ECONOMY

Piraeus profits soar in year’s first half

Piraeus Bank, Greece’s fourth-largest lender, said yesterday first-half net profit grew 43 percent year-on-year to -372.3 million, above market expectations, boosted by strong retail credit expansion and one-off capital gains. Analysts in a recent Reuters poll had expected average group net earnings of -355.6 million. Greek banks have enjoyed a credit boom in the last three years with households taking advantage of low real interest rates to buy property and consumer goods. Expanding operations in Southeast Europe are also feeding profits. Piraeus, which is planning a -1.35 billion rights issue to fund growth and acquisitions, is also present in Bulgaria, Serbia, Romania, Egypt, Albania, Ukraine and the United States. «Business volume growth rates accelerated in the first half of 2007, while profitability continued to grow at a high pace both in Greece and abroad,» said Piraeus Bank Chairman Michael Sallas in a statement. «Loans grew 37 percent versus June 2006 and deposits by 25 percent respectively.» The group revised its full-year earnings guidance upward, forecasting net profit would exceed -620 million. Piraeus Bank said group net interest income rose 28 percent in the first half to -411.5 million. The net interest margin was 3.03 percent. In March this year, Piraeus liquidated its 8.02 percent stake in Bank of Cyprus after its takeover proposal was rejected, realizing a capital gain of -153 million. Separately, Piraeus announced its agreement with Dutch insurer ING for the exclusive supply of the group’s life and pensions programs. ING will also acquire completely the two companies’ joint venture, ING Piraeus Life. (Reuters, Kathimerini)