National Bank of Greece (NBG), the country’s biggest lender, yesterday reported a 20 percent pretax profit growth in the first half to 312.8 million euros, year-on-year, with a strong expansion in mortgages, consumer credit and loans to small and medium-size businesses and an increasing contribution from foreign operations. «Our performance provides a springboard for the development of our strategy in coming quarters, based on the expansion of our core business in corporate and retail banking at home and abroad and the rationalization of our operational infrastructure,» said Takis Arapoglou, NBG group president. Pretax earnings rose 14.7 percent in the second quarter to 167.1 million euros, the highest level in recent years. Return to equity was 20 percent in the second quarter, against 15.3 percent in the same period of 2003. Group interest income improved 12 percent year-on-year to 683.5 million euros. The net interest margin rose to 2.99 percent, an improvement of 24 basis points from a year earlier. Commission revenue advanced 15.2 percent 229.6 million euros, mainly due to a steady rise in retail and corporate lending, which grew 18.9 percent and 19.3 percent respectively, year-on-year. Net commission income was up 10.1 percent. Total lending grew about 10 percent since the beginning of the year to 25.2 billion euros. Mortgages surged 68 percent year-on-year to 1.2 billion euros, and consumer loan disbursements were up 58 percent to 655 million. The balance of consumer loans and card credit rose 25 percent to 3.5 billion. Loans to small businesses grew 40 percent on an annual basis, approaching a total of 1 billion euros. The balance of loans to medium-sized and large enterprises grew at an annualized 14 percent to 825 million euros. Total assets under management advanced 12 percent on annual basis to 49 billion euros. Call deposits and savings were up 8.5 percent year-on-year. Mutual fund assets grew at an annual 6.3 percent to 7.9 billion, leading NBG’s market share to expand to 25.8 percent. Foreign operations accounted for 52.9 million euros in earnings, with a 20 percent improvement in core profitability. Net interest income from the foreign subsidiaries was up 33 percent and net commission income grew 13 percent, year-on-year, in the first half. Administrative expenses rose 1.4 percent with staff costs up 5.6 percent, after a recent collective wage agreement. NBG said its cost-to-income ratio improved to 61.2 from 64 percent in the same period in 2003.