FOO YUN CHEE

EFG Eurobank Ergasias, the third largest bank in the country, sought yesterday to dispel market rumors of a gloomy first quarter for the banking sector, saying that results for the first three months of the year would be in line with the corresponding period of 2001 minus extraordinary gains.

“Discounting this factor [the rent from the King George Hotel], first-quarter results in 2002 will be comparable with that in 2001 but better than the third quarter of 2001,” Nicholas Nanopoulos, managing director, told shareholders at the annual meeting yesterday.

With the stock market continuing to languish and subsequently impacting on the sector’s trading activities, there has been speculation that banks will see a sharp fall in their results this year.

Eurobank posted pretax profits before minorities of 124.7 million euros and a one-off gain of 21 million euros in the first quarter of 2001 from the rental of the King George Hotel.

P&K Securities banking analyst Manos Giakoumis in his research memorandum last week suggested that the elimination of this extraordinary revenue “will affect bottom-line results” in the first quarter of the year and that earnings before tax could drop by 29.4 percent.

Nanopoulos was cautious on prospects for the overall year, saying that growth would depend on community-funded projects and others related to the 2004 Olympic Games, as well as the course of inflation over the year and structural reforms. He said, “There is a need for real privatization” and the completion of tax and social security reforms.

Eurobank’s shares were down by 1.82 percent yesterday to 12.98 euros as investors failed to be cheered by Nanopoulos’s reassurances. The gloominess spread to National, Alpha and Commercial banks as well.