The Bank of Greece posted a 5.8 percent drop in 2004 net profit after provisions, hit by the strong euro and low interest rates, the country’s central bank announced yesterday. Net profit stood at 205.6 million euros ($276.2 million), down from 218.3 million euros in 2003. Net profit before provisions rose 20 percent to 288.1 million euros. The bank said it more than tripled provisions for future pension fund contributions to 35 million euros from 10 million. Net interest income rose 20.3 percent to 325.9 million euros, while commissions and other income increased 16.5 percent to 268.8 million euros. Trading income fell 86 percent to 3.9 million euros as unrealized losses of 68.2 million euros weighed after the bank valued its foreign exchange and bond holdings in line with European Central Bank accounting rules. The bank will propose a dividend of 2.85 euros per share to shareholders at the annual meeting, giving a dividend yield of 2.69 percent based on yesterday’s closing price of 105.85 euros. (Reuters)

Greece’s producer price inflation accelerated to 3.3 percent year-on-year in January from 3.0 percent in the previous month, data from the National Statistics Service (NSS) showed yesterday. Energy prices gained 8.2 percent, while prices for capital and intermediate goods gained 4.2 and 4 percent, respectively. Consumer durables rose 2.8 percent, while non-durables remained unchanged.

EU Energy Commissioner Andris Piebalgs announced yesterday he would not hesitate to press for hefty fines for any of 10 EU member states that failed to open up their gas and electricity sectors to competition fast enough. Ten EU members, including Greece, Germany and Spain, must implement energy liberalization laws within two months or face court action. “The amount of fines will be decided by the European Union court,” Piebalgs told Reuters in an interview. “They will probably be big.” However, he added that he was confident that the EU members would make the deadline. Eight of the states have failed to open their gas and electricity sectors to competition, missing a July 1, 2004 EU-wide deadline. In addition to Greece, Germany and Spain, the Commission is taking a case against Sweden, Belgium, Luxembourg, Estonia and Latvia for failure to liberalize electricity and gas markets. Two states, Ireland and Lithuania, are in the spotlight for failing to open up their gas markets, while they have opened up their electricity markets. “I think Germany will have the most difficulties as their law is only at a very early stage in their Parliament,” Piebalgs said. “But the estimation is that the law will be amended by mid-June.” (Reuters)

Deutsche Bank has initiated coverage of Greek electronics retailer Germanos at “Buy” with a price target of 28.4 euros, citing its growth prospects in the domestic market and expansion into other countries. “While the company is currently trading at our fair value, lucrative potential deals in Poland, Ukraine and Romania could add a further 4.4 euros per share this year, offering 15 percent potential upside,” Deutsche Bank said in a note. Germanos shares closed at 24.62 euros yesterday. (Reuters)