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The National Bank of Greece’s positive balance for the second consecutive quarter is evidence of the improvement in the economic climate. In the first quarter of the year, profits amounted to 186 million euro compared to losses amounting to 265 million euro in the same period of 2012.

In a statement, CEO of the bank Alexandros Tourkolyas noted that the already visible improvement in the economic climate confirms the belief that Greece has made significant progress in its efforts to develop and become competitive.

"Along with the progress of a number of macroeconomic elements, a gradual but steady return of deposits and relative improvement of the quality of the loan portfolio is being seen in the banking sector," he added. According to Tourkolyas, the National Bank is continuing to take initiatives in order to increase its profits. Great progress has been made in terms of productivity: functional costs have been reduced by about 25% since the beginning of the crisis. Furthermore, the NBG has taken a number of measures aimed at improving its capital stock. "It is important to emphasise that the National Bank has an advantage in terms of liquidity, since the indicator Loan-To-Deposit Ratio in Greece is 95%," said Tourkolyas. As for the capital increase of the group, Tourkolyas noted that the completion of the recapitalisation of the bank will allow it to play a major role in the Greek economy.

The first quarter

• Stabilisation of organic revenues in Greece, amounting to 385 million euro for the first quarter of 2013;

• Finansbank’s profits amounted to 155 million euro – a 23% increase, despite last year’s significant profit;

• Positive contributions by activities in Southeast Europe - 13 million euro compared to losses in the corresponding period of 2012;

• Reduction of functional costs in Greece and Southeastern Europe by 10% and 3%, respectively, compared to the first quarter of 2012;

• Reduction of personnel costs by 12% in Greece; limiting of total costs by 5%, without taking into account the extra costs for the purchase of Eurobank Ergasias;

• Total reduction of internal operational costs by 34% since the beginning of the crisis (the first quarter of 2010);

• Reduction of outlooks in Greece for the first time since the crisis in the first quarter of 2013 (318 million euro compared to 419 million euro in the first quarter of 2012);

• Maintaining the high rate of coverage of risk requirements from forecasts of the group at 54%;

• Insertion of forecasts amounting to 276 million euro in those expected by the state, thanks to the improved credit capacity of the country;

• The pro forma basic indicator of private capital Core Tier I was converted to 9.3%;

• A voluntary offer for the purchase of hybrid bonds in the group as a first step of a number of initiatives by the group for the increase of its capital;

• An increase in the group’s deposits by 5% on an annual basis. A significant flow of domestic deposits after June 2012 - of about 3.3 billion euro (+9%);

• A significant reduction of funding from the Euro system - 7.2 billion euro from the peak of the crisis in June 2012 (from 34.7 billion euro to 27.5 billion euro) and the possibility of a further reduction of 9.8 billion euro;

• An improvement of the loans to deposits ratio in Greece to 95% versus 105% for the same period last year;

• Conversion of the delays indicator – from more than 90% to 19.8% for the group and to 24.3% for the internal portfolio.

The results of the first quarter

NBG Group released a profit for the second consecutive quarter, and net profits for the first quarter of 2013 were 186 million euro compared to losses amounting to 265 million euro in the first quarter of 2012.

Taking into account the reduction due to the acquisition of Eurobank, amounting to 159 million euro, net incomes amounted to 27 million euro. Finansbank’s contribution with a profit of 155 million euro was particularly positive, while banks' subsidiaries in Southeast Europe have a positive contribution after five quarters.

Furthermore, the progress that has been made within the financial adjustment, has led to Greece’s better credit opportunities.

In the first quarter of 2013, the bank’s net interest income was stabilised on a quarterly basis, creating reasonable expectations for the completion of the cycle of reductions. A crucial factor in this development was the reduction of the dependence on high-cost financing by the Emergency Liquidity Assistance (ELA) mechanism, while the reduction of the loan portfolio had a negative impact, just like repercussions of the bank’s involvement in the purchase of Greek government bonds and the increase of nonperforming loans.

The increase of deposits in the country, which started in the second quarter of 2012 with the removal of the political uncertainty in the country, is continuing in 2013. A 10% increase was noticed in fixed and demand deposits compared to the second quarter of 2012.

Finansbank is continuing its positive development

Finansbank's net profit amounted to 155 million euro – a 23% increase compared to the first quarter of 2012. These impressive results are based on the improvement of organic revenues by 21% on an annual basis as a result of the rise of both the net interest income by 28% and delivery by 13% on an annual basis, despite the loss of insurance incomes after the sale of Finans Pension in the third quarter of 2012.

The performance index (cost to income ratio) improved to 41% compared to 46% in the corresponding quarter of 2012. This improvement came despite the continued high inflation and expansion of the branch network to which 70 new units were added on an annual basis.

Finansbank’s total funding amounted to 43.5 billion Turkish lira (18.8 billion euro) and marked a 19% increase on an annual basis. As a result of the strategy of credit extension, the bank’s loan portfolio increased by 25% on an annual basis and reached 27.8 billion Turkish lira (7.7 billion euro). The late loans index increased to 5.8% compared to 5% in March 2012.

Total deposits recorded a 23% increase on an annual basis. The loans to deposits ratio was 101% compared to 114% a year ago.

The Capital Adequacy Ratio (CAR) changed to 19%, the highest among the main competitors. Finansbank’s strong capital base provided an important advantage in the development of its balance.

South East Europe: a focus on limitation of prices and improving liquidity

The group's activities in South Eastern Europe led to a profit of 13 million euro after five consecutive quarters of losses. An 11% increase in deposits on an annual basis (up to 5.3 billion euro) contributed to the overall improvement of the loans to deposits ratio, which amounted to 108% compared to 129% at the end of March 2012. The improvement of subsidiaries’ liquidity during the crisis led to their almost complete separation from funding by the parent company.