National Bank swings to loss on provisions

Greece’s largest lender by assets National Bank (NBG) reported on Monday it swung to a loss in the fourth quarter as higher provisions for impaired loans weighed on its bottom line.

Greek banks, already hit hard by the country’s debt crisis, have suffered further in recent months as rising political tensions and fears of a Greek eurozone exit prompted savers to pull deposits, squeezing liquidity levels.

NBG, which also has operations in the Balkans including Bulgaria and Romania, reported a net loss of 1.11 billion euros versus a profit of 30 million euros in the third quarter as loan-loss provisions and other one-off charges reached 1.47 billion euros.

For the full year 2014, NBG reported net profit of 66 million euros versus net earnings of 809 million euros in 2013.

Deposit flight has left Greek banks dependent on emergency liquidity assistance (ELA) from the domestic central bank, funding which is costlier than direct borrowing from the European Central Bank and eats into their net interest margins.

In total, Greek banks’ borrowing from the ECB and the Bank of Greece hit 104.3 billion euros in February, equivalent to about 57 percent of Greek gross domestic product.

NBG said deposits in Greece shrank by 2.2 billion euros in the fourth quarter.

Its total exposure to central bank funding, including the ECB, reached 23 billion euros as of mid-March, of which 13.3 billion euros was ELA borrowing.

The bank’s cash cow, Finansbank in Turkey, contributed 62 million euros to group earnings in the fourth quarter, down from 109 million euros in the previous quarter.


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