Profit of National Bank of Greece falls
ATHENS: National Bank of Greece SA, Greece's largest lender by assets, said its ninemonth net profit fell 74% on sharply higher provisions for bad loans but otherwise met market expectations.
"Despite the exceptionally adverse economic climate in Greece, the NBG Group continued to generate profits in what is proving to be a very tough year, maintaining strong liquidity and an enhanced capital base while also fortifying its balance sheet with higher provisions," Chief Executive Officer Apostolos Tamvakakis said in a statement.
For the nine months to Sept. 30, the bank said net profit fell to €259 million ($343.1 million) from €1.01 billion in the same period a year ago. Provisions for bad loans totaled €991 million. The results were in line with analysts' expectations of €257 million in nine-month net profit and €999 million in provisions, according to a poll conducted by Dow Jones Newswires.
Nonperforming loans have been increasing in the Greek banking system because the economy is expected to contract by 4% of gross domestic product this year and unemployment is rising. This contraction has been aggravated by austerity measures imposed on the debtladen Mediterranean country by its lenders, the International Monetary Fund and the European Union.
However, nine-month net interest income-the difference that the bank earns between its loans and deposits-rose 7% to €3.11 billion, exactly matching market expectations.
Market leader NBG is the last of Greece's four main banks to report third-quarter results and is seen as a bellwether for the local banking sector. It recently completed an €1.8 billion capital increase and plans to sell as much as a 20% stake in its Turkish subsidiary Finansbank AS.
Last week, Greece's No. 3 and No. 4 lenders Piraeus Bank SA and Alpha Bank SA also reported sharply lower results on higher provisions. -PB News
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