EFG Eurobank Ergasias, the third-largest Greek bank by assets, yesterday announced a higher-than-expected rise in half-year profit, to nearly 180 million euros. Credit expansion – at a rate far higher than the sector average – and keeping spending under wraps contributed to a 54 percent increase in consolidated net profit, after tax and minorities, to 178.9 million euros from 116 million in the first half of 2003. Spending under control Top Eurobank managers remarked that keeping spending growth low was the biggest achievement. The annual spending growth rate in domestic operations was limited to 2.9 percent (4.1 percent, if we discount changes in write-off procedures). The group’s annual spending growth rate was 6.1 percent, mainly due to the added cost of absorbing Bulgarian subsidiary Post Bank. For the first time in the bank’s history, the cost/turnover ratio dropped below 50 percent (48.8 percent for the entire group and 48.6 percent for domestic operations). The bank’s loan business expanded quickly in the first half: The annual growth rate on the domestic front was 23.7 percent, while group loan rate growth reached 25 percent. According to the latest data by Bank of Greece, overall credit expansion among Greek companies and households was 17.7 percent for the first five months of the year. The rate of defaulting loans declined to 2.9 percent at the end of June from 3.3 percent at end-March and 3.3 percent at the end of 2003. The bad debt coverage ratio increased to 92 percent at end-June, from 82 percent at end-March, as a result of increased default provisions and a tighter risk management policy. Management added that the group improved the organization of Post Bank and Romania’s Banc Post. Eurobank also completed the 100 percent acquisition of ACBH, which, in turn, controls 96.74 percent of Post Bank. The group has a total of 290 branches in the Balkans (Bulgaria, Romania, Serbia). The capital adequacy ratio was 11.7 percent at the end of the first half, while the similar ratio for Tier I funds was 9.7 percent.