Ratings agency Fitch expects the economic performance of Greece’s top banks to be «constrained» in 2009 due to deteriorating loan quality but pointed out that cost-cutting efforts and resilient earnings generation will help protect profits. Referring to the country’s top four lenders – National, Eurobank, Alpha and Piraeus – Fitch said yesterday that increased loan impairment charges, costs charged against loans that may not be collected in full, in Greece and Southeast Europe are likely to weigh on profit figures. «Loan impairment charges… picked up significantly in the first quarter and Fitch expects credit costs to increase as the operating environment is likely to deteriorate further through the rest of the year,» said Cristina Torrella, director at Fitch’s Financial Institutions team. Greek banks, which had been expanding rapidly in recent years into neighboring Balkan markets, have put a hold on expansions plans, waiting for an improvement in economic conditions. Fitch added that the banks’ earnings generation capacity remained resilient, underpinned by good domestic retail franchises and relatively profitable foreign operations. «Operating revenue generation held up reasonably well in the first quarter, largely supported by a still relatively wide net interest margin,» it said in a statement.