Even though nine-month results of listed companies on the whole confirmed the expectation that 2003 will be a year of recovery for corporate profits, the imbalance between the performance of banks and the rest, and the rather stagnant overall picture of operating results have left investors with a bittersweet taste. Turnover and profits on a consolidated basis show noteworthy rises of 12 and 22 percent respectively, but a closer look trims the optimistic picture. Without banks, the rise in profits is only 11.9 percent; moreover, operating profits have recovered only 2 percent, while in a number of cases the net profits reported come from extraordinary items. On a consolidated basis, 217 firms reported profits – of which 122 involved a rise – and 38 losses. But the overall small rise in operating profits shows that listed firms have not yet recovered. The improvement in profits or the reduction in losses appear to be more a result of restructuring policies than of increased business. In 2001 and 2002, most listed firms attempted bold rationalization moves that involved cost-cutting, reducing debt and abandoning problematic activities; these have begun to pay off. Performance has also been helped by low interest rates and the rescheduling of debt (mainly through bond loans) which restrict costs. However, problems remain and a number of firms face irreversible problems. Several listed firms have gone bankrupt in 2003 and even more appear to be in their last throes. Dozens are burdened with such high loans that they would need centuries to pay them off – unless a miracle recovery of the bourse, 1999-style, occurs. It is quite telling that 110 of the more than 370 listed on the Athens Stock Exchange (ASE) have a capitalization smaller than their total debt. The particularly low basis of 2002 to which this year’s nine-month results are compared is also not to be ignored; many analysts described 2002 as a disastrous year and the results of hundreds of firms shrank dramatically. The picture was so negative that many believed 2003 would be a year of healing the wounds. And so the small improvement, even though it did not originate in a rise in business, was received with a great deal of satisfaction that many describe as above expectations. Banks were a pleasant surprise, but their nine-month profits were still 2.1 percent lower than in the same period of 2001. The deregulation of consumer credit bodes well for further improvement of their results. Accounting irregularities One further parameter that must be taken into consideration when looking at financial results is the accounting irregularities which distort the real picture. If account is taken of auditors’ reports, many listed firms have had negative equity capital for a number of years. The picture of many firms is characterized by a peculiar dualism; the top part, dominated by figures, reflects the wishes of management, while the bottom part includes the observations of auditors. Frequently, the two parts are unrelated to each other; holdings valued at unrealistic prices, bad debts for which provisions are not made, non-operating profits from unlikely sources, and inflated fixed-capital values and reserves are just a few of the irregular practices employed.