ECONOMY

In Brief

Cut in dividend tax rate would be beneficial for Greek companies A cut in the 40 percent tax rate Greek companies pay on the dividends they distribute would be beneficial for corporations, brokers said. «Any reversal or dilution of the current punitive dividend tax regime would be positive for Greek corporates, especially those with traditionally high payout ratios, such as OPAP SA, Motor Oil SA and Hellenic Exchanges SA,» HSBC said yesterday in a note to investors. According to press reports over the weekend, the government is considering amending the dividend taxation law approved by Parliament in April. The review was prompted by concern that many companies may move their registered headquarters outside Greece to more favorable tax regimes or withhold dividend distribution to avoid paying the tax. Among the options the government is looking at is a cut in the tax to 24 percent, a flat tax rate on all company earnings, whether distributed or not, and a tax to be paid by investors who receive the dividend. Before April, companies paid a uniform tax on earnings of 24 percent. The rate was due to fall to 20 percent by 2014, while investors paid a 10 percent holding tax on dividends. HSBC reduced its value per share on OPAP by 4 euros after the April law, the bank said. (Bloomberg) Eurobank EFG profits slump 70 percent; bad loans rise Eurobank EFG, Greece’s second-largest lender, said yesterday first-half profits fell by 70 percent as the recession and debt crisis resulted in higher provisions and weaker loan growth. Eurobank reported net profits of 50 million euros ($63.61 million), in line with market expectations. Analysts were expecting net profit of 50.7 million on average. «The recessionary environment, coupled with strict austerity measures, affected the operations of the Greek banking system,» CEO Nicholas Nanopoulos said in a statement. (Reuters) Consistent policies Greece’s corporate tax policies need to remain constant to attract investment, S&B Industrial Minerals SA’s Chief Executive Officer Efthimios Vidalis said. «Unpredictable charges are a problem,» Vidalis said in a telephone interview yesterday. «We need to have predictability and we need to have more competitive tax rates.» The Greek government introduced «crisis levies» on profitable firms to generate at least 600 million euros ($762 million) in revenues annually in 2011, 2012 and 2013, according to a May 2 memorandum of understanding signed by Greece in exchange for 110 billion euros in emergency loans from the European Union and International Monetary Fund. The tax was originally imposed last year as a one-time measure. «We understand over the last year that fiscal issues had to be addressed,» Vidalis said. «But eventually as we get to the development of the Greek economy, which requires investment, we need to be competitive tax-wise.» S&B’s profits this year were set back by a 700,000 euro tax charge in the extraordinary levy on 2009 earnings. (Bloomberg) Alpha earnings Greek lender Alpha Bank is seen as today reporting a 74 percent drop in second-quarter net profits to 33 million euros ($42 million) after credit growth slowed and loan-loss provisions rose, a Reuters poll found. Alpha’s net interest income is seen up 3 percent in the three months to June. (Reuters)

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