ECONOMY

Post Office Savings Bank upbeat on net profits, will press on with modernization

Net profits this year are expected to exceed 50 billion drachmas, the Post Office Savings Bank said yesterday, notwithstanding a sharp plunge in year-2000 profits. The bank was equally optimistic over deposit and loan targets, with forecasts of more than 3 trillion drachmas and 450 billion drachmas, respectively. The confident projections came as net profits last year were more than halved to 21.7 billion drachmas from 45.1 billion drachmas in 1999, the result of the bank’s decision to steadily ease in interest rate cuts. The cause of the net profit drop can be attributed to a policy of gradually trimming deposit interest rates in 2000, compared with the more rapid cuts across the market in general, the Post Office Savings Bank said in a statement yesterday. The bank also underscored its determination to transform into a modern financial institution, noting that an ongoing program to modernize both its framework and operations was developing smoothly, following the appointment of a new managerial team late last year. Proof of the success of the new strategy was evident in deposit figures which reached 3 trillion drachmas in the first eight months of 2001. The bank also broadened its range with the launch of new products this year while asset management has been improved. The Post Office Savings Bank is currently in talks with the Post Office over possible cooperation in the sale and distribution of financial products. The bank is scheduled to be converted into a limited liability company next year and floated on the Athens Stock Exchange in early 2003. Monokroussos noted that the Bank of Greece-monitored core inflation dropped to 3.8 percent from 4 percent in August, while Mylonas reported a more conservative estimate of 4 percent, down from 4.1 percent.