Marfin Popular Bank Public Co. Ltd. : Marfin Popular Bank: Strengthening its Provision Reserves

PRESS RELEASE Marfin Popular Bank: Strengthening its Provision Reserves

The intensifying Greek Sovereign debt crisis and the implemented drastic austerity measures have given rise to an unabated deterioration across all market sectors of the Greek economy which warrants for a reinforcement of the prudent provisioning policy applied by the Marfin Popular Bank Group.
As a result, provisions for loan impairments for the financial year 2011, relating mainly to the Greek Operations, are expected to be higher compared with the previous year and, by extension, the Goodwill relating to the Greek Operations is expected to be impaired to reflect the above developments. It is noteworthy that as per Central Bank of Cyprus' regulations, goodwill is already deducted from the Group´s capital base and, as a result, any impairment of goodwill, will not affect any harmful effects on the existing regulatory capital of the Group.
In response to the effect on profitability arising from the increased provisions, Marfin Popular Bank, has applied decisive controls for 2012 on costs and is planning reformation of its branch network across all geographical areas, whilst a recalibration plan for the Greek Operations is under study. The implementation of the plan during 2012, is expected to deliver significant cost rationalisation on the ground and crystallise synergies and savings at Group level.
In parallel to the accelerated cost cutting efforts, Marfin Popular Bank is refocusing on its own
domestic market which constitutes the bulk of its' strong franchise value.
The Group feels confident that its core business sectors, International Business Banking, Retail banking and Corporate and Commercial banking will continue to deliver strong operating profitability underpinned by the significant potential arising from the established hydrocarbon reserves and the prospects of the island becoming a regional energy hub and an alternative gateway to Europe.
Marfin Popular Bank will publish its preliminary results for 2011 before the end of February 2012.
Nicosia 18/1/2012