National Bank, the largest bank in the country, yesterday announced a massive 51-percent fall in consolidated profits before taxes and after minorities in the first quarter of the year due to sharp falls in trading income and extraordinary gains. A 57-percent drop in trading income and a 38-percent decline in one-off gains took group profits before taxes and after minorities down to 136.2 million euros from 277 million euros in the first quarter of 2001. National Bank’s first-quarter result was, however, better than the consensus forecast, which had put pretax profits at 124 million euros. P&K Securities banking analyst Manos Giakoumis said he had projected a much more pessimistic scenario, which meant the result came out better than expected. «I had expected trading income and extraordinary gains to fall by 65 percent and 56 percent respectively,» he said. He said the first-quarter result also had the disadvantage of being compared with first-rate results last year. The bank also reported a 3.1-percent decline in net interest income to 274.7 million euros as higher funding costs outweighed the sharp jump in consumer credit and mortgage lending. The net interest margin dropped to 2.34 percent from an average of 2.43 percent in 2001. An aggressive drive into retail banking last year lifted consumer and credit lending by 31.4 percent to 2.15 billion euros and mortgage lending by 21 percent to 5 billion euros. Seeking to curb funding costs, National Bank the previous day slashed 0.5 percent off savings rates and also increased the ceiling on non-interest-bearing deposits to 1,000 euros from 500 euros. The second measure is expected to save the bank some 44-59 million euros. Operating expenses in the first quarter increased by 7.5 percent to 325 million euros, lending weight to governor Theodore Karatzas’s plans to cut down on expenditure with a series of yet-to-be announced measures. The bank’s return on average assets fell to 1.07 percent from an average of 1.4 percent in 2001 while the return on average equity declined to 23 percent from 26.7 percent. National Bank’s share was down by 0.18 percent yesterday to close at 22.76 euros. Separately, Piraeus Bank yesterday underlined its determination to build up its share of the local market to 10 percent and in the Balkans to 15 percent over the medium term following its takeover of ETBA Bank, the industrial development bank, late last year and its recent linkup with Dutch insurance and financial services group ING. The addition of ETBA to the stable lifted Piraeus’s market share to 10 percent and also gave a 6-8-billion-euro boost to its capital. Piraeus’s retail products will be offered over the ING network at the end of the month.