NBG expected to outperform in 2005 results, thanks to loan growth and foreign operations

The National Bank of Greece (NBG), the country’s largest lender, is expected to post a 153 percent jump in 2005 net profit thanks to strong loan growth and a growing contribution from its Balkan operations. Based on a Reuters poll of 12 analysts, the bank is expected to report group net profit of 710.2 million euros ($844 million), an all-time record profit for the group. National will report financial results Feb. 28, after the market’s close. Greece’s major banks enjoyed a lending boom last year, with mortgages and consumer loans growing by more than 20 percent, as home buyers and people took advantage of low real interest rates. «Compared with the European Union average for household lending, Greece is relatively ‘underbanked,’ and that has led to a big expansion in new loans,» said analyst Costas Sinanidis at Investment Bank. Net interest income for the NBG group is expected to reach 1.671 billion euros, a 16.6 percent increase from 2004 levels. About 9 percent of group profit is expected to come from the group’s activities in Romania, Bulgaria, Albania, Serbia and the Former Yugoslav Republic of Macedonia, analysts said. In 2004, the bank took a one-off charge of 109 million euros to pay for an early retirement program for 1,500 employees. Not counting this exceptional charge, 2005 net profit is seen up 102 percent. Forecasts for the group’s dividend payout range between 0.80 and 1.10 euros per share, compared with 0.60 euro in 2004. National Bank shares trade at 20.5 times 2005 estimated earnings, at a premium to the DJ Stoxx European banks index, which trades at 17.2 times 2005 earnings, according to Reuters data. (Reuters)

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