ECONOMY

General’s profits shoot up

General Hellenic Bank said yesterday that higher interest income and a curb on operating expenses lifted last year’s earnings before interest, tax, depreciation and amortization by 24 percent to 43.31 million euros (14.76 billion drachmas). The bank, the first in the sector to announce 2001 results, said that pretax profits rose by 125 percent to 12.45 million euros (4.24 billion drachmas) from 5.52 million euros (1.88 billion drachmas) in the previous year. Since the appointment of a new management team in June 2000, the bank has steadily improved its financial performance and asset quality. It has also sought to branch out into different sectors, acquiring majority control of ABN Amro Securities in November and more recently, linking up with construction company GEK to capitalize on real estate activities. The bank, however, wants to hook up with a strategic investor, preferably a foreign bank. Investment bank Rothschild has been entrusted with the task of finding a suitable partner and is expected to report on its search shortly. The Hellenic Army Pension Fund is the principal shareholder, with a 35-percent stake. «The results are in line with objectives set out in the 2001 budget and the two-year business plan,» General Bank said in a statement. While interest income grew by 32 percent, the result of brisker business and better asset and liability management, commission revenues continued to suffer from a volatile stock market, sliding by 1 percent. The bank said that costs related to voluntary redundancies, the installation of computer systems, the opening of a new head office and 12 outlets, and the relocation to the new headquarters continued to form a significant part of operating expenditure. Up by 11 percent, operating expenditure grew at a slower pace than the 16 percent recorded in 2000 and 20 percent in 1999. Loans last year rose by 41 percent, with mortgage loans showing the biggest hike, a 143-percent increase. Consumer loans, including credit card operations, were up by 71 percent. Deposits grew by a modest 20 percent, suggesting that low savings rates are driving Greeks to invest their money in more lucrative activities. The dull market conditions persist and are unlikely to change for a while.