Big banks’ H1 results are lower in spite of Q2 improvement
Greece’s two largest banks yesterday reported lower first-half income, despite an improvement in the second quarter over the first quarter of the year, but above market expectations. National Bank of Greece (NBG), the largest in terms of assets and with a market capitalization of 4.1 billion euros, said consolidated profit before tax and after minorities in the first six months of the year was down 50.5 percent to 228.8 million euros from 462.3 million euros in the same period of 2001. In a recent Reuters poll, analysts forecast NBG results of 210.1 million euros. The bank said the decline was predominantly due to the steep plunge in trading income to 70.5 million euros from 265.7 million euros in the first half of 2001. This decline was mainly the result of large losses from transactions in bonds, where income declined from 186 million euros to 63 million, and in stocks, where income fell from 58 million euros to 9.6 million. NBG said that despite the negative market climate, consolidated operating profitability showed an improvement, with net interest income rising 0.7 percent to 573.6 million euros, the result of an 8.8-percent increase from the first to the second quarter of 2002. The group’s net interest margin also improved from 234 basis points in the first quarter to 238 basis points in the first half as a whole. Net commission income rose 2.5 percent to 164.9 million euros in the first half – despite a 19.6-percent drop in commissions from capital market activities, and 5.7 percent from the first quarter to the second. The bank said that discounting trading results, group first-half results are only slightly down to 766.4 million euros from 771.8 million in 2001, with a clear, 8.5-percent improvement in the second quarter of 2002. Core profitability sources now account for 91.6 percent of total income. NBG’s operating expenses were up 7.5 percent to 142.6 million euros. Total loans and corporate debt securities were 12.9 percent higher from a year earlier at 22.1 billion euros, while non-performing loans represented 2.3 percent of total portfolio. Eurobank EFG Eurobank Ergasias, which recently surpassed NGB as Greece’s largest bank, with a market capitalization of 4.2 billion euros, said first-half group net profit before tax and after minorities fell 11 percent to 161 million euros from 180 million a year earlier. The bank, reporting results under International Accounting Standards (IAS), said excluding extraordinary income of 22 million euros from property leasing in the first half of 2001, net profit in the same period this year was up 15 percent. It said second-quarter profit jumped 30 percent year-on-year to 49 million euros, while net interest income was 20 percent higher at 349 million and fees and commission income rose 9 percent to 118 million euros. Loans jumped 26.5 percent, with consumer credit rising 39 percent and mortgages 35 percent. Deposits were 7 percent higher at 16.4 billion euros, while excluding repos, which fell 14 percent, the rise was 19 percent at 11.4 billion euros. EFG Eurobank, in which Deutsche Bank holds a 10-percent stake, said all funds under management were 12 percent higher in current prices at 23.4 billion euros. Net trading results were lower, from 34 million euros to 12 million, due to lower income from bond transactions and higher losses from trading in stocks. Alpha Bank, Greece’s third largest, said last month first-half group net profits fell 61 percent from a year ago to 51 million euros, but second-quarter results were higher over the first by 21 percent.
