Greek banking sector turning a corner

Greek banking sector turning a corner

 

By Lefteris Yallouros – Athens

Three Greek banks released financial results for the second quarter and first six months of 2014 on Thursday.

Alpha Bank, Attica Bank and the National Bank of Greece (NBG) surprised the market by posting profits. Analysts had predicted that of the four systemic banks, Alpha, Eurobank, Piraeus and NBG, only the latter would be in the black.

NBG, said it had made a EUR 965 million net profit during the three months to June, while Alpha saw after tax earnings reach EUR 361.6 million in the quarter despite predictions pointing to a EUR 65 million loss.

Deferred tax assets helped inflate profits while surprisingly enough while both reported a slower growth rate in bad loans and improved net interest income.

NBG Chief Executive Alexandros Tourkolias said “the share capital increase carried out in May, together with the recognition of part of off-balance sheet deferred tax, enhanced the Group’s capital adequacy ratio to 16.2% at the end of the second quarter, among the highest capital adequacy ratios in Europe.”

“After the implementation of further measures contained in our business plan, I believe that we shall have sufficient levels of capital to address the challenges of the coming ECB stress tests as well as the need for a fair and rational restructuring of loans in arrears -an essential step in the effort to reboot effectively the Greek economy,” he added.

Alpha Bank CEO Dimitris Mantzounis said “we expect the growth to be positive between 1.5% and 2% in the second half of ’14. While at the same time over performance in fiscal targets will further support the confidence in the recovery story in the Greek economy. These trends are fully supported of our efforts to improve asset quality and contain non-performing loans and this is already reflected in our numbers”.

“On July 9th, the European Commission approved of our bank’s restructuring plan, we see this approval as a positive step towards the full restoration of Alpha Bank’s privately owned status” Mantzounis added.

Meanwhile, smaller lender Attica Bank posted profit of EUR 34.4 million in the first half against losses of EUR 22.3 million in H1 2013. The NPL ratio (loans in arrears for more than 90 days) stood at 24.5% as on June 30 2014.

The Bank’s financial figures and results for H1 2014 reflect the positive effects of internal reorganization actions, validate the estimates that had been expressed in the past based on the Bank’s planning, and confirm the Bank’s ability to continue on its autonomous course, an Attica statement reads.

Positive results for the three banks reflect progress made by the banking sector towards a full return to stability and growth after the six year-long recession in the economy and their huge debt restructuring. The next hurdle would be coming out of the European Central Bank’s stress test unscathed by the end of October, something Greek bankers are optimistic they will achieve.

Piraeus Bank and Eurobank are due to release their second-quarter results after the market close on Friday.