ECONOMY

Turkish holding props up NBG?s Q1 earnings

National Bank (NBG), the country?s largest lender by assets, says its first-quarter net profit rose 39 percent on the year, boosted by the strong performance of Turkish subsidiary Finansbank.

An NBG statement says net profit reached 157 million euros in January-March 2011, compared with 114 million euros in the first quarter of 2010. Analysts were expecting a figure of around 116 million euros.

Finansbank posted profits of 151 million euros, compared with 2 million in crisis-afflicted Greece and 6 million in Southeastern Europe.

According to CEO Apostolos Tamvakakis, NBG increased its profits through drastic cuts in operational costs.

He said the bank had managed to weather the crisis in a ?satisfactory? way so far, but warned that significant challenges remain ahead.

?NBG plans to take new initiatives to strengthen the Greek banking system and tackle the economic crisis,? he said in a statement on Thursday.

With the Greek economy in its third straight year of recession, it was tough for the country?s banks to make money, leading to a squeeze in deposit spreads, weak loan volumes and higher provisions.

Greek lenders have become dependent on the European Central Bank for liquidity as access to interbank funding remains mostly shut due to sovereign debt concerns.

The group, also present in Romania, Bulgaria, Serbia and Cyprus, reduced its funding from the ECB by 3.2 billion euros in the first quarter.