National Bank of Greece on Thursday announced healthy profits for the first three quarters of the year, enhancing its capital position and cash flows in the context of what is proving to be a general rebound in the local credit sector, as the recent European Central Bank stress tests also revealed.
Profits amounted to 1.17 billion euros, more than four times the 262 million recorded during the same period in 2013. Earnings before provisions amounted to 1.24 billion, exceeding the amount of provisions (1.07 billion) and leading to operating profits of 169 million euros.
NBG officials noted that this was the eighth consecutive quarter of operating profits, which reflects the general improvement in financial conditions and management actions to contain expenditure. Group operating expenses were reduced by 11 percent on an annual basis as the bank implemented significant spending cuts across all geographic sectors.
Regarding the quality of the loan portfolio, the rate of new bad loan creation in Greece continued to slow, dropping by 6 percent on a quarterly basis to 246 million euros, while the annual decline in the growth rate came to 38 percent. The coverage level of bad loans remained high, as provisions covered 56.5 percent, while the bad loan index amounted to 23.4 percent of all loans, virtually the same as in the second quarter. In Greece alone the nonperforming loans index read 30.1 percent, against 29.3 percent in Q2.
The contribution of NBG’s Turkish subsidiary, Finansbank, once again proved very positive. With the economic climate in the neighboring country improving, National stated that Finansbank’s net third-quarter profit amounted to 109 million euros, growing by 27 percent from the previous quarter.
Among other blue chips to release their Q3 results, OTE telecom on Thursday promised shareholders a dividend for the 2014 financial year, for the first time since 2008. Group revenues declined 9.5 percent in the first nine months of the year to 2.9 billion euros, while net profits after taxes and majority rights dropped by about 60 percent to 194 million euros.
Coca-Cola HBC reported a significant 5.6 percent decrease in net revenues in the first nine months, which came to 5 billion euros against 5.29 billion a year earlier. The listed firm attributed the decline to the relatively cool and wet Greek summer and the decline in Russian consumption.
The CCHBC group has also sold its 50 percent stake in Bulgarian beer company Zagorka AD to Heineken – holder of the other 50 percent – for 76.5 million euros, reaping capital gains of 58.8 million.