Greece’s National Bank announced on Wednesday its operating profits (pre-provisions) grew 11 pct in the January-September period to 633 million euros, reflecting the positive performance of net commission income (+52 pct on an annual basis) and a significant reduction in operating spending (-9.0 pct on an annual basis).
The bank said domestic deposits rose by 500 million euros on a quarterly basis and by 1.2 billion euros since 2015 with the introduction of capital controls in the country. Borrowing from the ELA mechanism fell by 4.6 billion euros so far this year to just 1.0 billion euros in October, while funding form the Eurosystem was 4.7 billion euros, from 12.3 billion at the end of 2016.
National Bank added that an expected completion of dis-investments in National Insurance, Banca Romaneasca and Vojvodjanska Banka will strengthen its liquidity by around 1.7 billion euros.
NPEs continued dropping in the third quarter of 2017 to 200 million euros compared with the second quarter, reflecting successful loan restructuring and write-offs. The growth rate of new NPEs remained negative in the third quarter of 2017 to -119 million euros from -14 million in the second quarter. National Bank said it was exceeded a target set by the Single Supervisory Mechanism to reduce NPEs in 2017.
Consolidated results from continuing operations recorded a loss of 178 million euros in the nine-month period.
“National Bank of Greece’s results demonstrate increasing balance sheet strength, underscoring the Bank’s comparative advantages ahead of the domestic economic recovery. NBG was the first Greek Bank to re-access the markets through a covered bond issuance in October; the Bank raised 750 million euros at 2.9 pct yield, with the majority of interest coming from international investors. The transaction served NBG’s strategic objective of re-establishing a recurring presence in the international debt capital markets. At the same time, the issue accelerated the path to full disengagement from the ELA, currently at 1 billion. The completion of all agreed divestments will achieve this goal decisively, as well as boost capital significantly. In terms of asset quality, NPE reduction continued unabated for a sixth consecutive quarter, with the stock of NPEs dropping by a cumulative 3.5 billion euros since 2015. Notably, curing contributed more than half of this quarter’s NPE reduction. NPE coverage remains at a sector-high of 57 pct in Greece, enhanced by 40bps compared to the previous quarter. Regarding P&L performance, NBG managed to increase domestic core PPI by 11% year on year, despite sustained deleveraging that impacted NII, displaying fee income recovery and solid cost reduction trends. CET1 ratio stands at 16.8 pct, excluding the positive impact of the agreed capital actions expected to complete by early 2018. These will provide additional capital buffer that will be utilized in the upcoming regulatory exercises,” Leonidas Fragkiadakis Chief Executive Officer mentioned in an announcement.
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Source: ANA-MPA
