ECONOMY

NBG’s first-quarter profit meets forecasts

Greece’s largest lender National Bank’s first-quarter net profit rose in line with expectations, helped by growth in its core banking business in Turkey and the Balkans. The bank said yesterday net profit rose 25 percent in the first quarter, excluding a 22-million-euro one-off tax settlement in Turkey, to 423 million euros ($666 million), topping an average forecast of 393.5 million. The range was 382-414 million net of the one-off Turkish tax payment. «Results were more or less in line with estimates,» said analyst Sophia Skourti at HSBC Pantelakis Securities. «Net interest income came in a bit above forecasts. In the domestic market, profitability was slightly better than expected.» Greek banks, big outperformers in 2007, have shed more than 26 percent of their market capitalization this year, hurt by market turmoil, funding concerns and worries about the macro outlook in the Balkans where they have expanded. National Bank reported «solid growth» in its core banking business in all regions. The group also operates in Bulgaria, Serbia, Romania, Albania and Turkey. Turkish unit Finansbank contributed 30 percent to group earnings. Net attributable profit, before the one-off tax payment, was up 40 percent to 129 million euros. National Bank’s franchise in Southeast Europe grew profit by 72 percent year-on-year in the first quarter, making up 12 percent of group profit. «This is the result of our rapidly expanding footprint which is maturing and attracting an increasing number of customers. With the addition of 122 new branches since last March and 13 since the start of the year, the total network has reached 670 branches,» the bank said. Resilience Net interest income rose 21 percent to 855 million euros. Despite intensifying competition for deposits and rising funding costs, the bank said net interest margin was steady at 4.31 percent quarter-on-quarter but improved 4.19 percent on the same period a year earlier. While the group’s loan portfolio expanded by 25 percent to 57.1 billion euros, asset quality was maintained and its ratio of non-performing loans (NPLs) was stable at 3.5 percent. At home, the pace of retail credit expansion remained strong. Mortgage lending was up 17 percent year-on-year with consumer loans growing 24 percent. Deposits grew 13 percent to 60.5 billion euros, bringing the group’s loans-to deposits ratio to 92 from 82 percent in March 2007. NBG said its ample liquidity ensures no hindrance in the execution of its business plan. The stock, down 28 percent so far this year, trades at about nine times expected 2008 earnings versus a price-to-earnings ratio of 10.4 for European peers. (Reuters)