National Bank of Greece, the country's largest lender, missed forecasts as it said on Wednesday that Q1 net profit fell 93% on the year, at EUR21 mil. The bank said its net was burdened by extraordinary tax charges, mark‐to‐market valuation in the trading portfolio of Greek sovereign bonds, and continued high provisions for NPLs. More specifically, an extraordinary tax charge on 2009 profits plus backdated taxation of income from bonds burdened Q1 results with an extra EUR93 million in taxes, raising the total tax bill to EUR112 million for the first quarter. Profit before tax and provisions stood at EUR465 million, down 30% year‐on‐year, but substantially higher than the previous quarter (+74%). Group income deriving from banking business (excluding trading income) increased marginally, by 1% in the quarter, mainly because interest income was unchanged at the previous quarter’s level (+10% yoy). The Greek business experienced a loss amounting to EUR133 million, reflecting an extraordinary tax charge for 2009 and the backdated taxation of income from bonds in 2009 – together amounting to EUR93 million – as well as mark‐to‐market valuation losses of EUR154 million in the bond trading portfolio (compared with earnings of EUR72 million in Q1 09), and continued increases in provisions for NPLs, to EUR219 million (compared with EUR143 million in Q1 09). “Nevertheless, core income (before tax, provisions and trading income) grew by 5% qoq, reflecting the resilience of the Bank’s continuing sources of profitability in the face of the sharp slowdown in economic activity,” the bank said in a statement. The net profits of Finansbank in Q1 10 amounted to EUR122 million (TRY254 million), up 18% yoy and 32% qoq, preventing NBG’s Q1 from going into the red. Net profit of SE European units amounted to EUR32 million, bringing their profitability back to Q1 09 levels, despite increased provisions, which amounted to EUR49 million (+69% yoy). The Group made provisions of EUR314 million in Q1 10 compared with EUR235 million (+34%) in Q1 09. Accordingly, accumulated provisions are now close to EUR2.8 billion, i.e. 3.8% of the Group’s aggregate lending. The NPL coverage ratio is 63% without taking into consideration the various forms of associated collateral. “The results for the first quarter of what is proving to be an exceptionally difficult year for the Greek economy and financial system confirm that the NBG Group is a strong force that is sustaining its growth while playing a decisive role in the country’s efforts to overcome the current crisis,” the group’s CEO Apostolos Tamvakakis commented The pressure exerted on the Group’s revenue in Greece is balanced by the diversification of our business activities in the wider region, vindicating our strategic decisions of the past decade. |
National Bank of Greece - Profit down 93%
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