On October 1st 2006, a Sunday wide in circulation national greek newspaper, published an article which evokes questions on the investments of Greek Postal Savings Bank. The article is based on the interim financial statements of the Bank, dated June 30, 2006 and totally misinterprets certain vital areas on the investments. The purpose of this write up is for the Bank to clarify the following:

OVERALL

As announced in detail through the consecutive presentations in Greece and abroad, Greek Postal Savings Bank is currently at a stage in which is restructuring its Assets. The bank, is gradually replacing its portfolio of government bonds and other alternative placements with housing and consumer loans to customers, thus increasing and expanding its product equity and penetration into the greek market.

Before this restructuring began, the bank has experienced a period of excess liquidity in an environment of low interest rates - during which in many cases, its placements were lower than the norm of these rates-.

According to the international banking practice, it is common and vital for the banks, consequently for GPSB, to seek alternative placements in order to achieve greater return on capital and higher profitability by examining the degree of risk of such investments.

Arbitrary and aphoristic articles and reports stating that structured risk products contain a very high degree of risk and constitute "a roll of the dice" and "risky placements" on behalf of the Greek Postal Savings Bank do not have any significance whatsoever. Loans with a fixed interest rate or other forms of banking placements, such as for example bonds with fixed interest rates, may be, on their own, very risky investments.

Specifically, and according to its published interim financial statements of 30 June 2006, the Greek Postal Savings Bank would like to inform investors and interested parties of the following:

1. The Bank's investments in structured risk products, in estimated values, amount to 607,39 million Euros and not 690,41 million Euros as noted in the said article and concern the financial statements of 31 December 2005. The aforementioned amount is equally allocated among CDOs, Hedge Funds, interest rate structures and other similar products. The degree of risk of these investments is relatively restricted since more than 90% of the CDOs have a high credit rating (AA and AAA), Hedge Funds are Funds of Hedge Funds and are market neutral and the objective risk of interest rate structures is mainly that of long-term government issues. It should be noted that both the issuers and administrators of the aforementioned investments are highly prestigious and have a high credit rating according to Moody's and S&P.

We should note that the return of all of the aforementioned alternative investments is approximately 100 bps (1%) above the euribor. We should also note that by liquidating the investments of this part of its portfolio, the Bank realised profits in the amount of 13,5 million Euros during the first semester of 2006, while with regard to the aforementioned policy relating to the replacement of alternative investments with housing and consumer loans the amount thereof, from 31 December 2005 to 30 June 2006, was restricted to 83 million Euros. The Bank's alternative investments, in their entirety, as of 30 June 2006, are estimated beyond 100% of their value, in other words they contain goodwill.

2. The article's reference to the Bank's investments in derivatives of a nominal value of 2,253 million Euros as "risky" may only be characterised as such due to the fact that these derivatives (primarily interest rate swaps) offset the interest rate risk of corresponding government bonds with a fixed interest rate and housing and consumer loans with a fixed interest rate. Given the continuous increase in interest rates, the Bank, in essence, has insured its profits and avoids future losses. The use of interest rate swaps is the sole and internationally acceptable method of offsetting interest rate risk.

3. The article also states that the Bank's investments in government bonds amount to 694,8 million Euros, which, however, concerns the financial statements of 31 December 2005. The Bank's investments in government bonds as of 30 June 2006 amounted to 608,04 million Euros. It should be clarified that this amount refers solely to the Bank's commercial (trading) portfolio and has not taken into consideration total investments in government bonds (domestic or international issues), which, as of 30 June 2006, amounted to 4,122.15 million Euros.

4. The article's attempt to link "risky" investments with owner's equity is unfounded and creates erroneous impressions due to the fact that all investments must be taken into consideration in estimating the Bank's capital adequacy ratio, which, as of 30 June 2006, amounted to 13.32%, which is one of the highest in the domestic banking sector. Consequently, the Bank does not lack any capital as a result of its investments.

5. In addition, the article states that the Bank has invested an amount of 100 million Euros in corporate bonds that solely concerns its commercial (trading) portfolio. The truth, however, is that the Bank has proceeded in significant investments in corporate bonds that, in their entirety, amounted to 637,35 million Euros as of 30 June 2006 and that concern, without exception, issuers with a high credit rating (investment grade).

6. Finally, the article's reference to the Bank's inexperience ("no experience") due to the recent acquisition of an operating licence is not valid due to the fact that the Bank employed and employs reliable and experienced executives from both the Greek Postal Savings Bank and the banking sector who are active in the area of investment management, it employs mechanisms that outline investment strategies and tactics, as well as approval procedures, criteria and limits.

In conclusion, all banking investments (loans, bonds, shares and other investments) contain a high degree of risk and any reference to a smaller or larger degree of risk is evaluated based on banking criteria. A "good" bank assumes a controlled risk and creates goodwill for its shareholders.