National Bank (NBG), the country’s largest lender, reported yesterday a lower than expected drop in first-half net profit and expects a stronger performance ahead, due to improving global economic conditions. Net profit in the first half of the year declined 13 percent year-on-year to 708 million euros because of higher provisions, beating analysts’ expectations of a figure around 660 million euros. 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. «With a gradually improving global environment, I now feel even more confident that we will be able to deliver even stronger performance going forward,» Chief Executive Officer Takis Arapoglou said in a statement yesterday. The bank’s net earnings grew 23 percent quarter-on-quarter to 391 million euros. National, which is also present in Turkey, Bulgaria, Romania, Serbia, Cyprus and Albania, said net interest income rose 11 percent to 1.9 billion euros. Net interest margin stood at 408 basis points, remaining firmly above the 4 percent level. Brokers said trading and net interest income were behind the increase along with cost containment, creating expectations for high operational profitability in the sector in the second half of the year. National said its Turkish subsidiary Finansbank contributed profit of 219 million euros or 31 percent of the group’s total earnings, up 10 percent quarter-on-quarter despite higher provisions this year. Profit from operations in Southeast Europe declined 40 percent year-on-year to 64 million euros, contributing 9 percent to overall profitability. Shares in National Bank, which has a market capitalization of 14.15 billion euros, have gained 168 percent in the last six months, outperforming a 68 percent advance on the broader market. Yesterday’s results were made public after the close of trade on the Athens bourse.