As profits plummet, NBG focuses on loan book

National Bank (NBG), Greece’s largest lender by assets, said yesterday first-quarter net profits fell by a larger-than-expected 93 percent, as steep trading losses, higher provisions and a special tax hit earnings. «The challenge for the rest of the year is to focus on managing the quality of our loan book in Greece,» Apostolos Tamvakakis, the company’s chief executive officer, said in a statement. «Likewise, it is important that costs be managed effectively.» NBG reported net earnings of 21 million euros, below an average forecast for 77 million euros. The country’s debt crisis, which sparked contagion fears and roiled the euro, has hurt banks through higher funding costs, a squeeze on margins and trading losses tied to their government bond holdings. Local operations weighed heavily on group figures as NBG booked a loss of 133 million euros for its Greece segment versus a profit of 176 million euros in the same period a year earlier. NBG, also present in Turkey, Bulgaria, Romania, Serbia, Albania, Cyprus and Ukraine, said Turkish subsidiary Finansbank grew profit 32 percent in the first quarter compared to the previous three-month period, with its earnings reaching 122 million euros. Group net interest income was steady at 1.035 billion euros, at the top end of expectations, with net interest margin at 4.01 percent. It said loan-loss provisions rose 34 percent to 314 million euros with the group’s capital adequacy ratio (Tier 1) at 11.1 percent. Market leader NBG is the first of Greece’s four main banks to report first-quarter results and is seen as a bellwether for the local banking sector, despite its large exposure to Turkey. Shares in the bank closed yesterday up 5.58 percent at 10.60 euros, trimming losses in the last month to 4.6 percent. The broader market has given up 12.1 percent in the same period.

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