NBG profit at 406 million euros (Update)

National Bank (NBG), the country?s largest lender, reported a better-than-expected net profit for 2010 on the back of slowing growth in Turkey and said that it expects to ?comfortably absorb? a rising number of bad debts at home in 2011.

NBG said on Wednesday net profit fell 56 percent year-on-year to 406 million euros, due to a one-off corporate tax, higher provisions for customers unable to repay loans in the recession and trading losses stemming from its Greek bond portfolio.

Despite the dip, the figure is better than the 328-million-euro figure analysts were expecting, according to Reuters.

Operations in Greece swung into a 136-million-euro loss last year, versus a 398-million-euro profit in 2009, said National, which is present in 12 countries, including Bulgaria, Romania and Serbia.

Profits from its Turkish unit, Finansbank, advanced to 462 million euros from 425 million previously, it said.

The Athens-based lender, which completed a 1.8-billion-euro rights offering late last year, said that it will cut its stake in Finansbank when market condition improve without providing any further details.

NBG CEO Apostolos Tamvakakis said he expects the Greek bank to ?comfortably absorb? the peak in provisions this year as it continues cost-cutting efforts and the repricing of its loan book.

On the group level, NBG put aside 1.36 billion euros for bad loans last year, up from 602 million in 2009.

?Another important objective for 2011 is to continue to reduce our exposure to the European Central Bank,? Tamvakakis said in a statement.

National Bank reduced its ECB funding by 2.9 billion euros from the third quarter, NBG said.

Greek lenders have been suffering deposit outflows and are dependent on the ECB for liquidity as access to interbank funding remains mostly shut on sovereign debt concerns.

Shares in National Bank, whose all-share offer for Alpha was rejected in February, dipped 1.92 percent to 6.65 euros on Wednesday, versus a 1.42 percent retreat on the broader market.

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