NBG » Topics » Non-performing loans have had a negative impact on our operations and may continue to do so.

This excerpt taken from the NBG 20-F filed Jul 15, 2009.

Non-performing loans have had a negative impact on our operations and may continue to do so.

        Non-performing loans represented approximately 2.8% of our total customer loans portfolio as at December 31, 2008. Since then, this percentage has increased. See Item 4.E, "Selected Statistical Data—Credit Quality and Risk Management—Non-Performing Loans, Allowance for Loan Losses, and Loan Loss Experience" and Item 5.A, "Operating and Financial Review and Prospects—Key Factors Affecting our Results of Operations—Non-Performing Loans". The effect of the continuing deterioration of global macroeconomic conditions on the regions in which we operate will lead to additional non-performing loan generation during the second quarter and for the remainder of 2009. Our current credit approval and monitoring procedures focus on the borrower's cash flow and ability to repay in an effort to improve the quality of our loan assets and mitigate future allowances for loan losses. However, we cannot assure you that these credit approval and monitoring procedures will reduce the amount of provisions for loans that become non-performing in the future. In addition, the outlook for the global economy in 2009 and 2010 remains unstable for the economies of Greece, Turkey and SEE. This may

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result in adverse changes in the credit quality of our borrowers, with increasing delinquencies and defaults. Future provisions for non-performing loans could have a materially adverse effect on our operating results.

This excerpt taken from the NBG 20-F filed May 27, 2008.

Non-performing loans have had a negative impact on our operations and may continue to do so.

        Non-performing loans represented approximately 3.0% of our total loan portfolio as at December 31, 2007. As a result of certain tax and legal considerations, non-performing loans generally remain on our balance sheet significantly longer than for other banks in the EU. See Item 4.E, "Business Overview—Selected Statistical Data—The Group's Treatment of Non-Performing Loans".

        Our current credit approval and monitoring procedures focus on the borrower's cash flow and ability to repay in an effort to improve the quality of our loan assets and mitigate future allowances for loan losses. However, we cannot assure you that these credit approval and monitoring procedures will reduce the amount of provisions for loans that become non-performing in the future. Future provisions for non-performing loans could have a materially adverse effect on our operating results. In addition, a downturn in the global economy would potentially result in a higher proportion of non-performing loans.

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This excerpt taken from the NBG 20-F filed Jul 2, 2007.

Non-performing loans have had a negative impact on our operations and may continue to do so.

Non-performing loans represented approximately 3.4% of our total loan portfolio as at December 31, 2006. As a result of certain tax and legal considerations, non-performing loans generally remain on our balance sheet significantly longer than for other banks in the EU. See Item 4.E, “Business Overview—Selected Statistical Data—The Group’s Treatment of Non-Performing Loans”.

Our current credit approval and monitoring procedures focus on the borrower’s cash flow and ability to repay in an effort to improve the quality of our loan assets and mitigate future provisions for non-performing loans. However, we cannot assure you that these credit approval and monitoring procedures will reduce the amount of provisions for loans that become non-performing in the future. Future provisions for non-performing loans could have a materially adverse impact on our operating results. In addition, a downturn in the global economy would potentially result in a higher proportion of non-performing loans.

This excerpt taken from the NBG 20-F filed Jul 14, 2006.

Non-performing loans have had a negative impact on our operations and may continue to do so.

Non-performing loans represented approximately 4.7% of our total loan portfolio as at December 31, 2005. As a result of certain tax and legal considerations, non-performing loans generally remain on our

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balance sheet significantly longer than for other banks in the EU. See Item 4.E, “Business Overview—Selected Statistical Data—The Group’s Treatment of Non-Performing Loans”.

Our current credit approval and monitoring procedures focus on the borrower’s cash flow and ability to repay in an effort to improve the quality of our loan assets and mitigate future provisions for non-performing loans. However, we cannot assure you that these credit approval and monitoring procedures will reduce the amount of provisions for loans that become non-performing in the future. Future provisions for non-performing loans could have a materially adverse impact on our operating results. In addition, a downturn in the global economy would potentially result in a higher proportion of non-performing loans.

This excerpt taken from the NBG 20-F filed Jul 15, 2005.

Non-performing loans have had a negative impact on our operations and may continue to do so.

        Non-performing loans continue to negatively impact our operating results, as they have in the past. Non-performing loans represented approximately 5.2% of our total loan portfolio as at December 31,

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2004. Our level of non-performing loans is higher than that of many other banks in the EU. Key factors that have historically contributed to our high level of non-performing loans include:

    recession in the Greek economy, which affected many borrowers in the early 1990s;

    government influence over lending policies, including:

    government and central bank regulations requiring lending to specific sectors of the economy;

    requirements that the Bank extend loans to troubled companies considered to be important to the Greek national interest;

    over-reliance on borrowers' collateral, rather than cash flows, as a measure of creditworthiness for approving and monitoring loans; and

    inadequate procedures for monitoring troubled loans.

        Also, as a result of certain tax and legal considerations, non-performing loans generally remain on our balance sheet significantly longer than for other banks in the EU.

        To improve the overall quality of our loan portfolio, we have enhanced our methods of providing for losses inherent in our portfolio and increased the level of write-offs we take for non-performing loans. We began gradually introducing revised credit approval and monitoring procedures in 1998 to help improve the quality of our loan assets and mitigate against future non-performing loans. These new procedures focus on the borrower's cash flow and ability to repay. However, we cannot assure you that these credit approval and monitoring procedures will reduce the amount of loans that become non-performing in the future, or that these future non-performing loans will not have a material negative impact on our operating results in future periods. In addition, a downturn in the global economy is outside our control and would likely result in a higher proportion of non-performing loans. See Item 4.E, "Selected Statistical Data—Credit Quality—Non-Performing Loans, Loan Loss Provisions and Loan Loss Experience."

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