ECONOMY

Bad loans to peak this year

National Bank (NBG) Chairman Vassilis Rapanos is seen on a screen during Thursday’s shareholder assembly.

NBG expects nonperforming loans to peak this year but added that it has the profits to absorb them.

?NBG?s pre-provision earnings cover group provisions by 1.5 times, meaning we can absorb a 50 percent increase in provisions without a need to tap capital reserves,? NBG Chief Executive Apostolos Tamvakakis told the bank?s annual shareholders meeting.

Looking at deposits, he said National Bank was faring better than the sector, with its base down 2.1 percent in the first four months of the year versus a 3.8 percent drop in the system.

A shrinking deposit base has added to the strains of Greek banks, which have become reliant on ECB funding for their liquidity needs as access to wholesale funding remains shut on sovereign debt concerns.

Tamvakakis said NBG had 13.2 billion euros in government bonds and 1.6 billion euros of T-bills in its portfolio.