ECONOMY

Eurobank posts 47 pct rise in 2005 net profit on strong retail growth

EFG Eurobank Ergasias yesterday said 2005 net profit rose 47 percent on market share gains in domestic major banking segments, especially retail loans. A greater contribution from Southeastern European subsidiaries and higher efficiency also boosted the bottom line. The bank said net profit under International Financial Reporting Standards rose to 501 million euros ($594.09 million) from an IFRS-adjusted 339.9 million euros ($403.05 million) in 2004. The result – announced after the Athens Stock Exchange closed – was in line with market expectations. The strong expansion of the bank’s loan portfolio drove net interest income up over 25 percent to 1.37 billion euros ($1.62 billion). Commissions were nearly 23 percent higher at 354.6 million euros ($420.48 million). Better cost control pushed the cost-to-income ratio down to 47.9 percent from 51.8 percent, despite higher investment spending on expanding the branch network both in Greece and abroad. The bank’s return on equity ratio after tax and minorities rose to 21.1 percent from 16.8 percent in 2004. Total lending grew by nearly 26 percent in 2005 with household lending in Greece alone rising nearly 30 percent. EFG Eurobank said foreign units contributed 210 million euros ($249.02 million) to total operating income, a rise of 44 percent compared with 2004, contributing 11.3 percent of total group operating income. EFG said it is targeting net profit of at least 615 million euros in 2006 and a compound annual growth rate for net profit of at least 20 percent for the period 2006 to 2008. The bank said it is also setting a return on equity target of 25 percent by 2008.