relatively low levels
second year running (2002: -0.7%, 2001: -0.3%).                 (OECD area: 1.8%, Eurozone: 1.9%). Nevertheless,
   Inflation -as measured by the percentage                     the heightening of current geopolitical risks will
change in the GDP deflator- fell to 2.2% in the                 result in a slower pace of economic growth, while



                                                                                                                          15
     inflationary pressures during 2003 will be stronger.                   estimated to have increased by 6.7% in 2002 from
                                                                            6.9% in 2001, while the rate of increase of total
     3.2 DEVELOPMENTS IN THE GREEK ECONOMY                                  consumption accelerated (2002: 3.1%, 2001: 2.2%).
           Macroeconomic developments                                           The increase in economic activity is estimated
                                                                            to have led to a drop in the unemployment rate by
           In 2002 domestic economic activity continued its                 0.6 percentage points to 9.9% (2001: 10.5%).
     positive course. The rate of increase of GDP                               The rate of inflation -as measured by the
     remained high and, according to the latest                             percentage change in the national consumer price
     provisional estimates of the Greek National Statistical                index- accelerated to 3.6% in 2002 from 3.4% in
     Service, it stood at 4% (2001: 4.1%). The main                         20011. The main sources of inflationary pressures
     factors which supported the increase in economic                       were the increase in the prices of fresh fruit and
     activity were business investments, private housing                    vegetables due to the adverse weather conditions,
     investments, investment programmes under                               the increase in the international prices of crude oil
     implementation in the context of the preparations for                  and the increase in the prices of certain consumer
     the 2004 Olympic Games, as well as large-scale                         goods and services following the introduction of the
     projects financed under the 3rd Community Support                      Euro in its physical form. In any case, the modest
     Framework (CSF III). Total investment demand is                        slowdown in core inflation -as measured by the
                                                                            percentage change in the consumer price index
                        GDP and Gross Investment
               (annual percentage change at constant prices 1995)
     10                                                                     excluding fresh fruit and vegetables- to 3.6% in 2002
                                                                            from 3.8% in 2001, was a positive development.
                                                                                In the field of public finance, the key indicators
       8
                                                                            improved. The general government budget posted a
                                                                            primary surplus of 4.4% of GDP. The general
       6
                                                                            government deficit as a percentage of GDP is estimated
                                                                            to have marginally decreased in the past year, standing
       4
                                                                            at 1.1% from 1.2% in 2001. The decline in the general
                                                                            government debt as a percentage of GDP to 105.3% in
       2
                                                                            2002 from 107% in 2001 was a positive development.
                                                                                Regarding monetary aggregates, the annual
       0
                    2000               2001              2002               rate of increase of the Greek M32 throughout 2002

                                                  GDP      GROSS INVESTMENT
     1 Inflation based on the harmonised consumer price index, which is used for comparing inflation rates across the Eurozone, stood at 3.9% in
     2002, and the difference with the inflation rate for the Eurozone was reduced to 1.4 percentage points from 1.8 percentage points in 2001.
     2 M3 includes currency in circulation, overnight deposits, savings deposits, deposits redeemable at notice up to 3 months, deposits with
     agreed maturity of up to 2 years, repos, money market mutual funds shares and debt securities with a maturity of up to 2 years issued by
     monetary financial institutions.



16
remained lower than the growth rate of M3 in the                   Loans to Businesses and Households
                                                                         (annual percentage change)
                                                        50
Eurozone. At year-end, it stood at -1.8% from 7.4%
at the end of 2001. This decline is attributed to the
slowdown in the overall credit expansion during         40

2002, to the significant reduction in the net foreign
assets of monetary financial institutions, and to the   30

shift of funds from repos to investments not
                                                        20
                         Deposits
                 (annual percentage change)
15
                                                        10

12

                                                          0
 9                                                         2001                       2002


                                                                                     BUSINESSES       HOUSEHOLDS
 6
                                                        total deposits with banks reaching EUR 104.8
                                                        billion, with the 12-month rate being limited to 3%.
 3
                                                              Credit extended to businesses and households

 0                                                      by monetary financial institutions exhibited an
  2001                        2002
                                                        annual growth rate of 16.9% in December 2002, as
                                                        against 24.8% in December 2001. This slowdown

included in M3 and to government securities.
                                                                      Housing and Consumer Credit
                                                                         (annual percentage change)
     The shift of savings resources away from repos
                                                        60
-due to the reintroduction of taxation of interest as
of 1.1.2002- to other more profitable investments
led to the significant slowdown of the annual           50

growth rate of repos and resulted in negative
growth rates from April 2002 onwards. At year-end,
                                                        40
the outstanding balance of repos stood at EUR
19.5 billion, showing a decrease of EUR 4.7 billion
compared to the end of 2001 (-19.4%).                   30
     In the ten-month period from January to October
2002, total deposits were increasing at rates of 10-
12%. In the period from November to December            20
                                                           2001                       2002
2002, this rate decreased significantly, resulting in
                                                                    HOUSING LOANS            CONSUMER LOANS



                                                                                                                   17
     reflects the limited increase of credit to businesses    investors shifting to government bonds.
     (2002: 9.6%, 2001: 18.5%), as well as the decline in        The value of transactions in the Electronic
     the rate of increase of credit to households, which      Secondary Securities Market (HDAT) increased by
     nevertheless remained at a high level (2002:             EUR 2.3 billion in 2002, compared to EUR 1.3 billion
     32.2%, 2001: 40.4%).                                     in 2001. The increase in the demand for bonds led
        The decline in credit extended to businesses is       to a decrease in their yields. The yield curve for
     mainly due to the significant reduction in the           government bonds moved downwards and posted a
     outstanding balance of loans to agriculture but also     higher slope in the 3 to 10 year maturities, a fact
     to the noticeable slowdown in the rate of increase       indicating that markets are optimistic regarding
     of loans to other sectors of economic activity, with     future economic activity.
     the exception of industry and tourism, where                Following the upgrading of the country’s credit
     significant growth was observed.                         rating, the yield differential between the Greek 10-
        The slowdown of the rate of increase of loans to      year and the German 10-year government bonds
     households is due to the significant decline in the      declined mainly during the last two months of 2002.
     rate of increase of consumer loans (2002: 24.2%,         At the end of 2002, it was limited to 23 basis points,
     2001: 42.5%). In contrast, the rate of increase of       a development reflecting the reduction in the
     housing loans remained high (2002: 35.6%, 2001:          country risk for funds invested in Greece.
     38.9%). This is attributed to the increased financing
     needs of borrowers, to the changes implemented              Stock market
     this year resulting in a less favourable tax treatment
     of interest on housing loans, as well as to the             The negative developments in international
     competition between banks and the low interest           stock markets, as well as the drop in the
     rates in the market for housing loans.                   profitability of many businesses listed on the
        Total loans to households (consumer, housing,         Athens Stock Exchange (ASE), had a negative
     other) represented 22.6% of GDP at the end of            impact on the Greek stock market. Share prices,
     2002 (2001: 18.2%), while this percentage stood at       the volume of transactions and funds raised on the
     around 47% in the Eurozone.                              stock market during 2002 stood at very low levels
                                                              compared to 2001. The adverse evolution of the
        The bond market                                       ASE stock market values and indices was
                                                              commensurate with global developments.
        During 2002, the negative climate prevailing in          At the end of 2002, the ASE composite price
     the international stock markets and the downward         index closed at 1,748.4 points, exhibiting a decline
     revision of forecasts for the recovery of economic       of 32.5% in comparison to the end of 2001. Share
     activity in the USA and in the Eurozone, resulted in     prices in all sectors declined. The price-earnings



18
ratio (P/E) for all ASE-listed shares dropped to 14        economic growth in the Eurozone countries. The
at the end of December 2002, down from 18 at the           positive prospects for the economy are based on the
end of December 2001.                                      increase in investment and private consumption. The
   The value of transactions was limited to EUR 24.8       demand for both public and private productive
billion (2001: EUR 42.4 billion), with the daily average   investments will increase in the context of the
value of transactions standing at EUR 100 million          implementation of infrastructure projects financed
(2001: EUR 166 million). The total funds raised on the     under the 3rd Community Support Framework (CSF
stock market by 37 companies (2001: 40 companies)          III) and the projects for the 2004 Olympic Games,
through share capital increases, reached EUR 353           which will either be completed or will further progress
million (2001: EUR 836 million). Of these companies,       during this year. Private consumption will be
14 listed their shares on the stock exchange as IPOs,      positively affected by the increase in disposable
raising a total of EUR 86 million funds.                   income, by tax relief measures and by low interest
                                                           rates, while it will be negatively impacted by the
   Mutual funds                                            prolonged international stock market crisis and the
                                                           uncertainties prevailing in connection with
   Mutual funds assets declined during 2002, since         international economic and political developments.
they were significantly affected by the drop in share         The economic policy applied supports the increase
prices in the Greek stock market. At the end of 2002,      in economic activity. The main goal of fiscal policy is
the value of mutual funds total assets was 5.2%            the further improvement of fiscal indicators. It is
lower than at the end of 2001. During the same             estimated that this development, in combination with
period, the decline in the value of equity mutual          the promotion of structural changes, will contribute to
funds assets was also very significant (-31.7%).           supporting a high rate of increase of GDP.
                                                              Nevertheless, the heightening of geopolitical
   Prospects for the Greek economy in 2003                 risks will have negative effects on the economy,
                                                           either directly or indirectly, the magnitude and extent
   The rate of increase of economic activity is again      of which cannot be accurately assessed. In any
expected to remain high during 2003 -although it will      case, it is estimated that the rate of increase of GDP
exhibit a slight slowdown in comparison to 2002- and       will be maintained at a satisfactory level and will be
will be more than twice the estimated average rate of      higher than the Eurozone average.




                                                                                                                     19
     4. Developments in the Banking Sector




20
   2002 was a difficult year for the Greek banking                            Breakdown of Banking Groups'
                                                                              Gross Operating Income 2002
system, as bank profitability decreased for the
                                                                                INCOME FROM
                                                                                   FINANCIAL          OTHER OPERATING
second year in a row. The financial indicators of                                                           INCOME 5%
                                                                             TRANSACTIONS 4%
banks (assets, loans, deposits) increased, but the                   INCOME FROM
                                                                    SECURITIES 1%
negative climate prevailing in the stock market
                                                                        NET
resulted in the further reduction of income from                 COMMISSION
                                                                    INCOME
financial transactions, while income from securities                    21%

was also reduced.
   The noticeable reduction in profitability in 2002
compared to 2001, as it is also shown by the
analysis of the data of the five largest banking                                                            NET INTEREST
                                                                                                            INCOME 69%
groups, is clearly reflected in the drop in the Return
                                                                Source: Analysis of data based on published balance sheets of
on Assets (ROAA: 0.82% from 1.37%) and in the                   the following banking groups: Commercial, National, Alpha,
                                                                Eurobank Ergasias, Piraeus.
Return on Equity (ROAE: 12.31% from 17.38%)
ratios by 40% and 30% respectively. The shrinkage               the contribution of interest income to total gross

of income from financial transactions, combined                 operating income. In particular, in 2002 net interest

with the valuation of bank portfolios at lower levels,          income represented 68.77% of gross operating

had a negative effect on profitability, in spite of the         income, as against 58.26% in 2001 and 46.57% in

increase in the volume of retail banking activities.            2000.

   During 2002, banks once again relied heavily on                  There were no significant changes in terms of

traditional activities, as shown by the increase in             competition. The Greek banking system continues

              Breakdown of Banking Groups'                      to be characterised by a high level of
              Gross Operating Income 2001
                                                                concentration. The five largest banking groups in
           INCOME FROM             OTHER OPERATING
              FINANCIAL                  INCOME 5%
       TRANSACTIONS 15%                                         the country still hold the largest market share in
                                                                retail banking.
   INCOME FROM
  SECURITIES 2%                                                     Housing and consumer loans constitute the key
                                                                competition areas for Greek banks. Nevertheless,
                                                                significant competition and activities are expected
                                                                in new deposit products offering higher yields to
           NET                                                  customers. Moreover, also due to the limited scope
    COMMISSION
       INCOME                                                   for significant differentiation in the interest rates of
           20%
                                            NET INTEREST        banking products, the emphasis has shifted to the
                                            INCOME 58%
                                                                quality of services provided, the strong presence
Source: Analysis of data based on published balance sheets of
the following banking groups: Commercial, National, Alpha,      and the development of alternative sales networks,
Eurobank Ergasias, Piraeus.
                                                                with the objective of responding to the increasing

                                                                                                                                21
     demands of the clientele and increasing                     The moves for a second wave of mergers and
     commission income which has been stable in               acquisitions in the Greek banking sector
     recent years.                                            continued, albeit to a lesser degree, in spite of the
        During the last years, Greek banks have               decline in bank valuations. Besides, a clear picture
     implemented significant investments covering the         has not yet emerged concerning the final outcome
     entire range of their activities. These investments      and the consequences for the banks which have
     were made in the context of changes in the               been involved in mergers and acquisitions from
     demand for banking products and in response to           1998 onwards.
     the needs of the banks’ clientele, as well as in the        As regards their activity abroad, Greek banks
     context of efforts to reduce operating costs. The        are carefully planning their international expansion,
     comparative advantage now lies with banks                focusing mainly on Balkan countries and on
     possessing highly-qualified human resources,             countries in Southeastern Europe in general, given
     flexible and innovative products and the capacity to     the pivotal role of Greece as a financial centre in
     create economies of scale, in the context of             the region.
     vertically integrating financial activities and             The prospects for banks in 2003 are relatively
     migrating customers internally to the companies          favourable, as banks are expected to improve both
     operating within the group of each bank. At the          their financial indicators and their profitability. The
     same time, the restructuring and redesigning of the      strengthening of financial indicators and of
     branch network is a critically important factor that     profitability, which will be based on the provision of
     will contribute to the expansion of bank activities,     integrated and competitive services, combined
     while the on-going development and upgrading of          with the rationalisation of the portfolios of most
     alternative sales networks (especially of e-banking)     banks, are elements that will strengthen the
     for selling financial products constitutes a strategic   solvency of, and confidence in, the Greek banking
     goal for most banks.                                     system.




22
23
     5. The Strategy of the Commercial Bank Group




24
   The CBG Group is today one of the most                reductions in loan rates in recent years resulted
dynamic financial groups in the country, with            however in a significant increase in the demand for
significant presence in all sectors. Our aspiration is   financial products by households and small and
to continue to strengthen this presence through the      medium-sized enterprises (SMEs).
provision of high-quality services and products to          In CBG, we started by acknowledging that we
cover the financial needs of households and              should exploit the know-how of banks in European
businesses. Our vision is for a modern, flexible,        countries that had a considerably more dynamic
customer-oriented Group.                                 presence and track record in retail banking. Thus,
   The key goals of the Group are to achieve a           also taking advantage of the entrance of Greece in
steady increase in profitability and in the return on    the Eurozone, we established an alliance with
the capital invested by the shareholders, to achieve     Crédit Agricole, the largest French bank. This is a
the best possible levels of customer service and         pioneering alliance for the Greek environment,
satisfaction, and to ensure modern and productive        which is gaining in strength with results at the level
working conditions for the employees of the Group.       of both the Bank and the Group.
   A key strategic goal for the Bank is to increase         At the same time, in order to ensure the
its penetration in retail banking. A key strategic       commitment of our customers, we undertook a
goal for the Group is to exploit the alliance with       radical transformation of the Bank. The actions for
Crédit Agricole and to develop the synergies             the modernisation of the Bank started in 2000. In
between the Bank and its subsidiaries.                   the course of 2002, these efforts were intensified
                                                         and made part of an integrated programme. The
5.1 INCREASED PRESENCE IN RETAIL                         programme, code-named “Pegasus”, essentially
BANKING                                                  aims at improving the operation and image of
                                                         every branch of the Bank, with the ultimate
   The aim for further expansion in retail banking       purpose of increasing revenues from retail banking
follows from the increased demand for these              and improving our market share.
services by households and small and medium-                The first step in this direction is to improve
sized enterprises and from the higher profit             customer service. To this effect, a coordinated
margins in this area.                                    effort was made to divide our clientele into
   Greek banks did not, until recently, consider         segments, develop a specialised business model
households as a target-group for the provision of        for each segment, restructure the branches while
credit. The main reason was that interest rates,         simultaneously increasing the number of customer
both nominal and real, were particularly high, and       managers, and promoting the use of alternative
thus consumer and housing loans were not                 networks (ATMs, phone banking, e-banking). At
attractive options for households. The significant       the same time, new products are being introduced



                                                                                                                  25
     (e.g. "Easy Business", new savings products), and       enterprises represented 34.7% of all loans granted
     cross-selling has been intensified (e.g. sale of        by CBG as against 33.3% in December 2001 and
     bankassurance products through the Bank’s               31.3% in December 2000. Thus, the presence of
     branch network, creation of the interex.gr web site).   the Bank in the market for households and small
     In this way, we achieve the highest possible            and medium-sized enterprises has increased
     commitment of our customers, we increase the            significantly; at the end of 2002, these loans
     number of products sold per customer and we             represented 62.3% of all loans, as against 57.3% at
     attract new customers.                                  the end of 2001 and 54.3% at the end of 2000.
        A second important step in the transformation of        The profitability of the Group in 2002 was
     the Bank concerns the improvement of the credit         adversely affected by the reduced income from
     risk management system. More specifically, we           financial operations and by the significant
     extended the use of a standardised procedure            restructuring of the Group (mergers, establishment
     (credit scorecard), for taking credit decisions in a    of new subsidiaries). The operating revenues of the
     more valid and less time-consuming manner. While        Bank and the Group did however increase
     the method used for monitoring delays in loan           significantly and the net interest margin, one of the
     repayments is also being improved.                      highest in the market, improved further, due to,
        A third step towards strengthening our position      inter alia, our increased presence in retail banking.
     in retail banking is the establishment of Emporiki      In the future, we will continue to tap these sources
     Credicom, a model consumer credit company.              of recurring revenue.
     Emporiki Credicom, a company with equal
     participation by CBG and Sofinco, a Crédit Agricole     5.2 STRATEGIC ALLIANCE WITH THE LARGEST
     subsidiary, will commence operations in the             FRENCH BANK
     summer of 2003, providing consumer credit
     services from points of sales, i.e. in direct contact      In 2000, Crédit Agricole (CA), the largest French
     with customers in shops selling consumer goods          bank, acquired 6.7% of the share capital of CBG. In
     (such as white goods, cars etc.) thus considerably      May 2002, CA increased its participation in the share
     simplifying the relevant procedures.                    capital of CBG by approximately 2.4%. Taking into
        In the last two years, CBG has taken important       account certain voting rights that CA has its stake in
     steps to strengthen its presence in retail banking.     CBG is approximately 11%. The most important
     At the end of 2002, loans to households (housing        outcome of this cooperation is its substantial
     and consumer lending) represented 27.6% of all          contribution to the development of the CBG Group.
     loans granted by the Bank, as against 24% in            The joint activities with CA in key areas of the
     December 2001 and 22% in December 2000. At the          financial    sector     (bancassurance,        asset
     end of 2002 loans to small and medium-sized             management, investment banking) are initiatives



26
that modernise the Group.                         the companies of the Group. The efforts are
                                                  already bearing fruit. In mutual funds and
5.3 EXPLOITATION OF SYNERGIES BETWEEN             bancassurance products, the intensification of the
GROUP SUBSIDIARIES                                activities of the Bank’s branch network resulted in
                                                  significant improvements. At the same time, the
   The unique corporate identity of the Group     cooperation of Commercial Leasing, Commercial
companies sends a clear message: we are part of   Factoring and the Investment Bank with the Bank’s
a single Group, sharing common visions and        Divisions is advancing at a satisfactory pace, and
goals. In the past year, we placed particular     the foundations have been laid for their further
emphasis on the promotion of synergies between    development.




                                                                                                        27
     6. Activities of the Commercial Bank Group




28
6.1 BANKING ACTIVITIES IN GREECE                       the provision of information to enterprises, through
   Enterprise financing                                the creation -in cooperation with Interex S.A.- of the
                                                       www.interex.gr web site, which is an information
   In 2002 Commercial Bank was successfully            platform for the international development of
active in the small and medium-sized enterprises       business. The main objectives for 2003 are the
(SMEs) market expanding significantly its client-      acceleration of the growth rate of credit and the
base, as well as improving the quality of its loan     attraction of 20,000 new customers.
portfolio. In order to achieve a more effective           In 2002 Commercial Bank continued to
penetration in the SMEs market, a number of            successfully provide services and products to
actions are being implemented, such as client          more than 600 large corporations and groups of
segmentation, implementation of a customised           companies. The Bank expanded its client-base
strategy for each specific client segment, and         and improved the quality of its loan portfolio.
simplification of the credit recommendation and        During 2002, the Bank commenced relationships
approval process and of operational procedures.        with 30 new corporations, whose credit balance
   In 2002, total loans to SMEs reached EUR 3,448      stood at EUR 60.6 million. At the same time, loans
million, reflecting an increase of around 22% in       to existing corporate clients with favourable
relation to 2001. At the same time, bad debts          prospects and a profitable relationship increased
declined for the second year in a row, and their       by EUR 150 million approximately. Moreover, loans
participation in total loans to SMEs was limited to    granted to corporations not fulfilling specific credit
low levels. In addition, in 2002 Commercial Bank       quality criteria were reduced by EUR 9.8 million. As
either organised or participated in more than 15       a result of all these developments, the increase in
syndicated loans to SMEs.                              credit financing stood at 15% on average,
   In 2002, the portfolio of products offered to       exceeding the amount of EUR 200 million.
SMEs was expanded with the addition of the ‘Easy          During 2002, Commercial Bank participated in
Business’ open business loan. In the second            22 new syndicated loans totalling EUR 139 million.
semester of the year, 1,911 open business loans        The Bank successfully organised 7 syndicated
were granted, with a total approved limit of EUR 60    loans in the total amount of EUR 168 million, in
million and a utilisation rate of 68%. Moreover, the   which it participated with EUR 41 million, and
Bank was designated, together with 28 other            collected EUR 635,000 in commissions.
banks, as a support vehicle for the actions under         Finally, the Bank continued its extensive
the 13 Regional Business Programmes (RBPs)             cooperation with its subsidiary banks in Germany,
concerning assistance to manufacturing and             Cyprus and the Balkan countries, as well as with
tourism SMEs under the Third Community Support         the London branch, while also promoting the
Framework CSF III. Emphasis was also placed on         activities of the other companies of the Group



                                                                                                                29
     (Factoring: 6 new relationships totalling EUR 15          The activities in the above areas helped achieve
     million, Leasing: 20 new relationships with total      the promotion of new services (organisation-
     disbursements of EUR 19 million, and Credit            administration of syndicated loans) and of the
     Insurance: 6 new relationships).                       activities of the other companies of the Group
        Commercial Bank continued to successfully           (leasing, insurance).
     provide its services to the construction and              In the market of Public Enterprises and
     projects sector. The Bank significantly increased      Organisations (DEKO) and Public Entities,
     its activities in this sector and strengthened its     Commercial Bank holds a leading position, in spite
     position in the market as a result of credit           of the highly competitive conditions prevailing. The
     expansion to existing relationships with the 100       Bank offers new innovative products and
     largest companies and the initiation of five new       cooperation      ‘packages’     in   response     to
     credit relationships. In particular, the average       developments in the individual markets, and
     balance of loans granted in 2002 reached EUR           successfully develops stable relationships.
     163.8 million registering a significant increase of       The outstanding balance of loans granted by
     35.2%, the balance of letters of guarantee stood at    Commercial Bank to Public Enterprises and
     EUR 449.7 million (an increase of 16.1%), and          Organisations and Public Entities grew by 29.5% in
     commissions stood at EUR 2.7 million (an increase      2002. In the past year, 41 new loans were granted,
     of 8.8%). As a rule, the Bank’s portfolio in the       as against 10 loans in 2001. In 2002, the Bank
     construction and projects sector consists of credit    cooperated with 54 Public Enterprises and
     to financially sound enterprises.                      Organisations and 220 Public Entities.
        In 2002, the Bank participated, in cooperation         In the health sector, where the Bank traditionally
     with other Greek and foreign banks, in syndicated      has had a strong presence, the Bank developed
     loans for the financing of large-scale projects such   relationships with 5 out of the 11 Regional
     as Via Attica and the Rion-Antirion Bridge,            Healthcare Systems (PESY) which in the past year
     constructed using the Build, Operate and Transfer      announced tenders for entering into cooperation
     (BOT) system. In addition, the Bank finances the       with banks. The Bank also cooperates with 38
     construction of various other projects (Electric       healthcare institutions providing supplier payment
     Energy Production Unit and Hot Water Distribution      services. In the municipal government sector, the
     Network (co-production) in Serres, marina projects     Bank    developed         cooperation    with   131
     in Lefkas, Skiathos and Samos, shopping centres,       municipalities in 2002.
     office complexes, residential complexes and               Despite fluctuations in the international shipping
     leisure parks), and also participates in the           market, in 2002 Commercial Bank strengthened its
     financing of projects abroad (Northern Auxiliary       presence in the shipping sector, developed new
     Motorway in Birmingham, England).                      customer relationships, expanded its cooperation



30
with existing customers who fulfilled specific credit    composite investment products and on the provision
quality criteria, improved the quality of the services   of financial planning services to customers seeking
it provided and further proceeded with the               alternative investment options and professional
improvement of its loan portfolio.                       management services for their portfolios. At the
   New financing by the Bank increased by 45.6%,         same time, the creation of product ‘packages’,
while at the same time it developed cooperation          tailored to the needs of the various customer
with other banks for the joint participation in          segments, the modernisation of the branch platform
syndicated     loans.    Ocean-going       shipping      and the re-engineering of procedures were also
accounted for the main source of the increase in         continued. Key elements in the re-engineering
activities and the development of new customer           process are the centralisation of procedures and
relationships during 2002. Ocean-going shipping          services and improved credit risk management.
accounts for around 60% of the total portfolio. Of          At the end of 2002, the total amount of the
the total ocean-going ships financed, 23% are new        Commercial Bank loan portfolio to retail customers
constructions which have absorbed 43% of the             amounted to EUR 2,740.2 million, recording an
loans to ocean-going shipping. The new                   increase of 34.7% compared to the end of 2001, while
cooperation agreements in ocean-going shipping           the number of loans increased by 12.9%. A total of
mainly concerned the financing of new ship               121,500 new loans were granted during 2002, with
building and the purchase of relatively new ships        disbursements amounting to EUR 1,037.7 million (an
(in terms of age). In coastal shipping, 25% of the       increase of 28.6% compared to the previous year).
financed ships are relatively new (1 to 4 years old)        During 2002, the results of Commercial Bank
and of new technology, absorbing around 25% of           activities in the housing credit sector were positive,
the financing directed to coastal shipping.              with the Bank further increasing its market share.
                                                         The outstanding balance of housing loans
   Financing of retail customers                         increased by 37.5%, while the number of loans
                                                         increased by 25.5%. A total of 16,500 new housing
   In 2002 Commercial Bank once again had a              loans were granted during 2002.
significant presence in the retail customers market         In the area of consumer credit, the Bank
offering its customers a wide variety of competitive     intensively continued its activities, and increased its
banking products, as well as products of the             market share. In particular, during 2002 60,000 new
companies of the Group. The new strategy which           consumer and personal loans were granted, the
has been adopted focuses on improving customer           outstanding balance of which increased by 36.5%.
service and strengthening the relationships between         Commercial Bank will strengthen its presence in
the customers and the Bank. In this context, special     the   consumer       credit    area    through     the
emphasis was placed on the development of                commencement of the operation of a new subsidiary



                                                                                                                   31
     company, Emporiki Credicom. The new company,                 Business’ open business loan granted by the
     with a share capital of EUR 17.3 million equally held        Bank, the Bank issues the Easy Business card.
     by Commercial Bank and Sofinco, a consumer credit               A total of 45,000 credit cards were issued during
     subsidiary of Crédit Agricole, will commence                 2002, thus increasing the number of credit cards by
     operations in June 2003. The company will develop            10.6%. With the objective of strengthening its
     consumer credit activities, initially through                position in the market for credit cards, the Bank
     commercial associates (long channel). Sofinco will           implemented a promotional plan during the previous
     make the know-how available on risk management               year for celebrating the 30th anniversary of
     and EDP support issues thus providing the company            Emporokarta, and supplied the Visa Electron card to
     with a significant comparative advantage. Emporiki           new Telebank Debit customers and the Mastercard
     Credicom will offer consumer loans, credit cards,            to existing customers of the Telebank card.
     consumer factoring and, at a second stage, personal             The network of businesses cooperating with
     loans and insurance products. The company will not           Commercial Bank expanded in 2002, through the
     operate its own points of sale, but instead will offer its   installation of 5,686 new Points-of-Sale (POS)
     products through commercial associates, who will be          terminals owned by Commercial Bank. The total
     approached by the company’s organised sales force            number of POS terminals serving the Bank amounts
     network. The Bank’s network will be used for                 to 27,583, of which 23,115 are owned by the Bank.
     handling customer payments. This method of                   Commercial Bank is cooperating with 136,138
     operation is expected on the one hand to increase            businesses, having developed new relationships
     the Group’s share in the consumer credit market,             with 3,540 additional businesses in 2002.
     and on the other hand to reinforce cross-selling.            Furthermore, in December 2002 POS terminals were
        During 2002 the Bank intensified its activities in        installed capable of serving chip cards -the very first
     the credit card market. Commercial Bank issues               ones to be installed in Greece for Visa cards.
     the following credit cards: Emporokarta, Visa, Visa
     Gold, Visa Electron, Mastercard and Telebank                    Treasury management
     Credit. In cooperation with commercial businesses,
     the Bank issues the Visa Antenna, Visa Audi, Visa               During 2002, Commercial Bank once again had a
     VW, Emporokarta Skoda Club, Emporokarta Firen,               significant presence in the domestic and
     Emporokarta Serfin and Emporokarta Metrolife                 international bond, money and foreign exchange
     credit cards. In addition, the Bank issues the               markets. Following a flexible approach and strategy,
     corporate cards Emporokarta Business Visa and                the Bank expanded the range of derivatives and
     Emporokarta         Business,       which     facilitate     composite products offered, whilst it developed its
     transactions, as well as the Telebank Debit Maestro          activities in both the domestic and the international
     debit card. Finally, in the context of the ‘Easy             markets, achieving a satisfactory spread which



32
contributed to the overall profitability of the Bank.    procedures and tools for managing the operational
   The Bank actively participated in the Electronic      risk of its information system. The completion of
Secondary Securities Market (HDAT), in the               this project will strengthen the Bank’s business
interbank foreign exchange market, and as a              operations and its credibility in the market.
market maker in the European Interbank Market of            In the area of central EDP systems, in 2002 the
EONIA Swaps. The Bank also took an active part in        Bank continued to invest in the upgrading and
the public auctions conducted by the Ministry of         adaptation of these systems to the new conditions
Finance. In particular, during 2002 the Bank             that are developing due to the increase in the volume
undertook underwriting services as Joint Lead            of operations across all products and services sales
Manager for one public issue, and acted as Co-           networks and to the diffusion of information and
Lead Manager for all other public issues.                communication both within and outside the
Furthermore, in 2002 the establishment of the            organisation. In this context, the operating system of
infrastructure for the installation and operation of     the central computer systems was upgraded, while
the EUROMTS system (for the trading of Euro-zone         the capacity and functionality of the storage units of
government bonds) and of the electronic trading          the central system were also upgraded, ensuring
system for derivatives took place.                       efficiency in the availability of data. The
                                                         telecommunications network of the Bank was
   Technological and operational modernisation           upgraded with higher speeds for the transfer of data
                                                         to all points of sale, providing increased capabilities
   Information systems are becoming increasingly         for supporting the operation of Web-based
important for developing, managing and selling           applications, Internet usage and electronic mail.
banking products and services, as well as for               The increasing demand by customers for
supporting the operation of banks. The constantly        alternative sales channels for the promotion of
increasing volume of transactions, the newly             products and services beyond the traditional bank
automated processing techniques and the                  branch led to the redesign and enrichment of services
intensified communication between systems,               in the electronic business (e-business) sector. By
render dependence on information technology an           redesigning the architecture of the e-banking system
increasingly critical parameter. Managing the            and using state-of-the-art technologies, the Bank now
existing particularly complex technological              has available a new, uniform e-business support
environment and its future development,                  platform which serves all existing (IVR and Internet
constitutes one of the most critical factors affecting   Banking) channels for the promotion of products and
competition in the banking market.                       services, as well as the new alternative channels being
   In 2002, Commercial Bank launched the                 planned, such as mobile banking.
reorganisation and standardisation of the                   Furthermore, in the context of upgrading both



                                                                                                                   33
     the services provided to its customers and the                operations, improve productivity, speed up the
     security of these services, Commercial Bank                   performance of procedures and reinforce the
     provided POS terminals capable of recognising                 efforts in reducing operating costs.
     and processing Smart Cards to its customers,                     However, there are inherent risks involved in
     becoming the first bank in Greece to conduct                  using information systems and exploiting their new,
     transactions fulfilling the security requirements and         expanded capabilities. Commercial Bank considers
     standards of the Visa, MasterCard and EuroCard                that the support of its presence in the market and of
     international organisations.                                  the services it offers to its customers, through an
        Keeping in mind the ever-changing competitive              adequate, efficient and reliable information security
     environment in which financial organisations                  system, is of vital importance. In this direction, and
     operate and the need to immediately respond to                through a multitude of projects concerning the
     business challenges and requirements, the ‘IT                 issue of information security from a variety of
     Application Architecture’ project was completed in            perspectives, the Bank successfully proceeded with
     2002, in cooperation with the Gartner international           the remodelling of the existing information security
     consulting firm. The aim of this effort was on the            framework. The security framework developed
     one hand to study the existing systems and                    provides the necessary foundations on which to
     applications and their capability of responding to            base the modernisation of the Bank and the
     current and future business requirements, and on              adaptation of new technologies to the infrastructure
     the other hand to develop an IT application                   already in place. The Bank proceeded to implement
     architecture capable of ensuring the required                 information security projects which concern its
     integration and interoperability across current and           internal operating environment, while it has already
     future systems and applications.                              started on the implementation of a corporate
        ‘Application Integration’ was one of the projects          security policy, as well as the development of the
     launched in 2002, in the context of ‘IT Application           disaster recovery plan for its systems.
     Architecture’. The aim of this project, which will continue      Starting with the Bank’s network perimeter
     during 2003, is to ensure the automated                       security and using the latest network protection
     interconnection of heterogeneous applications and             technologies as well as establishing appropriate
     databases and the automation of business procedures.          security procedures, the Bank became capable of
        The decision taken by the Bank to adopt an                 penetrating into new business areas, relying on an
     Enterprise Resource Planning (ERP) solution for all           effective and reliable information security system.
     non-banking applications, will start being                    In particular, in the context of planning and
     implemented in specified areas of the new system.             implementing the Extranet security infrastructure, a
     This approach will help achieve a more efficient              model was specified for interconnecting the Bank’s
     management of administrative and support                      intranet with the Group subsidiaries, and a suitable



34
security framework was defined, which every                reduce their operating costs.
subsidiary becoming part of the Extranet should               In the context of the modernisation of its
comply with. The development of the Extranet               applications, the Bank has already embarked on
security infrastructure provides the Group                 the development of a new application for business
subsidiaries with the opportunity to connect to the        loans. The application, which is being developed
Bank’s network. Through its extensive branch               on the SIGLO platform and will be completed in
network, the Bank is now able to offer a wide              2003, is expected to contribute to the more
variety of products beyond traditional ones                effective promotion of the Bank’s loan products
developed by the Group subsidiaries. The first             and to the more efficient management of its loan
interconnection to take place in this context was          portfolio. The design for the creation of a single
with Emporiki Life, leading to the provision of            Data Warehouse will also be completed in 2003,
bancassurance products by Commercial Bank’s                and will support, in a more efficient manner, the
branches. Within 2003, this practice will be               decision-making process concerning management
extended to the other Group subsidiaries.                  of the Bank’s customers and identification and
   Moreover,     the   project      concerning      the    coverage of specific needs of individual client
development      of    an   appropriate         security   groups in a more efficient way.
organisational     framework        for   the    Bank’s
interconnection to the Internet was completed,                Customer service networks
enabling the development of the policy, procedures,
standards, roles and responsibilities that are                Commercial Bank is modernising the operation of
necessary elements for controlling, managing and           its network, continuously upgrading its services and
securely operating the Bank’s interconnection to the       developing new methods for distributing its products,
Internet. At the same time, the project concerning         with the goal of providing better services to its clients.
the secure connection of the Bank’s intranet with the         The organisational structure of the branch
Internet was also completed. Its implementation            network reflects the customer-focused orientation
involved security mechanisms both for the                  of Commercial Bank, and comprises three types of
protection of the corporate network against Internet-      branches, depending on the range of products
based risks and for the control and security of Bank       provided to enterprises and retail customers: full-
personnel access to the Internet.                          service branch (KPE), SMEs and retail customers
   Successful completion of the above projects             branch (KMEI), and branches focusing on retail
provides the Bank with the opportunity to proceed,         customers (KEI).
in 2003, with the implementation of important                 During 2002, the Bank expanded its presence in
projects that will help increase the value-added of        new markets by creating new units. In particular, 5
its information systems and, at the same time,             new branches were created, with 33 new ATMs



                                                                                                                        35
     and 12 new KIOSKS being added in selected                themselves with alternative channels, a monthly
     locations across the country. At the end of 2002,        newsletter is now being issued, containing
     the branch network of the Bank comprised 373             statistics and news on developments in this area,
     branches, 611 ATMs, 21 AEMs, 12 foreign                  so that a uniform perception and knowledge of the
     exchange bureaux and 82 KIOSKS, of which 7 are           potential existing throughout the entire range of the
     fully ready to operate as foreign exchange bureaux,      Commercial Bank Group activities is developed.
     since, in addition to ATMs, they have been outfitted        Efforts being made under the ‘Pegasus’
     with employee work posts. In addition, the Bank          programme have boosted significantly the upgrading
     operates one branch in London (United Kingdom)           and expansion of services offered throughout the
     and one Off-Shore Unit (International Banking Unit)      existing alternative sales channels. The key aims of
     in Cyprus. Four new branches are scheduled to            the programme with respect to alternative channels
     start operating during the first semester of 2003.       are: a multi-channel and customer-focused approach
        In addition to its wide and well-established          for the promotion of ‘off-counter’ banking; the
     network of branches located throughout the country,      promotion of phone banking to the Bank’s
     Commercial Bank also has a significant and               customers for the first time using the upgraded
     increasing presence in the area of alternative sales     BANKTEL service; the simplification of procedures
     channels, where it has laid down the foundations for     and Network decongestion; the definition of the new,
     developing new services responding to the needs          distinct corporate identity for alternative channels;
     and expectations of its clients. At the end of 2002,     the space planning arrangements for alternative
     the Internet Banking Services of Commercial Bank         channels in the branches.
     had over 65,000 registered users, as against 3,500          Within the first semester of 2003, a series of new
     at the beginning of the year. Moreover, the variety of   services    and   products,     adapted     to   the
     high-value e-banking services offered was enriched       requirements of the clients being served through
     with services such as payments to third parties and      alternative sales channels, is expected to be
     other transactions, with the aim of further expanding    added, in order to support the Bank’s efforts for
     the customer base.                                       further growth in the retail banking market.
        At the same time, the new Corporate Portal has        Moreover, the new Internet Banking Services
     also been completed, reflecting efforts for a new,       application, which makes use of many Crédit
     modern, people-focused organisation with the             Agricole standards, will be presented. The Bank’s
     capability for a segmented and focused approach.         objectives for 2003 also include the creation of an
     The new Corporate Portal became accessible to the        integrated Call Centre for phone banking. In this
     public at the URL address http://www.emporiki.gr         area, the cooperation with Crédit Agricole has
     as of early April 2003.                                  already shown significant results in terms of know-
        In order for Bank officers to familiarise             how transfer. Tele-messaging services (SMS) are



36
also expected to be launched during this year, in          offer a wide range of high quality banking products
the context of the development of services in the          and services. Their strategy focuses on attracting
mobile telephony channel.                                  business from foreign and financially sound domestic
                                                           enterprises, supporting medium-sized and large
6.2 PRESENCE ABROAD                                        enterprises of Greek interests, expanding retail
                                                           banking activities and developing parallel activities.
   Commercial Bank is active outside Greece,                  In the wider region of the Balkans and
through subsidiary banks in eight countries, one           Southeastern Europe, the subsidiary banks of
Off-Shore Unit (International Banking Unit) in             Commercial Bank have financed enterprises mainly in
Cyprus, and one branch in the international                the sectors of trade, manufacturing and construction,
financial centre of London. The Bank is present in         but also in telecommunications, energy and transport.
the wider Balkan and Southeastern Europe region            In 2003, the Bank plans to expand the business
through the following six subsidiary banks:                activities of its subsidiaries through new branches
Commercial Bank of Greece (Albania) S.A. in                placing a greater emphasis on retail banking.
Albania, with 1 branch; Commercial Bank of Greece
(Armenia) C.J.S.C. in Armenia, with 1 branch;              6.3 HUMAN RESOURCES
Commercial Bank of Greece (Bulgaria) A.D. in
Bulgaria, with 7 branches; Commercial Bank of                 On 31.12.2002, the human resources of
Greece (Georgia) S.A. in Georgia, with 1 branch;           Commercial Bank numbered 6,898 persons, as
Commercial Bank of Greece (Romania) S.A. in                against 6,912 persons on 31.12.2001. Employees
Romania, with 1 branch; and Commercial Bank of             working in the branch network represent 69.4% of all
Greece (Cyprus) Ltd. in Cyprus, with 5 branches.           Bank employees. For the Group, human resources
Commercial Bank withdrew from Moldova, and the             on 31.12.2002 numbered 7,679 employees, as
International Commercial Bank of Moldova is                against 7,604 employees on 31.12.2001.
presently under liquidation. Commercial Bank is               During 2002, the Bank hired 280 new employees,
also present in Germany, through its subsidiary            of which 103 were post-graduate degree holders
Commercial Bank of Greece (Germany) GmbH,                  and 79 were higher education and university
which operates 6 branches.                                 graduates. During 2002, 294 employees left the
   In 2002 the Bank strengthened its presence abroad       organisation, of which 113 benefited from special
by significantly increasing its activities. A new branch   voluntary retirement incentives in the context of the
was opened in Bulgaria. Share capital increases            implementation of the Bank’s policy of renewing its
amounting to USD 2.8 million in total also took place in   personnel and freeing managerial positions.
the Albanian and Georgian subsidiary banks.                   The Bank places a great emphasis on vocational
   The subsidiary banks of Commercial Bank abroad          training and the further education of its personnel. A



                                                                                                                    37
     variety of training programmes provides the personnel        office and psychosocial support station, payment of
     with the opportunity to receive training on specialised      allowances and additional leave benefits, various
     banking operations subjects and on new technologies          forms of financial assistance, loans with favourable
     and products enabling them to respond in an effective        conditions, benefits for children of employees etc.,
     manner to the changes constantly occurring in the            are elements that demonstrate that the Bank
     banking sector. Moreover, through the two-year               continually supports its personnel in the face of
     further education programme on banking and modern            modern living conditions and needs.
     financial practices, carried out by the Bank’s                  Furthermore, Commercial Bank actively participates
     subsidiary company ‘Banking Development and                  in social developments and allocates significant sums
     Research S.A.’ - Open Study Workshop (abbreviated            of money to sponsorships and donations, contributing
     to STEP after the Greek initials), a significant number      to the cultural evolution of our country. During 2002,
     of Group employees acquire knowledge on                      the Bank again offered substantial support to efforts
     specialised financial areas. Furthermore, a large            and initiatives in art, sports, sciences and publications.
     number of further education seminars take place in           Special emphasis has been given to culture, focusing
     the Bank’s certified training centre. In 2002, seminars      on the preservation of monuments of Greek heritage
     were attended by a total of 4,339 employees. In              and tradition. In 2002, financial assistance to theatrical
     addition, implementation of programmes based on              and musical groups, exhibitions, cultural centres,
     distance learning, subsidisation of tuition fees for post-   museums, universities, sports clubs, social solidarity
     graduate studies of Bank officers in Greece and              associations and other entities exceeded EUR 350,000.
     abroad, and subsidisation of tuition fees for learning
     foreign languages also continued in 2002.                    6.5 OTHER GROUP ACTIVITIES
                                                                     ñ Leasing-Factoring
     6.4 SOCIAL CONTRIBUTION OF COMMERCIAL BANK
                                                                     Modern financing tools such as leasing and
        The social role of Commercial Bank is multisided          factoring are used progressively more in the Greek
     and is demonstrated through the various benefits             market. Commercial Bank of Greece is active in both
     provided to its personnel, as well as through its            sectors, through its subsidiaries Commercial Leasing,
     multi-faceted contribution to society at large.              Commercial Rent and Commercial Factoring.
        Recognising the decisive contribution of its                 Commercial Leasing S.A. was established in
     human resources in achieving its objectives, the             1989 and is wholly owned by CBG since 1993. The
     Bank has adopted a systematic policy for                     company provides leasing services to customers in
     supporting employees and their families with a               all business sectors and professional activities,
     variety of special benefits. In particular, operation of     distributing its products through the Bank’s branch
     a blood donation centre, gym, medical consulting             network and through associated suppliers. The



38
company had a successful year, given that its pre-                  December 2002 amounted to EUR 6 million. The
tax profits for 2002 increased by about 80%,                        main shareholders are CBG (51%), KARENTA S.A.
reaching EUR 4.9 million as against EUR 2.7                         (24.5%) and P.J. Condellis Industrial and
million in 2001. During 2002, the company signed                    Commercial S.A. (24.5%). The company provides
new contracts totalling EUR 124.2 million, showing                  services to businesses of any legal form and to
an increase of around 7% from the previous year.                    professionals, and as of 2002 also to private
Company turnover in 2002 reached EUR 82.6                           individuals. The product is distributed through the
million as against EUR 77.0 million in 2001. For                    networks of the company’s shareholders, as well as
2003, the company aims to attract new customers,                    directly by the company itself. In 2002, the company
in order to increase its profitability and its share, in            almost doubled its fleet and more than doubled its
the leasing market, to 9%. In order to achieve these                market share, from 0.75% in 2001 to over 1.5% in
targets, the company will draw on the clientele of                  2002. The high quality of the company’s services
the Bank and will also develop direct sales                         was certified by the South Germany TUV Certification
activities. Recent changes in the legislative                       Agency, which awarded the ISO/9001/2000
framework regarding exemption of the tax on the                     certificate to Commercial Rent despite the very
transfer of real estate property in the cases of sale               recent entry of the company in the market.
                                                                        The company’s target for 2003 is to further
               Commercial Leasing S.A.
                Key figures on 31.12.20021
                                                                        Commercial Car Rent and Leasing S.A.
                      (in EUR million )
                                                                                     Key figures on 31.12.2002
Total assets                                            258.3
                                                                                          (in EUR million )
Share capital                                            49.9
                                                                     Total assets                                             24.6
Shareholders’ equity                                     60.1
                                                                     Share capital                                             6.0
Profits before tax                                         4.9
                                                                     Shareholders’ equity                                      5.1
Direct & Indirect Bank participation (%)                100.0
                                                                     Profits before tax                                       -0.7
Number of employees                                        50
                                                                     Direct & Indirect Bank participation (%)                 51.0
                                                                     Number of employees                                        19
and leaseback, is expected to have a positive
impact on the company’s activities.                                 increase its market share, by exploiting the networks
   CBG is active in the area of long-term leasing of                of its shareholders, to develop synergies with other
passenger cars through Commercial Rent S.A..                        subsidiaries of the Group, to launch new products
Commercial Rent was established in December 2000                    and services and to continuously train its personnel.
and the company’s share capital, following the                          In factoring, the Group is active through
increase that took place in August 2002, at the end of              Commercial Factoring S.A., established in 1994. Its

    1 In the tables with the key figures of Group companies, the data refer to each subsidiary company as a whole and not to the
part that corresponds to the Group’s participation in it. In addition, the "Number of employees" figures refer to the number employed
in each company, regardless of whether some employees are seconded from the Bank.




                                                                                                                                        39
                Commercial Factoring S.A.                          ñ Investment Banking
                     Key figures on 31.12.2002
                          (in EUR million)                         CBG is active in investment banking through the
     Total assets                                     162.1
                                                                Investment Bank SA. The direct and indirect
     Share capital                                     13.2
     Shareholders’ equity                              17.0     participation of CBG in the Investment Bank

     Profits before tax                                 1.9     amounts to 97.9%, while Crédit Agricole Indosuez
     Direct & Indirect Bank participation (%)         100.0     (CAI), the investment bank of Crédit Agricole,
     Number of employees                                 50
                                                                participates in the company with an interest of 1.9%.

     shareholders are CBG (99%) and the Commercial                 The Investment Bank is made up of 5 divisions:

     Capital Group (1%).                                        Brokerage Division, Corporate Finance Division,

        The main products of the company are domestic           Structured Finance Division, Private Banking

     factoring, with or without right of recourse, export       Division and Fixed Income Division.

     factoring, with or without right of recourse, import          The adverse conditions in the stock market and

     factoring, pre-payment of invoices and non-financial       the uncertainty that prevailed in 2002 affected the

     factoring. The products are distributed through the        activities of the Brokerage Division, which

     Bank’s branch network as well as through direct sales.     nevertheless continued to be ranked 9th in the

     In 2002, the company was ranked 2nd in the sector,         market and became class A market maker in the

     with a market share of over 15%, registering a slight      Athens Derivatives Exchange. The Division is

     increase in its share compared to 2001. The                currently setting up the procedures for expanding

     profitability of Commercial Factoring improved in          into international stock markets and derivatives

     2002; the company’s pre-tax profits for 2002               exchanges and will be offering the new services to

     amounted to EUR 1.9 million, an increase of over 54%       its customers soon.

     compared to 2001. For 2003, the company has set as            In 2002, the total funds raised through the

     its main targets to attract new customers and to further   offering of shares and corporate bonds by means

     improve its profitability. In order to achieve these       of initial public offerings and share capital

     targets, the company will exploit the Bank’s Network       increases in the Athens Stock Exchange (ASE)

     and the opportunities for synergies with other Group       registered an annual reduction of 15%. This

     companies. The company will also undertake a               negative conjuncture also affected the Corporate

     higher-visibility market promotion both of factoring as    Finance Division of the Investment Bank, which

     an established tool and of the company itself. It will     nevertheless played an active role in this limited

     also offer specialised products to sectoral markets and    market. The Investment Bank participated as lead

     will introduce performance incentives for its              underwriter or underwriter in 13 out of a total of 20

     employees. The new information technology system           public offerings that took place during 2002, and

     of the company will support these efforts.                 secured a market share (in terms of underwriting



40
figures) of nearly 7.8%. At the same time, the                         Division provides investment services and products
Corporate Finance Division provided, in                                to CBG and Investment Bank customers. Moreover,
cooperation with CAI, advisory services on matters                     through the Fixed Income Division, the Investment
of acquisitions, mergers, privatisations and                           Bank was active as sub-underwriter in bond issues
securitisations to a number of companies in the                        and in cooperation with CAI aims at participating in
private sector and to the Greek State.                                 other bond issues as lead underwriter.
   In 2002, the Structured Finance Division of the                         In 2002 the Investment Bank registered losses of
Investment Bank strengthened the presence of the                       EUR 65.5 million. This result reflects the write-off of
Group in the area of project finance. The Investment                   goodwill, amounting to EUR 60 million, resulting
Bank, jointly with CAI, undertook the financing of the                 from the merger by absorption of the two securities
Thessaloniki metro and provided advisory services                      firms of the Group. In contrast, the company’s
for a private-sector power plant in Thessaloniki. In                   operational profits2 reached EUR 509,000.
cooperation with other Greek and foreign banks, the                        The Investment Bank aims to become the top
Investment Bank is participating in syndicated                         investment bank in the Greek market by providing
financing arrangements for large-scale projects                        new products and high-quality services. Advantages
implemented using the Build, Operate and Trasfer                       to achieving this goal are the Investment Bank’s
(BOT) method (Attiki Odos, Rion-Antirion Bridge).                      flexible structure, its highly qualified personnel, the
The Bank also participates in project financing                        experience and clientele of CBG and the know-how
abroad and holds a leading position in the financing                   of CAI.
of smaller-scale projects, such as marinas, wind mils
and entertainment centres.                                                 ñ Asset Management
   The transfer of private banking activities from
CBG to the Private Banking Division of the                                 In the area of mutual funds, CBG is active
Investment Bank was completed during 2002. In                          through Ermis Mutual Funds Management S.A.
cooperation with CBG and CAI, the Private Banking                      (Ermis AEDAK), the first company in this area in

                Investment Bank S.A.                                        Ermis Mutual Funds Management S.A.
                Key figures on 31.12.2002                                               Key figures on 31.12.2002
                      (in EUR million)                                                         (in EUR million)
Total assets                                              105.9         Total assets                                           34.7
Share capital                                             152.5         Share capital                                          0.15
Shareholders’ equity                                        83.9        Shareholders’ equity                                   23.4
Profits before tax                                         -65.5        Profits before tax                                      1.7
Direct & Indirect Bank participation (%)                    97.9        Direct & Indirect Bank participation (%)               71.7
Number of employees                                          120        Number of employees                                     35


   2. Operational profits are defined as the difference between gross operating results and general administrative expenses.




                                                                                                                                      41
     Greece in 1972. Direct participation by the Bank in       insurance company’s network, will also continue.
     the share capital of the company on the 31st              In parallel, the company is cooperating with CAAM
     December 2002 was 26.7%, the other shareholders           for the creation of new products during 2003.
     being the Commercial Capital Group (45%), Crédit              In the field of institutional asset management CBG
     Agricole Asset Management (CAAM)(20%) and                 is active through Emporiki Asset Management SA a
     other third parties holding the remaining 8.3%.           joint venture with Crédit Agricole Asset Management
        The year 2002 was a difficult year for mutual fund     (CAAM). The new company started operations in
     management companies due to the adverse                   October 2001 with a share capital of EUR 3 million in
     conditions and the increased uncertainty in capital       which CBG participates with a stake of 80% and
     and money markets. The value of the assets                CAAM participates with a stake of 20%. The
     managed by mutual funds decreased by 5.3% in              company already has a significant presence in the
     2002 compared to the end of 2001 and amounted to          market and at the end of 2002 it had over EUR 100
     EUR 25.4 billion compared to EUR 26.8 billion at the      million under management on behalf of pension
     end of 2001. Ermis AEDAK also recorded a similar          funds, of both the private and the public sector, and
     decrease in the funds under its management. At the        on behalf of Group subsidiaries. The company is
     end of 2002 Ermis AEDAK managed EUR 1,861.6               also active in fund management consultancy
     million in 10 mutual funds. Due to the decline in         exploiting the specialized knowledge of its
     share prices, Ermis AEDAK focused on the                  personnel, the know-how of CAAM and its own
     promotion of fixed-income mutual funds (bonds and         research and analysis department. Emporiki Asset
     money market funds) that accounted for around             Management has established contacts with a
     80% of the total funds under management. In 2002 a        number of funds and is expecting their decisions on
     significant effort was made, both through special         offers it has made. The company aims to have an
     staff training programs and through the adoption of       amount of EUR 600 million of funds under
     performance incentives, to exploit the Bank’s branch      management by the end of 2003.
     network in order to increase sales. This effort yielded
     results and the company’s pre-tax profits for 2002                Emporiki Asset Management S.A.
                                                                               Key figures on 31.12.2002
     registered an increase by around 13% as against
                                                                                    (in EUR million)(*)
     2001.
                                                               Total assets                                               1.7
        For 2003, Ermis AEDAK will intensify its efforts       Share capital                                              3.0
     for the exploitation of the Network, while synergies      Shareholders’ equity                                       1.2
                                                               Profits before tax                                        -1.8
     with Emporiki Asset Management regarding the
                                                               Direct & Indirect Bank participation (%)                  80.0
     promotion of mutual funds sales to insurance
                                                               Number of employees                                         21
     funds, as well as with PHOENIX METROLIFE
                                                                  (*) The company filed its first financial accounts on the 31st
     EMPORIKI regarding the exploitation of the                December 2002 for a period exceeding 12 months.




42
   The Commercial Bank Group is active in securities      Greece, and one of the largest companies of the
portfolio management via Commercial Investment            sector in Southeast Europe with excellent
S.A. Commercial Investment S.A. was founded in            infrastructure, good contact networks and
1992 and is listed in the primary market of the Athens    organisation in the countries present.
Stock Exchange (ASE) since 1993. The CBG Group               Private equity/venture capital companies had a
holds 54.3% of the company’s share capital.               difficult year during 2002, due to continuing
   With assets of the order of EUR 84 million on 31       negative trends in capital markets. The conditions
December 2002, the company is ranked 7th in the           that prevailed in international stock markets did not
sector. Company results for 2002 were affected by         favour IPOs and, consequently, the opportunities
                                                          for profitable exits were limited. As a result of low
          Commercial Investment S.A.
                                                          liquidity the sector’s companies concentrated on
                Key figures on 31.12.2002
                     (in EUR million)                     already existing investments.
Total assets                                       84.0      In 2002, the Commercial Capital Group
Share capital                                     105.9
                                                          included two new investments, six supplementary
Shareholders’ equity                               83.6
Profits before tax                                  4.4           Commercial Capital Group S.A.
Direct & Indirect Bank participation (%)           54.3                    (Group)
Number of employees                                  5                    Key figures on 31.12.2002
                                                                               (in EUR million)
                                                          Total assets                                  162.1
developments in the capital market. The return on
                                                          Share capital                                  70.3
net   asset      value   for    the     company     was   Shareholders’ equity                          159.7
commensurate to the market’s base indices. For            Profits before tax                            -14.7
                                                          Direct & Indirect Bank participation (%)      100.0
2003 the key target is growth of the firm in order to
                                                          Number of employees                              70
be one of the largest and most profitable
companies in the sector.                                  investments regarding ventures that had taken
                                                          place in previous years, partial disinvestment in
   ñ Venture capital                                      four investments and one exit. By the end of 2002,
                                                          Commercial Capital had undertaken a total of 59
   The Commercial Bank’s investments in private           private equity investments. During 2002, despite
equity and venture capital are undertaken via the         the restructuring that took place Commercial
Commercial Capital Group SA. Commercial                   Capital registered losses of EUR 14.7 million due to
Capital invests both within and outside Greece,           the adverse climate in the markets. For 2003, the
through seven Greek and off shore Cypriot                 company will focus on sectors where it possesses
companies. Commercial Capital is the second               know-how and experience, such as consumer
largest private equity/venture capital company in         goods, light industrial goods and services.



                                                                                                                  43
        ñ Insurance                                           application was also completed permitting the
                                                              organisation of the customer list for the company’s
        In the insurance sector CBG is active through         life insurance products in order to improve the
     Phoenix Metrolife Emporiki and Emporiki Life.            promotion of company products. For 2003, the
        Phoenix Metrolife Emporiki SA is the result of the    target for the company is to increase premiums, to
     merger of the Group companies Phoenix and                improve their collection, to develop and apply
     Metrolife Emporiki. The operational merger of the two    uniform commission rules, integrate the company’s
     companies took place in 2002. The merger and             information technology systems and curtail
     restructuring costs of the new company, in               company operating costs.
     conjunction with the adverse conditions that prevailed      In parallel, as of 2002 the CBG Group is also
     globally regarding the insurance sector, resulted in     active in the bankassurance sector, through
     significant losses for the company in 2002.              Emporiki Life SA, a Group company in which the
        In order to improve its efficiency, the company       Bank and Predica, the life insurance company of
     adopted a voluntary exit scheme through which            Crédit Agricole, participate with a share of 50% each.
     around 125 employees departed. During 2002 the           Predica is a leader in the French bancassurance
                                                              sector and possesses significant international
             Phoenix Metrolife Emporiki S.A.
                                                              experience in this area. Predica participates actively
                     Key figures on 31.12.2002
                          (in EUR million)                    in the Management of the company as well as in the
     Total assets                                   541.0     transfer of know-how on product design and sales,
     Share capital                                   63.4     and in personnel training.
     Shareholders’ equity                            37.3
                                                                 Emporiki Life began its operation by selling its
     Profits before tax                              -34.9
     Direct & Indirect Bank participation (%)        83.2
                                                              initial line of four products; two savings products

     Number of employees                              695     (Smile Pension and Smile Child) and two term life
                                                              products (Smile Family and Housing Loans
     company also redesigned its traditional life             Insurance) through the Bank Network. By the end
     insurance products and added new, modern                 of 2002 these products were offered by more than
     products (Life-long Pension, Pension 3% Minimum          100 Bank branches across the country, while by
     Guarantee, Mega Housing Plus). At the same time,         mid-March 2003 they were distributed through
     in order to improve car insurance services and to        approximately 175 branches.
     ensure greater control over claims paid, the                The demand for Emporiki Life products was
     company established the Car Damage Service               very high and the initial contract targets set by the
     Centre. This centre already successfully deals with      company were exceeded by far. For 2003, the
     car insurance claims in the prefecture of Attica. The    company aims to cover the entire Bank Network,
     Customer Relationship Management (CRM)                   expand the range of products offered and



44
penetrate new markets, such as the market of                        approximately. The company is also part of a joint
SMEs. The company’s successful performance up                       venture – together with the companies Athena and
to now and the high demand for bancassurance                        Metropolitan Parking – which was short-listed in the
products in a market with considerable margin for                   tender for the construction, financing and
growth, enhance the company’s positive                              management of 2 underground parking stations in
prospects.                                                          Athens. The total amount of the investment is EUR
                                                                    11 million. The company is also in charge of the
    Emporiki Life Insurance Company S.A.                            real estate needs of the Group. Company targets
                Key figures on 31.12.2002
                                                                    for   2003      include       the    development           and
                     (in EUR million)(*)
                                                                    management of real estate investment products.
Total assets                                               9.0
Share capital                                             10.0
                                                                               Commercial Real Estate S.A.
Shareholders’ equity                                       7.8
                                                                                    Key figures on 31.12.2002
Profits before tax                                        -2.2
                                                                                         (in EUR million)(*)
Direct & Indirect Bank participation (%)                  50.0
                                                                    Total assets                                              60.8
Number of employees                                         11
                                                                    Share capital                                             58.7
   (*) The company filed its first financial accounts on the 31st   Shareholders’ equity                                      60.5
December 2002 for a period exceeding 12 months.
                                                                    Profits before tax                                         2.1
                                                                    Direct & Indirect Bank participation (%)                100.0
   ñ Real estate development and management                         Number of employees                                         17

                                                                       (*) The company filed its first financial accounts on the 31st
                                                                    December 2002 for a period exceeding 12 months.
   The Commercial Bank Group is active in real
estate development and management through
Commercial Real Estate S.A. The company was
established in June 2001 and the direct
participation of the Bank is 100%. The company is
active in the primary market through its
participation in real estate development, and in the
secondary market through the provision of
advisory services on real estate portfolio
management. During 2002, Commercial Real
Estate participates in a joint venture – together with
the companies Empedos, Kyriakoulis, Promitheas
Gas and Athena – which is responsible for the
development of the Zea Marina for 40 years. The
total amount of the investment is EUR 10.5 million



                                                                                                                                        45
     7. Risk Management




46
   The globalisation of markets has opened up                         1. Equities Portfolio: 5-day VaR diagram
                                                             15000                  (in EUR 000)
new opportunities for the development of banking
business over the last years, while technological
progress has contributed to the substantial
                                                             12000
speeding up of information transmission within a
unified financial area, resulting in the need for the
systematic monitoring and assessment of risk.                  9000

   Commercial Bank has placed particular
emphasis on the development and operation of
modern risk management systems aiming to                       6000
                                                                    7  7  7  8  8  9  9  0  0  1  1  2  2   2
                                                                  /0 /0 /0 /0 /0 /0 /0 /1 /1 /1 /1 /1 /1 /1
efficiently cover/counterbalance the risks arising              01 15 29 12 26 09 23 07 21 04 18 02 16 30

                                                           Graph 1. 5-day VaR diagram for the Equities Portfolio (confidence
from its business activities. The Bank is developing       interval: 99%) during the second semester of 2002

these systems taking into account the proposals                  2. Foreign Currency Portfolio: 5-day VaR diagram
                                                               100                 (in EUR 000)
which are being formulated in the context of the
revision of the Banking Supervision Framework by                 80

the Basle Committee, and the impending integration
of new regulations into the regulatory framework                 60


governing banking services in the European Union.
                                                                 40
   Financial risk is distinguished into market risk,
credit risk, liquidity risk and operational risk. In
                                                                 20
2002, Commercial Bank further developed its
systems for monitoring and managing the two first                 0

categories of risk, and laid the foundations for the
                                                           Graph 2. 5-day VaR diagram for the Foreign Currency Portfolio
development of systems for the measurement of              (confidence interval: 99%) during the second semester of 2002

liquidity and operational risk.                                 3. Government Bonds Portfolio: 5-day VaR diagram
                                                                                 (in EUR 000)
                                                             20000


   Market Risk
                                                             15000


   The Bank has adopted and is currently applying
modern methods for monitoring and managing                   10000

market risk arising from changes in interest rates, in
the prices of securities and in foreign currency prices.      5000

   The market risk of the trading portfolio is
monitored on a daily basis, through the calculation               0

of the maximum potential loss (Value at Risk - VaR)
for each portfolio and for various retention periods,      Graph 3. 5-day VaR diagram for the Government Bonds Portfolio
                                                           (confidence interval: 99%) during the second semester of 2002
using a confidence interval of 99%.

                                                                                                                               47
        In addition to calculating the maximum potential              system monitors the movements amongst loan
     loss under normal circumstances in the market, the               categories, and assessments are made concerning
     Bank also estimates the potential loss under                     the potential loss associated with credit risk.
     extreme conditions (stress test). The scenarios                     In the context of its harmonisation with the Basle
     employed in stress test analysis refer to hypothetical           Committee II Guidelines, the Bank has developed a
     extreme variations in the prices of shares, foreign              10-scale loan classification system for its loan
     currency and interest rates on the basis of the                  portfolios (Internal Rating System), which is already
     proposals made by the Derivative Policy Group.                   being implemented on a pilot basis and will be fully
        The basic method for managing risk is the                     developed by the end of 2003.
     imposition of credit limits for each portfolio. The                 This new Credit Rating System for enterprises
     limits are determined on the basis of the risk                   will permit a more accurate calculation of the
     desired for each portfolio and the results from                  probability of default on obligations and of the
     stress testing scenarios and, once they are                      contingent loss, so that the expected loss, as well
     approved by the Asset-Liability Committee, they                  as the funds required to cover it, can be estimated.
     are provided to the responsible management units.                   Concerning the loan portfolios of Retail
        Commercial Bank intends to submit a Report to                 Customers and Small Enterprises, the Bank uses
     the Bank of Greece concerning certification of the               centralised scoring systems for the more efficient
     market risk calculation model.                                   identification, monitoring and assessment of risk.
                                                                         In 2002, the Bank developed activities in the
        Credit Risk                                                   area of international corporate bonds. In addition to
                                                                      interest rate and foreign exchange risk, corporate
        The Bank places particular emphasis on the                    bonds involve credit risk. The Bank has formulated
     upgrading of the systems used for managing credit                a relevant procedure for managing corporate
     risk, which is the risk which may arise from the
                                                                                Corporate Bond Portfolio Rating (S&P)
     counterparty’s inability to meet its contractual loan
                                                                        25
     obligations.
        In 2002, in order to evaluate its corporate loan
                                                                        20
     portfolio, the Bank once again utilised a 5-scale loan
     classification system to assess the quality of the loan
                                                                        15
     portfolio. The credit quality criteria for classification into
     each category are described in the Bank’s Credit Policy
                                                                        10
     System, which is the basic tool used for identifying and
     monitoring the credit risk associated with loans.
                                                                         5
        The criteria used in the loan classification system
     include financial and qualitative data on enterprises,
     transactional behaviour, as well as the type of loan                0
                                                                             AAA   AA-   A+   A    A- BBB+ BBB BBB- BB-
     and collateral provided. The loan classification

48
bonds and is monitoring the credit rating of               will contribute to the more systematic and efficient
corporate bonds as this is rated by Moody’s and            internal pricing, based on the Bank’s individual cost
Standard & Poor’s. On 31.12.2002, the portfolio            and profitability centres, and to the analysis of the
had an average credit rating of A.                         efficiency of various operational areas and products.
                                                           Consequently, it will support a more rational
    Asset & Liability Management (ALM)                     allocation of capital and the development of strategic
                                                           options concerning business development.
    In 2002 the Bank acquired and installed a
specialised EDP System with the objective of                     Capital Adequacy
ensuring more efficient Asset & Liability Management
(ALM). The new system ensures a more systematic                  The Capital Adequacy Ratios, as of the end of
monitoring of price and liquidity risks resulting from     2002, suggest that the Bank and the Group
the current structure of the Bank’s Balance Sheet.         possess a sound capital base which will enable
    In this way the Bank will be in a position to          future business development. In particular, the
evaluate alternative scenarios for changes in interest     Total and Basic (Tier I) Capital Adequacy Ratios
rates and foreign exchange parities and their effect on    stood at 10.8% for the Bank (10.3% for the Group),
Bank’s income, as well as to forecast liquidity            against minimum allowable limits of 8% as
conditions in the future and to take measures for the      determined by the Bank of Greece.
efficient management of liquidity. Furthermore, the              The decline in the ratio between 31.12.2001 and
new system facilitates the more systematic and             31.12.2002 was mainly due to a reduction of equity
detailed analysis of the yield of the Bank’s Equity        capital, as a result of the write-off of losses arising
Capital and of its products profit margins and the         from the valuation of the shares, bonds, mutual
forecast of future capital requirements. The               funds, participations and derivative products
integration of the Bank’s subsidiaries into the new        portfolios, and secondarily due to the growth of the
Asset & Liability Management System is a top priority.     Credit Risk Weighted Assets of the Bank and of the
    In addition, the Bank is installing a Funds Transfer   Group, as a result of the expansion of retail banking
Pricing System. Utilisation of this management tool        activities and of credit expansion in general.


BANK                                                                                         (amounts in EUR million)
                                                   31/12/2000                  31/12/2001                 31/12/2002
Regulatory Capital                                     1,812.3                     1,921.5                    1,215.4
Credit Risk Weighted Assets                            7,286.5                     9,665.7                   10,319.1
Market Risk Weighted Assets                            2,055.9                     1,172.9                      920.2
Total Risk Weighted Assets                             9,342.5                    10,838.6                   11,239.3
Capital Adequacy Ratio (%)                              19.4%                       17.7%                      10.8%

GROUP                                                                                        (amounts in EUR million)
                                                   31/12/2000                  31/12/2001              31/12/2002(*)
Regulatory Capital                                     2,026.5                     1,868.3                   1,136.1
Credit Risk Weighted Assets                            7,100.3                     9,524.7                   9,847.6
Market Risk Weighted Assets                            2,231.7                     1,404.4                   1,145.2
Total Risk Weighted Assets                             9,332.0                    10,929.1                  10,992.8
Capital Adequacy Ratio (%)                              21.7%                       17.1%                     10.3%
*NB: Figures for 2002 are estimates.



                                                                                                                        49
     8. Analysis of the Bank’s Financial Statements




50
 8.1. BALANCE SHEET                                                                         Breakdown of CBG assets
                                                                                                  31/12/2002
     Assets
                                                                                                                            NET LOANS
                                                                                                                            AND ADVANCES
                                                                         BONDS, DEBENTURES                                  TO CUSTOMERS
                                                                                 AND OTHER                                  59.5%
     At the end of 2002, the Bank’s total assets                            SECURITIES 25.0%

 amounted to EUR 16.4 billion. Loans and advances
 to customers account for the largest part of total
 assets reflecting the emphasis placed by the Bank
 on lending (Graph 8-1). On 31st December 2002,
 the outstanding balances on net loans and                                   SHARES-
                                                                      PARTICIPATIONS
                                                                                 5.5%
 advances to customers accounted for around 60%
 of the Bank’s total assets, compared to 48% in 2001.                                 OTHER
                                                                                       10.0%
 At the end of 2002, bonds1 represented around 25%
                                                                         markets in the last few years.
 of total assets, compared to 30% at the end of 2001.
                                                                             The outstanding balances on loans at the end of
 Finally, shares and participations held by the Bank
                                                                         2002 stood at EUR 9.9 billion, showing an increase
 accounted for around 5.5% of total assets as against
                                                                         by 17.1% compared to the end of 2001. Despite the
 8.3% at the end of the previous year. The decrease
                                                                         significant increase in the outstanding loan balances,
 in the contribution of shares and participations to
                                                                         the quality of the Bank’s loan portfolio shows a
 total assets is due to the elimination from the Bank’s
                                                                         noticeable improvement, as evidenced by the
 trading, investment and participation portfolios of
                                                                         percentage of non-performing loans as a percentage
 valuation losses following the decline in capital
                                                                         of all loans. This development is the result of better
 Graph 8-1: Breakdown of CBG assets on 31 December 2001 and
 2002                                                                    monitoring of loan repayments, as well as of the
                    Breakdown of CBG assets
                          31/12/2001
                                                                         introduction of new systems for evaluating the
                                                  NET LOANS              creditworthiness of borrowers. At the same time, the
                                                  AND ADVANCES
BONDS, DEBENTURES                                 TO CUSTOMERS
                                                  47.6%
                                                                         Bank increased its provisions by 13% and
        AND OTHER
   SECURITIES 29.7%
                                                                         proceeded to write-offs from previous periods.
                                                                             Loans to households (housing and consumer
                                                                         credit) contributed significantly to the increase in
                                                                         the outstanding loan balances. The breakdown of
                                                                         outstanding loan balances by sector of economic
                                                                         activity for the five-year period from 1998 to 2002 is
       SHARES-
PARTICIPATIONS                                                           presented in Table 8-1. During 2002 16,500 new
           8.3%
                                 OTHER                                   housing loans, totalling EUR 729.4 million, were
                                 14.4%

    1 Refers to the sum of "Bonds and Other Fixed-Yield Securities" and "Treasury Bills and Other Securities Eligible for Refinancing with the
 Central Bank".



                                                                                                                                                 51
       Table 8-1: Breakdown of total loan portfolio: outstanding balances by sector of economic activity
                                    at year end, 1998-2002 (in EUR million)2
     Sector of economic activity*                                     1998            1999             2000           2001            2002
     Enterprises and households                                    4,218.9         5,020.7          6,150.8        7,959.8         9,462.1
     Public Sector organisations                                     103.8           147.8            553.1          524.6           474.3
     Total loans                                                   4,322.7         5,168.5          6,703.9        8,484.5         9,936.4
                                                       Enterprises and households
                                                               Enterprises
     Agriculture                                                      14.1            29.1             29.8           33.9            41.6
     Industry, manufacturing and mining                            1,065.6         1,193.6          1,320.0        1,709.1         1,859.8
     Trade                                                         1,147.2         1,546.8          1,955.3        2,233.4         2,151.9
     Tourism                                                         159.8           173.1            167.4          224.3           332.1
     Shipping                                                        327.0           349.6            422.4          468.0           470.9
     Other                                                           568.8           554.4            774.7        1,257.6         1,865.9
                                                                  Households
     Housing                                                         558.3            742.8         1,015.1        1,466.5         2,015.9
     Consumer credit                                                 378.4            431.3           466.0          567.2           724.3

        (*) Due to changes in the classification by economic activity introduced by the Bank of Greece in 2002 changes have been
     made, where feasible, to the classification of loans in previous years.
     granted. The outstanding balance of housing loans Graph 8-2: Outstanding balances of CBG loans in retail banking on
                                                                           31 December 2001 and 2002
     on 31 December 2002 exceeded EUR 2 billion,                                 Outstanding balances of CBG loans in retail banking
                                                                                               31/12/2001 (in EUR bn)
     registering an increase of 37.5% compared to 31
                                                                                   CONSUMER CREDIT
     December 2001. The outstanding balances on                                          EUR 0.6 bn
                                                                                                                             SMEs
     housing loans represented 20.3% of outstanding                                                                          EUR 2.8 bn

     loan balances at the end of 2002 compared to
     17.3% at the end of 2001.                                                 HOUSING
                                                                                 LOANS
         Consumer credit also contributed significantly to                    EUR 1.5 bn

     increased lending by the Bank. A total of 60,000 new
     consumer and personal loans were granted in 2002,
     while 45,000 new credit cards were issued during the
     same year. At the end of 2002, the outstanding
                                                                                 Outstanding balances of CBG loans in retail banking
     balances on consumer loans amounted to EUR                                                31/12/2002 (in EUR bn)

     724.3 million, showing an increase by 27.7%                                  CONSUMER CREDIT
                                                                                        EUR 0.7 bn
     compared to the end of 2001. Consumer credit                                                                        SMEs
                                                                                                                         EUR 3.4 bn
     accounted for 7.3% of all loans granted by the Bank,
     as against 6.7% at the end of 2001.
                                                                              HOUSING
                                                                                LOANS
         At the same time, lending to businesses                             EUR 2.0 bn

     increased significantly. At the end of 2002, the
     outstanding balances of loans to enterprises in
     industry, manufacturing and mining amounted to
     EUR 1.86 billion, showing an increase of 8.8%
     2. In all tables discrepancies between the total and the sum of the individual entries are due to rounding.



52
compared to the end of 2001.                                    2000, respectively. Graph 8-2 presents the
   Regarding the financing of businesses, over half             breakdown of outstanding retail banking loan
(51.3%) of the outstanding balances of loans were               balances in loans to SMEs, housing loans and
to enterprises that come under the responsibility of            consumer loans for 2002 and 2001.
the Bank’s Corporate and Consumer Banking Unit
and are –in their large majority– small and medium-                Liabilities
sized enterprises (SMEs).
   At the end of 2002, the percentage of                           The Bank’s deposits at the end of 2002 amounted
outstanding balances in retail banking (loans to                to EUR 9.5 billion having increased by 1.5% compared
individuals and SMEs) amounted to 62.3%, as                     to the end of 2001. This increase was mainly due to
against 57.3% and 54.3% at the end of 2001 and                  the rise in savings deposits which at the end of 2002
                                                                constituted 68.8% of total deposits compared to
Graph 8-3: Breakdown of CBG deposits and repos on 31 December   67.7% at the end of 2001. The Bank’s Repos at the
2001 and 2002
                                                                end of 2002 amounted to EUR 3.5 billion and were by
 Breakdown of CBG deposits and repos on the 31/12/2001
                                                                9.6% lower compared to the end of 2001.
                 TIME 11%                                          Graph 8-3 shows the breakdown of deposits
                                               SAVINGS
                                                   48%
                                                                and repos of the Bank on the 31st December 2002
                                                                and 31st December 2001. The Bank’s liabilities to
                                                                customers accounted for 80% of total liabilities, as

  REPOS 29%
                                                                against 76% in 2001.
                                                                   The Bank’s own funds on the 31st December
                                                                2002 stood at EUR 1,255.2 million, with the Bank’s
                                                                overall capital adequacy ratio being estimated at
                 SIGHT 12%
                                                                10.8%. For CBG, the overall capital adequacy ratio
                                                                coincides with the basic capital adequacy ratio (Tier
 Breakdown of CBG deposits and repos on the 31/12/2002
                                                                1 Capital Ratio), since all of the Bank’s capital is Tier
                 TIME 10%                      SAVINGS          1 capital. Despite the decline in the Bank’s capital
                                                   50%
                                                                adequacy ratio, CBG still has one of the highest
                                                                capital adequacy ratios in the Greek banking sector.
                                                                   The decrease in the Bank’s capital adequacy ratio

 REPOS 27%                                                      resulted from inter alia the fact that at the end of 2002
                                                                the Bank’s trading, investment and participation
                                                                portfolios were marked to market and the differences
                                                                were set off against own funds. Furthermore, and in
              SIGHT 13%




                                                                                                                            53
     accordance with the prevailing accounting principles,               the decrease in the income from financial transactions
     the value of the Bank’s own shares that were bought                 (net trading income), which showed a decline of
     back has also been set off against own funds. The                   85.6% compared to 2001 and amounted to EUR 40.4
     decrease of the capital adequacy ratio is also due to the           million as against EUR 280.2 million in 2001, and to
     increase of the Bank’s risk weighted assets following               the lower revenues from securities (dividend income),
     the significant expansion of the Bank’s loan portfolio.             which for 2002 stood at EUR 10.1 million as against
                                                                         EUR 44.2 million in 2001. These developments reflect
     8.2 RESULTS                                                         the conditions prevailing in capital markets.
                                                                            As a result of the decline in the net trading
           The Bank’s pre-tax profits for 2002 amounted to               income and in revenues from securities, the Return
     EUR 118.2 million showing a decrease of 68.4%                       on Average Equity (ROAE) and the Return on
     compared to 2001. The Bank’s after tax profits for 2002             Average Assets (ROAA) ratios stood at lower levels
     stood at EUR 86.2 million having declined by 69.5%                  than at those for 2001 (ROAE: 2002: 7.2%, 2001:
     compared to 2001. The Management of the Bank will                   19.4%; ROAA: 2002: 0.7%, 2001: 2.2%).
     propose to the Annual General Shareholders’ Meeting                    On the other hand, revenues from core operating
     the payment of a dividend of EUR 0.4 per share. On                  activities showed a significant increase, while the
     the basis of the share price on 31 December 2002, this              Bank’s expenses were contained. Revenue from
     dividend corresponds to a dividend yield of 2.8%.                   core operating activities, net income from interest
           The decrease in the Bank’s pre-tax profits is due to          and commissions, amounted to EUR 598.4 million in
     Graph 8-4: Net Interest Margin, 2000-2002 (%)                       2002, compared to EUR 554.5 million in 2001,

           2.80                                                          showing an increase by 8%. This increase is the
                                                                         highest among the large Greek banks.
                                                           2.7              More specifically, net interest income in 2002
           2.60
                                          2.6                            amounted to EUR 467.6 million, having increased by
                                                                         around 9% compared to 20013. The increase in net
     (%)




           2.40
                                                                         interest income reflects the stronger presence of the
                                                                         Table 8-2: Structure of net fee and commission
                                                                                     revenue 2002-2001 (%)
           2.20                                                          Source                                  2002    2001
                          2.2                                            Accounts maintenance and loans           25.7    24.3
                                                                         Credit cards                             20.8    21.3
                                                                         Letters of guarantee
           2.00
                                                                         and import-export guarantees             14.9    15.3
                                                                         Mutual funds                              6.7     6.4
                   2000              2001              2002              Money transfers                           6.3     5.7
                                                                         Commissions from Government
         3 With effect from the 1st quarter of 2002 capital gains from   Bonds-Treasury Bills
     bonds are included in the "Net trading income" account and not in   and Other Securities                     2.8      4.9
     the "Net interest income" account. The necessary adjustments have   Other                                   22.8     22.1
     been made so that the data for 2001 are comparable to the 2002      Total                                  100.0    100.0
     data.



54
        Table 8-3: CBG gross operating income,                           Table 8-4: CBG General administrative
                      2002-2001                                                   expenses, 2002-2001
(EUR million)                                2002        2001       (EUR million)                         2002       2001
Net interest income                          467.6       429.2      Personnel remuneration                329.9      324.1
Net fee and commission income                130.8       125.3      Other administrative expenses         111.3      106.1
Income from securities                        10.1        44.2      Total general administrative expenses 441.1      430.2
Net trading income                            40.4       280.2
Other operating income                        18.6        14.9         Other operating income increased by 25.1%
Gross operating income                       667.5       893.8
                                                                    and amounted to EUR 18.6 million in 2002,
Bank in the area of retail banking (individuals and
                                                                    compared to EUR 14.9 million in 2001.
SMEs). The Bank’s net interest margin for 2002 stood
                                                                       The Bank’s general administrative expenses
at 2.7%, as against 2.6% and 2.2% in 2001 and 2000,
                                                                    (personnel costs and other administrative
respectively, and is one of the highest in the market.
                                                                    expenses) increased by 2.5% in 2002 compared to
   Net fee and commission income amounted to EUR
                                                                    2001 and amounted to EUR 441.1 million. The
130.8 million in 2002, as against EUR 125.3 million in
                                                                    Bank’s efficiency ratio, measured as the ratio of
2001, registering an increase of 4.4%. As shown in
                                                                    general administrative expenses over core
Table 8-2, the increase in fee and commission
                                                                    operating income, improved and decreased to
revenue is due to the increase in revenues from purely
                                                                    73.7% from 77.6% in 2001. After significant
banking activities (accounts maintenance, money
                                                                    improvement in 2001, the ratio of general
transfers) and took place despite the adverse
                                                                    administrative expenses over average assets
conditions in capital markets, which affected the
                                                                    remained relatively stable, at 2.6%, in 2002.
income from commissions related to custodian
                                                                       More specifically, personnel remuneration in
services, underwriting and brokerage activities.
                                                                    2002 amounted to EUR 329.9 million, showing an
Graph 8-5: General administrative expenses over average assets      increase of 1.8% compared to 2001. Other
and over core operating income (%)
                                                                    administrative expenses stood at EUR 111.3 million,
  2.9                                                      90
                                                                    Graph 8-6: Number of employees

  2.8                                                      85         8,000


  2.7                                                      80         7,800



                                                                      7,600
  2.6                                                      75

                                                                      7,400
  2.5                                                      70

                                                                      7,200

  2.4                                                      65
            2000             2001              2002                   7,000

   GENERAL ADMINISTRATIVE EXPENSES OVER AVERAGE ASSETS (%)
                                                                      6,800
   GENERAL ADMINISTRATIVE EXPENSES OVER CORE OPERATING INCOME (%)             1997   1998   1999     2000   2001    2002



                                                                                                                             55
     Graph 8-7: Productivity indices: loans and deposits per employee   EUR 77 million compared to EUR 66.2 million in 2001.
                               (in EUR million)
                                                                        This increase by 16.4% is commensurate with the rate

     2,0                                                                of increase in loans and advances to customers.
                                                                           The number of employees of the Bank shows a

     1,5                                                                gradual decrease (Graph 8-6) a decrease which
                                                                        was also made possible due to the considerable

     1,0                                                                increase in productivity that took place in recent
                                                                        years (Graph 8-7). Between 1999 and 2002 loans

     0,5
                                                                        per employee more than doubled, while deposits
                                                                        per employee increased by 40.0%.
                                                                           CBG’s share price in 2002 was affected by the
     0,0
            1997     1998      1999      2000      2001     2002        negative trends in both Greek and international
                                                                        capital markets. In the period from 28 December 2001
        LOANS PER EMPLOYEE
        DEPOSITS AND REPOS PER EMPLOYEE                                 to 31 December 2002, CBG’s share declined by
                                                                        60.9% while in the same period the banking sector
     having increased by 4.9% compared to 2001.                         index fell by 43.9% and the composite price index of
        Depreciation of fixed assets for 2002 amounted                  the Athens Stock Exchange (ASE) decreased by
     to EUR 33.3 million, registering an increase by                    32.5%. CBG’s capitalisation on December 31st 2002
     15.6% compared to 2001, reflecting expenditures                    stood at EUR 1.24 billion. The number of CBG shares
     for the technology infrastructure of the Bank.                     traded on ASE during 2002 was 20.3 million and thus
        Provisions for contingent liabilities for 2002 stood at         the share’s marketability was 23.8%.




56
57
     9. Analysis of the Group’s Financial Statements




58
  9.1. BALANCE SHEET                                            by the Bank account for more than 98% of these
      Assets                                                    balances. It should be noted that at the end of 2002,
                                                                net loans and advances to customers amounted to
      The Group’s total assets at the end of 2002               60.2% of assets compared to 48.2% at the end of
  stood at EUR 16.9 billion. The Bank accounts for              2001. The Group’s bonds in 2002 amounted to EUR
  97.4% of these assets and therefore the main                  4.3 billion, of which 94.6% were bonds held by the
  factors affecting the Group’s assets are the same             Bank. The composition of Group assets at the end of
  as those affecting the Bank’s assets.                         2001 and 2002 is shown in Graph 9-1.
      In particular, on the 31st December 2002 the total
  outstanding loan balances granted by the Group                   Liabilities
  amounted to EUR 10.1 billion and the loans granted
                                                                   The Group’s own funds on the 31st December
  Graph 9-1: Composition of the Group’s assets on 31 December
  2001 and 2002                                                 2002 stood at EUR 1,220.4 million, with the Group’s
         Composition of CBG Group assets 31/12/2001             overall capital adequacy ratio being estimated at
                                                                10.3%. For CBG Group, the overall capital adequacy
                                             NET LOANS
  BONDS, DEBENTURES                          AND ADVANCES       ratio coincides with the basic capital adequacy ratio
          AND OTHER                          TO CUSTOMERS
     SECURITIES 30.2%                        48.2%
                                                                (Tier 1 Capital Ratio), since all of the Group’s capital
                                                                is Tier 1 capital. Despite the decline in the capital
                                                                adequacy ratio, the Group still has one of the highest
                                                                capital adequacy ratios in the Greek banking sector.
                                                                   The marking to market of the Group’s trading and
                                                                investment portfolios at the end of 2002 contributed
         SHARES-
  PARTICIPATIONS                                                to the decline in the capital adequacy ratio of the
             6.1%
                              OTHER                             Group. Own funds were also reduced, in accordance
                              15.5%
         Composition of CBG Group assets 31/12/2002             with the prevailing accounting principles, by the

                                             NET LOANS
                                                                value of own shares that were bought back. The
  BONDS, DEBENTURES                          AND ADVANCES
          AND OTHER                          TO CUSTOMERS       reduction of the capital adequacy ratio was in
     SECURITIES 25.8%                        60.2%
                                                                addition due to the increase of risk-weighted assets
                                                                due to the significant expansion of the loan portfolio.


                                                                9.2. RESULTS

       SHARES-
PARTICIPATIONS
           3.0%                                                    The pre-tax profits of the Group for 2002 stood
            OTHER
             11.0%                                              at EUR 89.62 million as against EUR 243.2 million



                                                                                                                           59
     for 2001, showing a decrease of 63.16%. The                          In contrast, revenues from core operating
     Group’s net profits after tax and minority rights                activities increased significantly. The Group’s core
     stood at EUR 52.25 million, registering a decrease               operating revenues, i.e. net interest and fee and
     of 64.27% compared to 2001.                                      commission income amounted to EUR 706.4 million
           The decline in the Group’s pre-tax profits is due to       for 2002, showing an increase of 8.7% compared to
     the decrease in net trading income which amounted                2001. This improvement in core operating income is
     to EUR 46.94 million compared to EUR 172.96 million              the highest among the large Greek banking groups.
     in 2001, and to the negative income from securities.                 The Group’s net interest income increased by
     In 2002, revenues from securities were negative                  10.1% to EUR 560.8 million, as against EUR 509.5
     mainly due to the particularly adverse conditions                million in 20011. The Group’s net interest margin
     prevailing in the insurance sector. The negative                 improved significantly to 3.2% in 2002 from 3.0% in
     results of "PHOENIX METROLIFE EMPORIKI", which                   2001 and 2.7% in 2000, respectively, and was one
     CBG consolidates on the basis of the net equity                  of the highest in the market.
     method, reflects the adverse conditions in the                       Despite the negative conditions prevailing in the
     insurance sector and the non-recurrent expenditures              stock market, net fee and commission income
     linked to the cost of merger and restructuring of the            increased by around 4% to EUR 145.7 million in
     new "PHOENIX METROLIFE EMPORIKI" insurance                       2002 from EUR 140.3 million in 2001. As shown in
     company which resulted from the merger of                        detail in Table 9-1, the increase in revenue from
     "PHOENIX GENERAL INSURANCE COMPANY OF                            commissions is due to the increase in revenues from
     GREECE S.A". with "METROLIFE EMPORIKI S.A.".                     banking activities and took place under adverse
                                                                      conditions for capital markets that adversely affected
     Graph 9-2: CBG Group Net Interest Margin, 2000-2002
     (Net Interest Margin, NIM) (%)
         3.30                                                          Table 9-1: Structure of net fee and commission
                                                                                   revenue, 2001-2002 (%)
           3.20
                                                           3.2        Source                                     2001       2002
                                                                      Banking activities                          75.7       82.1
           3.10                                                       Securities                                  20.7       15.6
                                                                      Foreign exchange                             3.6        2.3
           3.00                                                       Total                                      100.0      100.0
                                          3.0
     (%)




           2.90
                                                                       Table 9-2: CBG Group gross operating income,
           2.80                                                                         2001-20022
                                                                      (EUR million)                              2001       2002
           2.70                                                       Net interest income                        509.5      560.8
                          2.7                                         Net fee and commission income              140.3      145.7
           2.60                                                       Income from securities                      36.7      -8.09
                                                                      Results of financial operations            173.0       46.9
                                                                      Other operating revenue                     16.2       22.0
           2.50
                   2000            2001             2002              Gross operating results                    875.7      767.2

        1 With effect from the 1st quarter of 2002 capital gains from bonds are included in the "Income from financial transactions"
     account and not in the "Net interest income" account. The necessary adjustments have been made so that the data for 2001 are
     comparable to the 2002 data.
        2 In all tables discrepancies between the total and the sum of the individual entries are due to rounding.



60
income from commissions relating to custodian                 revenues (sum of net income from interest and
services, underwriting and brokerage activities.              commissions), which stood at 68.4% in 2002 as
      Other operating income amounted to EUR 22               against 70.9% and 76.9% in 2001 and 2000,
million showing an increase of 35.2% compared to              respectively, as also shown in Graph 9-3.
2001.                                                            Depreciation of fixed assets for 2002 amounted
      The Group’s general administrative expenses             to EUR 104.06 million having increased by 11.2%
(personnel costs and other administrative                     compared to 2001.
expenses) amounted to EUR 483.5 million in 2002                  Provisions for contingent liabilities increased by
compared to EUR 460.8 million in 2001, an increase            17.7% to EUR 84.97 million as against EUR 72.17
of 4.9%. More specifically, personnel costs                   million in 2001.
increased by 4.3%, while other administrative                    As a result of the above developments, the Return
expenses increased by 6.7%. These rates of growth             on Average Assets (ROAA) for the Group stood at
are significantly lower than the corresponding                0.5% in 2002, as against 1.4% in 2001, while the
growth rates registered in 2001 (5.9% and 8.2%,               Return on Average Equity (ROAE) for the Group
respectively). Part of the increase in expenses               stood at 5.6% in 2002, as against 12.1% in 2001.
reflects the costs for the operation of new                   Graph 9-4: Number of employees in the Group, 1998-2002

businesses (Emporiki Asset Management,                          8.100
Graph 9-3: Operating expenses over core operating revenues,
2000-2002 (%)
                                                                8.000
      78.0


      76.0                                                      7.900


      74.0                                                      7.800

      72.0
                                                                7.700
(%)




      70.0
                                                                7.600
      68.0

                                                                7.500
      66.0
                                                                         1998     1999     2000     2001     2002


      64.0                                                       The Group employees at the end of 2002
             2000           2001            2002
                                                              numbered 7,679 persons. Employment in the Group
Commercial Real Estate), which in 2002 filed their            is showing a declining trend during the last years
first accounts for a fiscal period, which exceeded 12         (Graph 9-4) due to the increase in productivity. The
months. The greater efficiency in the management              slight increase registered in 2002 reflects the
of expenses is reflected in the improvement of the            operation of new businesses, and the expansion of
ratio of operating expenses over core operational             the activities of Group subsidiaries abroad.



                                                                                                                       61
     10. Balance Sheets




62
BASIC ACCOUNTING PRINCIPLES                                   a) For securities and derivative products in the
                                                           trading portfolio which are listed on Stock Exchanges,
   The following basic accounting principles were          the value which resulted from their valuation based on
applied for preparing the Balance Sheet and the            their stock market price on 31.12.2002.
accompanying ‘Profit & Loss Account’:                         b) For participations in the investment portfolio
                                                           which are listed on the ASE, the value which
   1. Valuation of fixed assets and calculation of         resulted from their valuation based on the average
depreciation                                               stock market price in December 2002.
                                                              c) For share titles not listed on the Stock
   Tangible fixed assets were valued, on 31.12.2002,       Exchange, their book value resulting from an external
at their acquisition value (historical cost), with the     investigation of the published Balance Sheets of the
exception of land and buildings acquired up to             previous accounting period of the relevant companies,
31.12.1999, which have been valued at their                after the deduction of losses and considering multi-
readjusted value, in accordance with the provisions of     year depreciation expenses as Asset items.
L 2065/1992, in 2000 accounting period. Depreciation          d) For Greek Treasury Bonds, the prices in the
of all fixed assets was calculated in the 2002             Electronic Secondary Securities Market (HDAT) on
accounting period using the increased depreciation         31.12.2002, and for foreign bonds, the international
rates specified by the provisions of PD 100/1998.          trading prices on 31.12.2002.
                                                              e) For other securities not listed on the Stock
   2. Valuation of securities                              Exchange, their book value as in case (c).


   The valuation of securities owned by the Bank has          3. Provisions for contingent losses due to
been performed pursuant to L 2992/2002 as follows:         bad/doubtful debt
   For domestic and foreign bonds, shares, mutual
fund units and derivative products, at the lowest,            The calculation of the total amount of contingent
for each type, between their acquisition value and         loss from bad/doubtful debt is performed by the
their current value. The difference has been directly      Bank, on the basis of the detailed estimates -for
charged to shareholders’ equity via the account            each debtor case- produced by the Bank’s
‘reserves from securities’.                                competent officers, who take into consideration all
   For participations, at the lowest total value between   existing relevant data and information.
acquisition value and current value. The difference has       The total amount of the potential loss as
been directly charged to reduce the shareholders’          indicated above is covered by the amount of the
equity via the account ‘reserves from securities’.         corresponding provision formed, which appears in
   The current value is estimated as follows:              the Balance Sheet as a deduction under Assets.



                                                                                                                    63
     Regarding this provision, it is clarified that for the    the last working day of the accounting period.
     2002 accounting period an amount of EUR
     77,047,000 was formed, in accordance with                    5. Severance and redundancy payments
     paragraph 2 of CL 396/1968, as against EUR
     66,197,212 for the 2001 accounting period, which             Such compensation is covered by the Personnel
     represents, as was also the case in the previous          Insurance Fund (TAPETE). In the event of a charge
     accounting period, a percentage of 1% of the annual       to be paid by the Bank, the corresponding amount,
     average of the loans actually granted by the Bank,        by standard practice, is charged to the accounting
     excluding loans guaranteed by the Greek State.            period during which it is paid.


        4. Valuation of foreign exchange and of                   6. Accrued and non-accrued interest
     claims and obligations in foreign currencies              (income-expenses)
                                                                   Accrued interest on deposits, loans, investments
        The valuation is performed on the basis of the         etc. is transferred to the Profit & Loss Account,
     current value of foreign currencies in euro on the last   regardless of whether it is receivable (interest income)
     working day of the accounting period. Any resulting       or has been rendered payable (interest expense).
     differences in foreign exchange are entered in the           Non-accrued interest is carried forward to the
     Profit & Loss Account. Items under Assets and             next accounting period, provided that it has been
     Liabilities kept in foreign currencies, which are set-    entered in the books.
     off against each other in total, have been expressed         It is clarified that the above also apply to
     in euro based on the average reference prices on          accrued interest on Greek Treasury Bonds.




64
65
                                                                                              (S.A. Reg 6064/06/B/86/03)
                 BALANCE SHEET OF DECEMBER 31, 2002 (Amounts in euros)
                                                        (January 1, 2002 - December 31, 2002)
                                                                                                           95th YEAR


     ASSETS                                                                                                Fiscal Year                                               Fiscal Year
                                                                                                              2002                                                      2001
     1. Cash in hand and balances with the Central Bank.                                                    486,971,801.85                                             933,565,728.78

     2. Treasury bills and other securities eligible for
       refinancing with Central Bank
         a) Treasury bills and similar
       securities ...................................................................                           447,037.99                                               8,736,662.01

     3. Amounts due from credit institutions
        a) On demand..........................................................             3,405,871.06                                               2,940,566.22
        b) Other amounts.....................................................            522,371,602.78                                             926,725,662.90
        c) Reverse repos .....................................................            22,350,519.18     548,127,993.02 1,035,546,832.86                     ––     929,666,229.12 1,871,968,619.91

     4. Loans and advances to customers
        a) Loans....................................................................    9,936,433,210.90                                           8,484,451,007.47
        b) Other amounts due from customers...................                            121,230,714.90 10,057,663,925.80                           192,605,268.57 8,677,056,276.04

        Less: Provisions for doubtful debts .........................                                       (265,777,514.60) 9,791,886,411.20                         (236,026,451.20) 8,441,029,824.84

     5. Bonds and other fixed-yield securities issued by the:
        a) Government ......................................................... 3,700,273,805.90                                                   4,970,925,689.92
        b) Other issuers........................................................  409,213,380.16 4,109,487,186.06                                    289,232,516.11 5,260,158,206.03

     6. Shares and other variable-yield securities ..............                                           216,374,451.11                                             588,055,944.72

     7. Participations in non-affiliated companies...............                                            24,013,313.46                                              24,246,123.98

     8. Participations in affiliated companies ......................                                       671,574,347.91 5,021,449,298.54                            853,915,552.34 6,726,375,827.07

     9. Intangible assets
        a) Establishment and foundation expenses............                              16,607,861.42                                              16,734,399.97
        c) Other intangible assets........................................                63,396,628.35      80,004,489.77                           46,537,169.82      63,271,569.79

       Less: Amortisation of intangible assets.....................                                          (40,254,888.17)      39,749,601.60                        (29,176,954.64)     34,094,615.15

     10. Tangible assets
       a) Land .....................................................................      48,219,733.33                                              48,219,733.24
       b) Buildings ..............................................................       121,816,194.07                                             118,759,407.72
       Less: Depreciation.....................................................           (78,277,106.56)     91,758,820.84                          (71,729,467.96)     95,249,673.00
         c) Furniture, electronic & other equipment.............                         122,751,319.69                                             106,876,572.43
         Less: Depreciation ..................................................           (90,508,484.93)     32,242,834.76                          (80,794,987.84)     26,081,584.59
         d) Other tangible assets ..........................................              12,025,533.37                                              11,079,025.95
        Less: Depreciation ....................................................           (5,794,504.03)      6,231,029.34                           (5,023,883.54)      6,055,142.41
        e) Fixed assets under construction
        and advances ...........................................................                              2,424,032.41       132,656,717.35                         12,067,124.44     139,453,524.44

     13. Other assets ..........................................................                                                 368,385,887.52                                           417,019,668.23

     14. Prepayments and accrued income .......................                                                                   58,666,451.09                                            91,295,802.22


            TOTAL ASSETS ....................................................                                                  16,448,341,200.16                                        17,721,237,881.86

     Off-Balance Sheet Accounts (Assets)..........................                                                             23,810,133,693.33                                        12,776,166,457.70




66
LIABILITIES                                                                                           Fiscal Year                                                                      Fiscal Year
                                                                                                         2002                                                                             2001
1. Amounts due to credit institutions
 a) On demand.......................................................... 48,493,312.75                                                                        50,685,880.46
 b) Time and at notice .............................................. 1,655,975,758.01                                                                    1,795,042,472.42
 c) Other .................................................................... 126,064.60            1,704,595,135.36                                           126,057.95              1,845,854,410.83

2. Amounts due to customers
 a) Deposits............................................................... 9,483,614,190.81                                    9,342,425,735.42
 b) Other
    ba) On demand................................................... 162,457,991.72                                               207,610,389.37
    bb) Time and at notice........................................                  1,665.84                                            1,293.20
    bc) Repos............................................................. 3,505,963,557.03 13,152,037,405.40 14,856,632,540.76 3,879,252,724.87                                       13,429,290,142.86 15,275,144,553.69

3. Liabilities on debt instruments
  b) Other debt instruments ......................................                                                                         73,358.76                                                                          73,358.76

4. Other liabilities .......................................................                                                        296,419,699.05                                                                    396,467,220.40
5. Accrued expenses .................................................                                                                 39,982,002.70                                                                     35,523,481.27
6. Provisions against contingent liabilities and charges:
  c) Other provisions .................................................                                                                     29,347.03                                                                         29,347.03
8. Share capital paid up
 (85,931,676 shares with nominal value Euro 5) .....                                                    429,658,380.00                                                                    427,258,940.00
9. Share premium account........................................                                        278,392,248.76                                                                    278,392,248.76
10. Reserves ..............................................................                             602,384,484.66                                                                  1,301,696,337.85
  10a) Treasury shares .............................................           (88,934,569.68)                                                                                 ––
  10b) Treasury shares reserves...............................                  27,071,517.08           (61,863,052.60)                                                        ––                           ––

11. Fixed assets revaluation reserve.........................                                              6,632,191.04                                                                       6,618,660.72
12. Retained earnings

   Retained earnings carried forward........................                                                              –– 1,255,204,251.86                                                     33,733.38 2,013,999,920.71
    TOTAL LIABILITIES ............................................                                                           16,448,341,200.16                                                              17,721,237,881.86

Off-Balance Sheet Accounts (Liabilities)
1. Contingent liabilities and commitments
  b1) Guarantees and assets pledged
    as collateral security............................................                               1,355,703,103.82                                                                   1,257,179,590.43
  b2) Non-utilized credit lines ...................................                                  2,482,241,564.10                                                                   1,306,806,482.76
  b3) Interest rate contracts ......................................                                   740,036,379.97                                                                      74,392,000.00
  b4) Exchange rate contracts..................................                                         15,257,536.90                                                                     119,885,737.88
  b5) Other.................................................................                           223,220,741.45 4,816,459,326.24                                                    144,772,086.25 2,903,035,897.32
2. Obligations resulting from temporary
   assignment transactions .......................................                                                               3,227,975,984.89                                                                   3,671,487,625.29
3. Other off-balance sheet items
  a) Beneficiaries of third party assets......................                                       2,531,743,879.22                                                                   3,145,263,062.37
  b) Obligations from bilateral agreements ..............                                            4,387,909,794.84                                                                   1,152,886,979.90
  c) Credit memorandum accounts ..........................                                           8,846,044,708.14 15,765,698,382.20                                                 1,903,492,892.82 6,201,642,935.09
                                                                                                                      23,810,133,693.33                                                                  12,776,166,457.70

NOTES:
1. The last revaluation of the Bank's fixed assets (land and buildings), in accordance with Law 2065/92, was carried out on the 31st of December 2000. 2. Investments in fixed assets between the 1st of January 2002 and the 31st of
December 2002 amounted to EUR 41,002,783.55. 3. The fixed assets of the Bank are free of charges or pledges as of the 31st of December 2002. 4. The number of employees on the 31st of December 2002 was 6,898. 5. Legal
disputes or disputes before arbitration are not likely to have a significant impact on the financial situation of the Bank. 6. Provisions against potential losses from bad and doubtful customers, in accordance with Law 396/68, are in our
view sufficient. 7. In accordance with Article 2, paragraph 1, of the Law 2992/2002 losses from the valuation of shares, bonds, mutual fund units and derivative contracts of a total amount of EUR 542.4 million have been set off against
the item "Special Tax Exempt Reserves from Securities" which is part of the "Reserves" item of Net Equity. 8. Losses from the valuation of participations amounting to EUR 183.30 million have also been set off against the item "Special
Tax Exempt Reserves from Securities". 9. The net balance of Treasury shares (after taking into account the reserve shown in the Appropriation Account) of EUR 61,863,052.60 appears in the Liabilities side as a deduction from Net
Equity. 10. The Bank has been subject to tax inspection up to and including fiscal year 1998 thus tax obligations for the years 1999-2002 have not been confirmed. 11. The basic accounting principles followed by the Bank are
included in the special chapter of the Report submitted by the Chairman of the Board of Directors to the Ordinary General Meeting of the Bank's shareholders. 12. In 2002, following the decisions of the General Meetings of the 15th of
June 2001 and the 17th of June 2002, there was a share capital increase of EUR 2,399,440.00 through cash payment arising from the exercise of the rights on stock options from the Bank's employees. 13. Certain items of the Balance
Sheet and the Profit and Loss Account for the financial period 2001 have been adjusted to be consistent with the corresponding items of the current financial period 2002. 14. According to the 4-digit classification of the National
Industry Classification Code (STAKOD-91) the total revenues of the Bank are classified under sector 651.9 "Activities of other intermediary monetary organizations".




                                                                                                                                                                                                                                                67
                                                                            PROFIT AND LOSS ACCOUNT
                       December 31, 2002 (January 1, 2002 - December 31, 2002) (Amounts in euros)
                                                                                      Fiscal Year                                                 Fiscal Year
                                                                                         2002                                                        2001
     1. Interest and similar income
      -Interest income from fixed - income securities............                      250,968,170.81                                               312,331,082.57
      -Other interest and similar income................................               611,043,248.28      862,011,419.09                           614,989,775.44      927,320,858.01
     Less:
     2. Interest expenses and similar charges .......................                                    (394,401,309.33)                                              (498,115,700.53)
                                                                                                          467,610,109.76                                                429,205,157.48
     Plus:
     3. Income from securities
       a) Income from shares and other variable-yield securities                         7,721,000.76                                                 8,022,925.61
       c) Income from participations in affiliated companies                             2,397,534.73       10,118,535.49                            36,196,488.67       44,219,414.28

     4. Fee and commission income ......................................                              140,688,868.13                                     135,140,019.94
      Less:
     5. Fee and commission expenses...................................                                 (9,917,070.35) 130,771,797.78                      (9,852,085.95) 125,287,933.99
      Plus:
     6. Income from financial transactions .............................                                               40,401,444.27                                     280,212,695.71
     7. Other operating income...............................................                                          18,629,632.04                                      14,892,540.15
      Less:
     8. General administrative expenses
      a) Staff costs
      -Wages and salaries ...................................................... (213,726,233.84)                                     (206,641,231.60)
      -Social security costs..................................................... (53,970,308.57)                                      (51,420,996.73)
      -Other charges............................................................... (62,168,404.76) (329,864,947.17)                   (66,033,943.10) (324,096,171.43)
      b) Other administrative expenses .................................                            (111,257,073.36) (441,122,020.53)                  (106,086,062.31) (430,182,233.74)
      Less:
     9. Depreciation and amortisation ....................................                                            (33,342,047.88)                                    (28,836,004.77)
     10. Other operating expenses .........................................                                            (2,658,250.63)                                      (2,555,756.02)
     11+12. Valuation differences of amounts due and provisions
       for contingent liabilities ................................................                                    (77,047,000.00)                                    (66,197,212.11)
     Net operating profit..........................................................                        113,362,200.30                                               366,046,534.97
       Plus:
     15. Extraordinary income.................................................                               4,544,763.98                                                13,336,962.30
       Less:
     16. Extraordinary expenses .............................................                               (3,872,429.87)                                               (6,685,924.47)
       Plus:
     17. Extraordinary profit ....................................................                           4,155,444.09                                                 1,341,464.97
     18. PROFIT (before tax)...................................................                            118,189,978.50                                               374,039,037.77




68
                                                                            APPROPRIATION ACCOUNT
                                                                                       (Amounts in euros)
                                                                                                           Fiscal Year                           Fiscal Year
                                                                                                              2002                                  2001

Profit before tax ............................................................                             118,189,978.50                             374,039,037.77
 Plus:
Prior years' retained earnings brought forward ..........                                                          33,733.38                               20,170.74

TOTAL...........................................................................                           118,223,711.88                             374,059,208.51

 Less:
1. Income tax................................................................                               (30,265,093.68)                           (90,500,815.58)
2. Other taxes not included in operating expenses ....                                                       (1,808,539.30)                              (721,769.25)

TOTAL PROFIT FOR DISTRIBUTION...........................                                                    86,150,078.90                             282,836,623.68

Appropriation of profit:
1. Statutory reserve ......................................................                                  4,305,817.27                              14,140,822.65
2. Dividend (0.40 Euro per share) ...............................                                           32,546,582.40                             119,632,503.20
2a. Treasury shares reserves.......................................                                         27,071,517.08                                         ––
5. Special and Extraordinary Reserves........................                                                          ––                              85,605,282.47
6. Tax-exempt reserves ................................................                                      8,608,474.40                              56,933,235.51
6a. Reserves from untaxed or taxed
 in a special way income.............................................                                       11,647,730.69                                         ––
6b. Special reserves.....................................................                                    1,888,900.37                               3,362,683.79
7. Board of Directors' fees ...........................................                                         81,056.69                                  85,810.71
7a. Staff bonus .............................................................                                          ––                               3,042,551.97
8. Retained earnings carried forward ..........................                                                        ––                                  33,733.38

TOTAL...........................................................................                            86,150,078.90                             282,836,623.68


                                                                                       Athens, February 21, 2003
                    THE CHAIRMAN OF THE BOARD                                      THE VICE-CHAIRMAN OF THE BOARD              THE MANAGER OF THE
                      AND MANAGING DIRECTOR                                             AND GENERAL MANAGER                    ACCOUNTING DIVISION


                        IOANNIS A. STOURNARAS                                           GEORGIOS I. MICHELIS                   GEORGIOS CH. MELETIS




                                                                                                                                                                        69
                                               AUDITORS’ REPORT
                   To the Shareholders of "COMMERCIAL BANK OF GREECE S.A."

     We audited the above Financial Statements and the related Appendix of the ‘COMMERCIAL BANK OF GREECE S.A.’
     for the financial period ended on December 31, 2002. Our audit, in the context of which we were also notified of the
     full accounting report of the Bank's branches' activities, was carried out in accordance with the provisions of article 37,
     C.L. 2190/1920 ‘for Sociétés Anonymes’ and the audit procedures we considered appropriate, on the basis of the
     principles and auditing standards followed by the Institute of Certified Public Accountants of Greece which are
     consistent with the basic principles of International Standards of Auditing. We were given access to the books and data
     maintained by the Bank and were given the necessary information and clarifications we requested. The Bank applied
     correctly the Special Accounting Plan for Banks. The valuation method did not differ from the method applied in the
     previous financial period, with the exception of notes no. 7 and 8 of the Bank shown under the Balance Sheet. We
     confirmed the agreement of the contents of the Board's Management Report to the Ordinary General Meeting of the
     Bank’s Shareholders with the contents of the related Financial Statements. The Appendix includes the information
     required under para. 1, article 43a and article 129, C.L. 2190/1920. In our opinion, the above Financial Statements as
     they arise from the Bank's books and records represent together with the Appendix, after taking into consideration
     notes no. 7 and 8 of the Bank shown under the Balance Sheet, the asset structure and the financial position of the
     Bank on December 31, 2002 and the Profit and Loss Account for the financial period ended on that date, based on the
     relevant provisions in force and on the accounting principles and methods applied, which are generally accepted and
     do not differ from those applied by the Bank in the previous financial period, with the exception of notes no. 7 and 8
     of the Bank.

                                                   Athens, February 25, 2003
                                            The Certified Public Accountants-Auditors



                    STYLIANOS M. XENAKIS            GEORGIOS K. XENOKTISTAKIS              NIKOLAOS E. VOUNISEAS
                      SOEL Reg. No. 11541               SOEL Reg. No. 14171                  SOEL Reg. No. 18701

                                ‘SOL S.A.’ CERTIFIED AUDITORS                                  KPMG KYRIACOU
                                                                                            CERTIFIED AUDITORS S.A.




70
                                                                           (S.A. Reg 6064/06/B/86/03)
              9th CONSOLIDATED BALANCE SHEET OF DECEMBER 31, 2002
OF THE COMPANIES OF THE GROUP THAT BELONG TO THE FINANCIAL SECTOR
     ASSETS                                                                                                               Fiscal Year                              Fiscal Year
                                                                                                                                2002                                     2001

     1. Cash in hand and balances with the Central bank..                                                             516,369,155.81                           954,445,449.86
     2. Treasury bills and other securities eligible
      for refinancing with central bank:
        a) Treasury bills and similar securities ..........................                        9,958,890.99                           20,298,283.30
        b) Other securities acceptable for refinancing..............                               4,495,448.00        14,454,338.99       2,434,031.10         22,732,314.40
     3. Amounts due from credit institutions
        a) On demand................................................................             24,282,686.22                            15,314,103.51
        b) Other amounts...........................................................             418,549,730.91                           884,511,536.63
        Less: Provisions for doubtful debts ..............................                          (53,392.00)       442,779,025.13       (721,010.81)        899,104,629.33
     4. Loans and advances to customers
        a) Loans..........................................................................    10,113,391,962.25                         8,623,737,503.30
        b) Other amounts due from customers.........................                             338,716,923.59                           375,914,621.54
      Less: Provisions for doubtful debts................................                       (283,482,978.79) 10,168,625,907.05       (263,125,299.15)    8,736,526,825.69
     5. Bonds and other fixed-yield securities issued by the:
        a) Governmnet ...............................................................          3,898,123,927.90                         5,163,653,377.56
        b) Other issuers .............................................................           446,505,213.70     4,344,629,141.60      292,993,136.78     5,456,646,514.34
     6. Shares and other variable-yield securities...............                                                     306,091,068.11                           728,070,304.95
     7. Participations in non-affiliated companies ...............                                                    129,985,561.86                           142,417,092.75
     8. Participations in non-consolidated companies........                                                           75,493,408.33                           244,783,951.09
     9. Intangible assets
        a) Establishment and foundation expenses..................                               22,339,882.42                             22,685,400.89
        b) Goodwill.....................................................................         59,953,044.75                                      0.00
        c) Other intangible assets..............................................                 80,573,097.67                             62,574,499.46
      Less: Amortisation of intangible assets..........................                        (110,243,991.15)        52,622,033.69      (38,574,313.42)       46,685,586.93
     10. Tangible assets
        a) Land ...........................................................................                            61,583,485.33                            59,569,635.37
        b) Buildings ....................................................................        167,832,230.91                           158,115,280.38
      Less: Depreciation .........................................................              (86,125,105.64)        81,707,125.27     (76,503,092.53)        81,612,187.85
      c) Furniture, electronic & other equipment.....................                            191,006,429.54                           164,608,616.25
        Less: Depreciation.........................................................            (123,172,423.02)        67,834,006.52    (108,302,575.31)        56,306,040.94
      d) Other tangible assets..................................................                 244,605,319.04                           252,873,903.70
      Less: Depreciation ..........................................................             (108,227,666.81)      136,377,652.23     (109,790,319.71)      143,083,583.99
        e) Fixed assets under construction and advances
        for purchases of fixed assets........................................                                          41,893,111.41                            30,763,617.44
     12. Other assets ...............................................................                                 389,156,581.33                           446,305,169.17
     13. Prepayments and accrued income..........................                                                      61,843,516.58                            94,092,494.95

        TOTAL ASSETS.............................................................                                  16,891,445,119.24                        18,143,145,399.05

     OFF-BALANCE SHEET ACCOUNTS
     1. Contingent liabilities and commitments
        a) From accepting and discounting bills ......................                               95,936.00                                      0.00
        b1) Guarranties and assets pledged as
      collateral security.............................................................         1,402,296,097.82                         1,290,801,233.48
      b2) Non-utilized credit margins.......................................                   2,542,240,934.10                         1,329,484,396.01
        b3) Interest rate contracts..............................................                740,036,379.97                            74,392,000.00
        b4) Exchange rate contracts .........................................                     23,919,593.90                           150,178,709.04
        b5) Other ........................................................................       252,848,890.45     4,961,437,832.24      148,006,130.14     2,992,862,468.67
     2. Obligations resulting from temporary
      assignment transactions...............................................                                        3,227,975,984.89                         3,671,487,625.29
     3. Other off-balance sheet items
        a) Beneficiaries of third party assets .............................                   3,212,152,370.97                         3,286,491,936.50
        b) Obligations from bilateral agreements......................                         4,409,830,869.84                         1,152,886,979.90
        c) Credit memorandum accounts .................................                        8,987,209,087.35 16,609,192,328.16       2,020,069,597.10     6,459,448,513.50

       TOTAL OFF-BALANCE SHEET ACCOUNTS ...............                                                            24,798,606,145.29                        13,123,798,607.46



                                                                                                                                                                                 71
              LIABILITIES                                                                                                                  Fiscal Year                                                 Fiscal Year
                                                                                                                                                 2002                                                        2001

              1.      Amounts due to credit institutions
                      a) On demand..........................................................            60,686,701.75                                               64,221,712.34
                      b) Time and at notice ..............................................          1,891,428,497.01                                             1,951,649,888.77
                      c) Other ....................................................................     27,678,521.23             1,979,793,719.99                  41,192,610.33             2,057,064,211.44
              2.      Amounts due to customers
                      a) Deposits...............................................................    9,625,100,346.09                                             9,565,271,457.49
                      b) Other
                      ba) On demand .......................................................           186,170,447.63                                               224,832,074.81
                      bb) Time and at notice ............................................             102,663,834.84                                                   885,855.91
                      bc) Repos.................................................................    3,382,359,082.03            13,296,293,710.59                3,802,459,939.50 13,593,449,327.71
              3.      Liabilities on debt instruments
                      b) Other debt instruments .......................................                                                  573,414.76                                                   73,358.76
              4.      Other liabilities .......................................................                                      335,439,094.94                                              467,481,043.59
              5.      Accruals and deferred income .............................                                                      46,554,512.01                                               41,815,024.35
              6.      Provisions against contingent liabilities and charges
                      a) Provisions for staff pensions and similar
                      obligations................................................................        2,223,924.41                                                 1,611,603.37
                      b) Provisions for taxation.........................................                1,134,059.00                                                   683,585.06
                      c) Other provisions .................................................              9,054,690.40                 12,412,673.81                   7,562,150.56                  9,857,338.99
              8.      Paid-up capital........................................................         429,658,380.00                                               427,258,940.00
              9.      Share premium account........................................                   278,392,248.76                                               278,392,248.76
              10.     Reserves .................................................................      521,467,310.81                                             1,221,714,902.72
              11.     Treasury shares .....................................................           (89,227,624.42)                                                 (237,479.09)
              12.     Treasury shares reserves .....................................                    27,071,517.08                                                         0.00
              13.     Fixed assets revaluation reserve .........................                         7,219,349.04                                              (30,388,502.38)
              14.     Retained earnings..................................................                4,664,536.87                                               (3,442,636.10)
              15. Translation reserve................................................                  (8,508,693.00)                                                  1,343,367.33
              16. Consolidation differences.....................................                       (4,387,603.00)                                                  1,251,479.91
              17. Minority interests ...................................................                54,028,571.00             1,220,377,993.14                   77,512,773.06            1,973,405,094.21

                      TOTAL LIABILITIES................................................                                        16,891,445,119.24                                            18,143,145,399.05




     NOTES:
     I. The financial sector companies that have been included in the consolidated accounts besides the Commercial Bank of Greece are: 1. Investment Bank SA. 2. Commercial Bank of Greece (Germany) GmbH. 3.
     Commercial Investments SA. 4. Commercial Capital Group SA. 5. Ermis Mutual Fund Management SA. 6. Commercial Leasing SA. 7. Commercial Assets-Liabilities Management & Liquidation SA. 8. Commercial
     Factoring SA. 9. Commercial Bank of Greece (Romania) S.A. 10. Commercial Bank of Greece (Georgia) S.A. 11.Commercial Bank of Greece (Bulgaria) A.D. 12. Commercial Bank of Greece (Armenia) C.J.S.C. 13.
     Commercial Bank of Greece (Albania) S.A. 14. Commercial Bank of Greece (Cyprus) Ltd and for the first time the companies (a) Commercial Real Estate and (b) Emporiki Asset Management SA which in the previous
     financial period 2001 were presented at cost. We note that International Commercial Bank (Moldova) SA (which had been consolidated in the previous financial period 2001) has not been consolidated because it is
     under liquidation.
     2. In the current financial period 2002, the companies Commercial Securities SA and Metrolife Securities SA were merged and absorbed by the Investment Bank SA. In the previous financial period 2001, Commercial
     Securities had been fully consolidated while Metrolife Securities SA had been consolidated on the basis of the net equity method.
     3. The item "Participation in non consolidated companies", equal to EUR 75,493,408.33, concerns subsidiaries outside the financial sector which have been consolidated on the basis of the net equity method. We note
     here that the reduction in the participation in a subsidiary of an amount EUR 31 million has been netted off against the "Reserves" account of Net Equity.
     4. According to article 2 paragraph 1 of Law 2992/2002 losses from the valuation of shares, bonds, mutual fund units and derivative contracts of the Bank of a total amount EUR 542.4 million have been netted off against
     the account "Special Tax Exempt Reserves from Securities" which is part of the "Reserves" item in Net Equity.
     5. Losses from the sale and valuation of shares of companies listed on the Athens Stock Exchange that are included in the portfolio of subsidiary companies of a total amount of aprroximately EUR 51million have directly
     affected net equity. From these an amount EUR 28 million concerns the consolidated results of the Group.
     6. Provisions against potential losses from bad and doubtful customers of the Group are in our view adequate.
     7. The net balance of treasury shares (after taking into account the reserve shown in the appropriation account) EUR 62,156,107.34 appears in the liabilities side as a deduction from net equity.
     8. The fixed assets of the consolidated companies of the Group are free of charges and pledges.
     9. Legal disputes or disputes before arbitration are not likely to have a significant impact on the financial position of the consolidated companies of the Group.
     10.The number of employees of the Group on the 31st December 2002 was 7679.
     11. In 2002, following the decisions of the General Meetings of the 15th of June 2001 and the 17th June 2002, there was a share capital increase of EUR 2,399,440.00 through cash payment arising from the exercise
     of the rights on stock options from the Bank’s employees.
     12. The main accounting principles followed on the 31st of December 2002 are the same as those followed by usual practice.
     13. Some items of the consolidated balance sheet and the consolidated profit & loss account for year 2001 have been restated to become consistent with the corresponding items for 2002.




72
                               CONSOLIDATED PROFIT AND LOSS ACCOUNT
           December 31, 2002 (January 1, 2002 - December 31, 2002) (Amounts in euros)
                                                                                                       Fiscal Year                           Fiscal Year
                                                                                                             2002                                  2001
1. Interest and similar income
   -Interest income from fixed-income securities..............                   250,005,428.18                       314,087,834.60
   -Other interest and similar income................................            722,066,409.74    972,071,837.92     709,920,820.05    1,024,008,654.65
Less:
2. Interest expenses and similar charges.....................                                      (411,311,586.93)                      (514,482,381.34)
                                                                                                    560,760,250.99                        509,526,273.31
Plus:
3. Income from securities
   a) Income from shares and other
 variable-yield securities ...................................................    19,264,654.68                        21,859,632.89
 b) Income from participating interests,...........................                  380,102.00                           275,390.24
 c) Income from participations in affiliated companies......                       1,919,747.73                        19,000,704.04
Plus or Less:
 d) Incorporation of the results of non-consolidated
 companies of the Group .................................................        (29,656,625.00)    (8,092,120.59)     (4,434,782.09)     36,700,945.08
4. Fee and commission income .....................................               159,801,267.82                       158,769,357.78
Less:
5. Fee and commission expenses..................................                 (14,139,836.88)   145,661,430.94     (18,518,698.44)    140,250,659.34
Plus:
6. Income from financial transactions ...........................                                   46,943,112.52                        172,961,010.03
Plus:
7. Other operating income ..............................................                            21,961,916.16                         16,238,961.47
                                                                                                   767,234,590.02                        875,677,849.23




                                                                                                                                                            73
                                                                                                                   Fiscal Year                              Fiscal Year
                                                                                                                         2002                                     2001

                                                                                                             767,234,590.02                            875,677,849.23
             Less:
      8.     General administrative expenses
             (a) Staff costs
         -Wages and salaries....................................................          (236,119,922.39)                          (220,057,772.95)
         -Social security costs ..................................................         (56,972,080.61)                           (53,758,101.64)
         -Other charges.............................................................       (63,971,567.15)   (357,063,570.15)        (68,491,982.28)   (342,307,856.87)
             (b) Other administrative expenses .......................                                       (126,416,544.24)                          (118,486,073.15)
             Less:
      9.     Depreciation and amortisation ..........................                                        (104,055,040.20)                           (93,576,222.58)
     10.     Other operating expenses..................................                                        (4,430,115.69)                            (3,764,775.94)
     11+12. Valuation differences of amounts due and
             provisions for contingent liabilities .................                                          (84,971,106.87)                           (72,172,914.94)
             Less:
     13+14. Value adjustments on securities held
             as fixed assets.....................................................                              (5,986,220.00)                           (15,233,372.74)
             Net operating profit.............................................                                 84,311,992.87                            230,136,633.01
     15.     Extraordinary income..........................................                                      6,712,946.18                             20,824,341.64
     16.     Extraordinary expenses......................................                                       (5,386,087.18)                            (7,851,030.16)
     17.     Extraordinary profit.............................................                                   3,976,413.17                                117,817.05
     18.     Profit (before tax) ................................................                              89,615,265.04                           243,227,761.54
             Less: Tax & other fiscal burdens..........................                                      (36,152,633.00)                           (94,552,079.48)
             Net profit (after tax) ............................................                               53,462,632.04                           148,675,682.06
             Less: minority interests (after tax) ........................                                    (1,213,769.24)                             (2,425,156.35)
             Group net profit after tax....................................                                    52,248,862.80                           146,250,525.71

                                                                                       Athens, February 21, 2003
                    THE CHAIRMAN OF THE BOARD                               THE VICE-CHAIRMAN OF THE BOARD                       THE MANAGER OF THE
                      AND MANAGING DIRECTOR                                      AND GENERAL MANAGER                             ACCOUNTING DIVISION


                        IOANNIS A. STOURNARAS                                          GEORGIOS I. MICHELIS                      GEORGIOS CH. MELETIS




74
                                            AUDITORS’ REPORT
       To the Shareholders of the "COMMERCIAL BANK OF GREECE S.A." and its subsidiaries

We audited, in accordance with the provisions of article 108 of C.L. 2190/1920 "for Sociétés Anonymes", the 9th Consolidated
Balance Sheet and the Consolidated Profit & Loss Account, as well as the related Appendix, of the "COMMERCIAL BANK OF
GREECE S.A." and its subsidiaries for the financial period ended on 31 December 2002. For the purposes of our audit, we applied
the procedures we considered appropriate, which comply with the principles and auditing standards followed by the Institute of
Certified Public Accountants of Greece, and confirmed the agreement of the contents of the Consolidated Management Report with
the above consolidated financial statements. In our opinion, after taking into account notes no. 3, 4 and 5 of the Bank which are
presented under the Consolidated Balance Sheet, the above consolidated financial statements have been prepared in accordance
with the provisions of C.L. 2190/1920 and accurately reflect the asset structure, the financial position and the results of all the
companies included in the consolidation of 31.12.2002, based on the relevant provisions in force and on the accounting principles
and methods applied by the holding Bank, which are generally accepted and do not differ from those applied by the Bank in the
previous financial period, with the exception of notes no. 3, 4 and 5 of the Bank.



                                                   ATHENS, February 25, 2003

                                      THE CERTIFIED PUBLIC ACCOUNTANTS- AUDITORS



                STYLIANOS M. XENAKIS              GEORGIOS K. XENOKTISTAKIS                 NIKOLAOS E. VOUNISEAS
                  SOEL Reg. No. 11541                 SOEL Reg. No. 14171                     SOEL Reg. No. 18701

                             ‘SOL S.A.’ CERTIFIED AUDITORS                                     KPMG KYRIACOU
                                                                                            CERTIFIED AUDITORS S.A.




                                                                                                                                      75
                                SUMMARY OF THE MINUTES
              OF THE ANNUAL ORDINARY GENERAL MEETING OF THE SHAREHOLDERS
                         OF THE COMMERCIAL BANK OF GREECE S.A.



        April 24, 2003


        The Ordinary General Meeting of the Shareholders of the Commercial Bank of Greece was held on
     April 24, 2003. The Meeting was attended by shareholders and the representatives thereof, representing
     56,741,150 shares out of a total of 85,931,676 shares.


        The General Meeting:
        ñ Approves and ratifies the submitted Financial Statements for the financial period 2002 and the
     related Profit and Loss Account as prepared and published by the Board of Directors.
        ñ Declares a dividend of 0.40 Euro per share payable for the financial period 2002.
        ñ Releases by vote, effected by roll-call, the members of the Board and the auditors from any liability
     for damages relating to the financial period 2002.
        ñ Approves and grants, in accordance with article 23, para. 1, C.L. 2190/1920, permission to members
     of the Board and managers to participate in the Boards or in the Management of Group companies
     pursuing objectives similar or related to those of the Bank.
        ñ Approves the emoluments paid to the members of the Board for the year 2002, and approves in
     advance the fees of the members of the Board for the year 2003, which also include fees and other
     remunerations of the non-executive members and of the independent members of the Board who are also
     members of the Audit Committee.
        ñ Elects the four independent members of the Board for the remaining tenure of the members of the
     Board.
        ñ Appoints the firms ‘SOL’ S.A. Certified Auditors and KPMG KYRIACOY Certified Auditors S.A. and
     elects in total three regular and three substitute Auditors for the year 2003.
        ñ Approves the amendment to articles 1 and 5 of the Articles of Association of the Bank and their
     Codification.


                                                Athens, April 24, 2003.


                                                     The Chairman


                                                 Ioannis A. Stournaras




76

				
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