National Bank shares fall despite successful exit plan
The National Bank of Greece yesterday saw its shares slide to a year-low as investors failed to be convinced by the success of its voluntary redundancy program and the benefits accruing from the creation of a new management layer. The bank’s shares fell by 1.25 percent to close at 18.92 euros. Since the beginning of the year, National Bank’s equity has lost nearly a third of its value, underlining investors’ unhappiness with disappointing first-quarter results stemming from its high dependence on non-core activities. The bank’s stocks took a hammering last week following revelations of significantly lower first-quarter results when calculated according to US GAAP. Reflecting the differences in the valuation of securities and the treatment of unrealized capital losses coming from trading securities, its net profit was 58-percent lower than the result under Greek accounting standards. National Bank said yesterday that close to 600 employees took advantage of its voluntary redundancy scheme which kicked off in May and ended recently. The staff cutbacks are part of a cost-cutting strategy adopted this year to address the problem of declining profits. The bank did not give details of the costs of the early retirement scheme. National Bank also announced the appointment of 10 general managers for different sectors who will report to the governor and his three deputies. Sofia Skourtis, banking analyst at Marfin Hellenic Securities, said the decision to split up the bank’s different activities and put someone in charge of each sector will improve efficiency and speed up decision-making. «It’s a quality move,» she said. The 10 new managers will be responsible for legal affairs, financial affairs, operational support, human resources, shipping operations, corporate financing, the domestic network, foreign activities, retail banking and investment banking. National Bank’s latest efforts to revamp its organizational structure came just a week after it said it would absorb its group investment subsidiary, ETEBA, and consolidate its investment banking activities. Since the failure of its merger with rival Alpha Bank early this year, National Bank has adopted a more aggressive strategy, determined to prove that it can grow as well if not better on its own. Signaling the bank’s intentions to expand its market share in the highly lucrative but as yet undeveloped small- and medium-sized enterprises market, Governor Theodoros Karatzas recently went on this quest in northern Greece, seeking to woo small businesses. The energetic push notwithstanding, analysts said the bank could see its first-half pretax profits plummet by more than half as the continued weakness in the stock market drags down securities and trading income.
