National Bank, Greece’s largest lender, reported yesterday a better-than-expected 21 percent drop in net profits after its Turkish unit helped to cushion a drop in earnings at home and in Southeast Europe (SEE). National Bank of Greece (NBG), present in 12 countries, including Bulgaria, Romania and Serbia, said net income for the first three months of the year fell to 317 million euros from 401 million euros, hurt by higher provisions for loan losses. Loan-loss provisions are an expense set aside by a lender as an allowance for bad loans, when a customer defaults or credit terms have to be renegotiated. According to Reuters, analysts had been expecting National to report a figure of 258 million euros. National, which has a market capitalization of 9.5 billion euros, said net profits from domestic and SEE operations fell 28 percent and 26 percent, respectively. Earnings from its Turkish unit, Finansbank, fell 2 percent year-on-year to 103 million euros, corresponding to a third of National’s total profits. Group provisions for credit risk rose to 235 million euros, up from 88 million euros in the same period a year earlier. Total group lending reached 67.6 billion euros, up 18 percent, while mortgage and consumer loans grew 13 percent. The bank said cost-cutting efforts will help it get through 2009 with an emphasis on «containing the deterioration of asset quality and sustaining a high pre-provision profit margin.» «Though uncertainty over developments in the coming quarters remains high, I feel more confident now about our ability to come out stronger from the crisis in order to make use of growth opportunities,» said National Bank Chairman and CEO Takis Arapoglou. Shares in National Bank outperformed the Athens bourse yesterday, adding 3.16 percent to 19.24 euros, versus a 0.80 percent advance on the broader market.