ECONOMY

Bank profits are hit in Q1

Hit by an 89-percent drop in trading income, Commercial Bank yesterday reported a 51-percent fall in group pretax profits before minorities to 35 million euros in the first quarter of the year. The bank is the latest financial institution to feel the squeeze from the drought in the stock market and lower capital gains from bonds. Alpha Bank last month announced a hefty 92-percent plunge in trading income, leading to a 63-percent fall in net profits in the first quarter. Piraeus Bank also reported lower group pretax profits as a result of the decline in trading income. Market leader National Bank is due to report quarterly results tomorrow at the close of trading, with many predicting a massive drop in profits due to sharply reduced trading income. Commercial Bank blamed the 89-percent drop in trading income, to 6.6 million euros from 61.7 million euros, on «reduced capital gains from bonds due to the convergence of Greek long-term interest rates to eurozone levels on the one hand, and on stock market conditions on the other.» On the positive side, net interest income improved by 29.2 percent to 142.2 million euros, boosting the group’s net interest margin to 3.1 percent from 2.75 percent. Deposits and repos increased by 14.5 percent to 13.2 billion euros. Commission income rose by 7.6 percent to 32.9 million euros from 30.6 million euros, reflecting the bank’s increased income from banking activities. Gross consolidated operating income was down by 13.5 percent to 188.4 million euros as the sharp decline in trading income offset a 16.5-percent jump in income from organic activities. The bank also sliced 3.4 percent off operating expenses to 108.7 million euros, with personnel expenses down by 2.1 percent.