ECONOMY

Eurobank results exceed forecasts

EFG Eurobank, Greece’s third-largest lender by assets, said yesterday its nine-month group net profit grew 54 percent to 385 million euros, beating forecasts, fueled by high-margin retail lending. It was the second Greek bank to report strong profit after Piraeus a day earlier, confirming a robust trend in retail credit expansion this year, a main profitability driver for the country’s lenders. EFG’s nine-month net profit exceeded an average forecast of 344 million euros in a Reuters poll of analysts, who were expecting growth of 37 percent. «Results were above forecasts, confirming the pick-up in retail lending growth in the third quarter,» said analyst Sofia Skourti at Marfin Analysis. «The boom in the last quarter may be followed by a gradual deceleration next year but should not become particularly felt before 2007,» she added. Eurobank said net interest income grew 23.9 percent to 981 million euros as the net interest margin improved to 3.5 from 3.3 percent in the same period last year. A strong performance in retail banking, asset management and capital markets was behind a 25.5 percent rise in total revenues which hit 1.4 billion euros, it said. Lending to households expanded 34.8 percent to 12.2 billion euros with the group increasing its loan balances in Greece by 23.3 percent, above the market’s 16.1 percent growth clip, meaning gains in market share. The bank improved its return on average equity (ROE) to 23 from 16.7 percent, while on the expense side it squeezed its cost-to-income ratio to 46.3 from 51.9 percent, achieving efficiency gains. Eurobank’s shares settled 0.3 percent lower at 26.44 euros. They are up 4.6 percent year-to-date. The group said it will change its corporate name to Eurobank EFG, adopting a common brand to support its expansion in southeastern Europe, where it plans to add 150 branches by the end of 2006. (Reuters)