NBG Q1 profit up 30 pct; core earnings at an all-time high

The National Bank of Greece (NBG), the country’s largest, yesterday announced a 30 percent jump in group first-quarter income, year-on-year, to 145.7 million euros, with core earnings rising 31.6 percent to an all-time high of 103.1 million. As a result, after-tax return on equity climbed from 15.4 percent in 2003 to 18.2 percent, and return on average assets improved by 13 basis points (bps) to 1.14 percent, NBG said in a statement. Net interest income was up 12.2 percent, year-on-year, to an equally all-time high of 337 million euros. The net interest margin advanced 34 bps to 2.74 percent, reflecting «the continuing improvement in the composition of group assets through the expansion of lending portfolios, particularly in retail operations, and the maintenance of the group’s leading position in saving deposits.» Net commission income surged 21.9 percent, with a particularly strong performance in investment banking (up 75.1 percent) and in retail operations (23.6 percent). Results were also bolstered by a containment of costs. Operating expenses were up only 0.2 percent in relation to the previous quarter, administrative expenses were down 1.7 percent compared to average 2003 levels, while personnel expenses rose 4.7 percent – incorporating provisions for inflation-indexed pay raises for the whole of the year. The cost-cutting efforts were reflected in a further improvement in the efficiency ratio to 60.6 percent, against 65.8 percent in the first quarter of 2003 and an average of 64.6 percent for the previous year. Foreign operations showed an impressive 50 percent surge in pretax profits, year-on-year, to 28.3 million euros, reflected in a 50 percent rise in net interest income and a 17 percent increase in net commission income. Total NBG group lending stood at 24.3 billion euros at the end of the first quarter, representing an annualized growth of 21 percent. Consumer credit advanced 69 percent to 329 million – the best quarterly performance in recent years. Mortgages rose 66 percent to 535 million, while corporate lending was up 18 percent. The group’s total capital under management (deposits, repos and mutual funds) was up 8.1 percent year-on-year to 46.1 billion euros. Deposits stood 10 percent higher and mutual fund assets grew 11 percent to 7.9 billion. NBG’s mutual fund market share stands at 25.6 percent. The group’s capital adequacy Tier 1 ratio increased to 10.4 percent from 10.1 percent three months earlier, while the total capital adequacy ratio advanced to 13.2 percent.

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