In its announcement, Attica Bank outlines the main terms and key points of the merger with Pankritia and the benefits for its shareholders. The merger is anticipated to be completed around mid-September 2024, although this depends on various unsettled factors and may change. The Bank has also initiated the securitization process of a portfolio of non-performing exposures with a total book value of €2.3 billion.

Detailed Announcement from Attica Bank:

Following the July 18, 2024 Shareholders Agreement (the “Agreement”) between the Financial Stability Fund and Thrivest Holding Ltd (together, the “Shareholders”), the Bank initiated the necessary actions to implement the specific provisions of the Agreement and the commitments of the Shareholders for the capital strengthening of the credit institution that will emerge from the merger between Attica Bank and Pankritia Bank (“New Bank”). This is to implement the business plan of the New Bank and cover the additional capital needs arising from the portfolios of non-performing exposures of the two banks included in the government guarantee program “Heracles III.”

In this context:

(a) The Bank has initiated the securitization process of a portfolio of non-performing exposures with a total book value of €2.3 billion, and the inclusion of the high-priority bonds of the securitization in the “Heracles III” State Guarantee Program, with a total value of €750 million.

(b) The Bank’s Board of Directors decided to initiate the merger process between Attica Bank and Pankritia Bank, with Attica Bank absorbing Pankritia Bank, in accordance with the relevant provisions of corporate law, Law 2515/1997, and Law 4601/2019 as applicable (the “Merger”). A corresponding decision to initiate the Merger procedures was also taken by the Board of Directors of Pankritia Bank.

A. Basic Terms of the Merger

The transformation balance sheet date will be December 31, 2023, and the proposed exchange ratio (the “Swap Ratio”) will be calculated with the combined companies apportioned at 90% for Attica Bank and 10% for Pankritia Bank, based on an analysis and recommendation by the international independent financial organization UBS, which acts as the Bank’s financial advisor for the Merger.

The Swap Ratio is subject to the receipt by the Boards of Directors of Attica Bank and Pankritia Bank of fairness opinions from independent certified public accountants as appointed, in accordance with the provisions of Law 2515/1997 and Law 4601/2019.

Completion of the Merger is subject to the approval by each of the General Meetings of the merging companies and the receipt of the legally required licenses and approvals from the competent authorities, in accordance with applicable legislation.

B. Main Points of the Transaction

The Merger will bring significant benefits to Attica Bank and its shareholders:

• It is a necessary action for the subsequent capital reinforcement of the credit institution resulting from the Merger, in accordance with the commitments and as provided for in the Shareholders’ Agreement.
• It will lead to the creation of a single financial institution expected to have an MEA ratio below 3%, by virtue of including the MEA portfolios of the two credit institutions in the Heracles III State Guarantee Program.
• With the intended merger and integration of assets, customers, branches, and personnel of Pankritia Bank, Attica Bank will further increase its competitiveness against other banks, significantly expand its network and operations across the country, and increase its turnover and profitability.
• It will lead to economies of scale in administrative expenses and generally reduce operating costs while maximizing the efficiency of the administrative organization of the merging credit institutions.

C. Rights of TXF

The special rights of the Financial Stability Fund (“TFS”), as provided for in Law 3864/2010 and in the Framework Agreement between Attica Bank and the TFS (RFA), do not change.

D. Indicative Schedule of the Merger

The Merger is expected to be completed by mid-September 2024, subject to receipt of all necessary corporate approvals.