ECONOMY

Alpha, Piraeus banks upbeat on profit figures

Two of Greece’s largest banks, Alpha and Piraeus, said yesterday they are on target to meet first-quarter profit projections despite difficult international market conditions and a slowing Greek economy. European banks have lost some $68 billion (43.4 billion euros) in charges and write-downs recently due to exposure to the US housing market crisis that has prompted a global credit squeeze. Bank of Piraeus, the country’s fourth-largest lender, said the quality of its loans portfolio is improving in Greece and abroad. «First-quarter numbers confirm there is a positive course despite the international environment. Economic figures are even better than 2007,» Piraeus Bank Chairman Michalis Sallas told shareholders. The bank said that it expects net profit for the full year to be significantly above 600 million euros versus 503 million euros, marking an increase of just under 20 percent. Piraeus earnings grew 50 percent last year on strong retail credit expansion at home and in Southeast Europe. The bank is also active in Bulgaria, Romania, Serbia, Egypt, Albania, Ukraine, Cyprus and the United States. Local lenders have not been hurt by write-downs related to subprime loans but financial market turmoil has put pressure on their shares. In the last six months, Piraeus Bank shares have tumbled 20.8 percent on the Athens bourse, as compared to a 20.1 percent retreat on the market overall. Stocks in Alpha Bank, the country’s third-largest lender, have shed 12.36 percent. Alpha Bank Chairman Yiannis Costopoulos said he expects the group’s performance in the first quarter to be in line with targeted annual earnings per share growth of at least 23 percent. »If there is a divergence (from targets), it will be insignificant. We believe we will have a good quarter,» he said without giving further details. Asked about the possibility of the bank being involved in merger or takeover activity in the domestic market, Costopoulos said, «Nothing is being discussed at the moment.» Talk of acquisitions gathered momentum recently after news that EFG Eurobank, the country’s second-largest lender, had increased its holding in state-controlled Hellenic Postbank to more than 5 percent. Press reports have hinted that Alpha may be in merger talks with National Bank but the two lenders have formally dismissed the speculation. [email protected]