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Nat. Bank Of Greece (NBGA)

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Wednesday 21 February, 2007

Nat. Bank Of Greece

Financials 2006 (unaudited)

National Bank Of Greece
21 February 2007



National Bank of Greece


Press release

Financials 2006 (unaudited)

Net profit up 36% to €990 million
+---------------------------------+------+------+---------+
|(€ millions)                     |  2006|  2005|     +/-%|
+---------------------------------+------+------+---------+
|Net profit (after tax & minority |   990|   727|     +36%|
|interests)                       |      |      |         |
+---------------------------------+------+------+---------+
|5-month net profit of Finansbank |   156|     -|        -|
+---------------------------------+------+------+---------+
|Finansbank (NBG 56% proportion)  |    87|     -|        -|
+---------------------------------+------+------+---------+
|NBG net profit ex. Finansbank    |   914|   727|     +26%|
+---------------------------------+------+------+---------+
|Net profit from SE Europe        |   108|    73|     +47%|
+---------------------------------+------+------+---------+
|Return on equity                 | 28.7%| 28.6%|  +10 bps|
+---------------------------------+------+------+---------+
|Cost / Encome                    | 50.7%| 53.3%| -260 bps|
+---------------------------------+------+------+---------+


The record performance of 2006, with net profit rising to close on €1 billion,
reaffirms the soundness of our strategy in Greece and the wider region, and
underscores our commitment to delivering value to our shareholders.

The profits from our business in Greece continue to grow at a vigorous pace. At
the same time, the contribution to Group profitability by our operations outside
Greece, in SE Europe and Turkey, further increased to close on €200 million, or
20% of total Group profits. Specifically, net profits from SE Europe topped €108
million, up 47% on 2005. This increase derives exclusively from organic growth.

Finansbank, consolidated within the NBG Group for the first time, posted a
particularly encouraging performance. Its profit for the 135 days of the year
during which it was part of the Group more than lived up to our expectations,
exceeding €156 million. Of this amount, €87 million corresponds to the Group on
the basis of its shareholding in Finansbank prior to the tender offering to
minority shareholders which was concluded with great success in January 2007.

The achievements of 2006 and the rising trajectory of the Group comprise the
basis of the new 3-year Business Plan 2007-2009 that will be announced tomorrow.

I would like to take this opportunity to thank my colleagues and staff of the
Group in Greece and abroad for their hard work over the past year, without which
these results would not have been possible.



                                                           Athens, February 2007

                                                                 Takis Arapoglou

                                                                Chairman and CEO





+---------------------------+------+-----+-----+
|                           |  2006| 2005|+/- %|
+---------------------------+------+-----+-----+
|NBG Group net profit       | 1 014|  727| +40%|
|(excluding Finansbank)     |      |     |     |
+---------------------------+------+-----+-----+
|Finansbank contribution:   |      |     |     |
+---------------------------+------+-----+-----+
|Profit after tax           |   156|     |     |
+---------------------------+------+-----+-----+
|NBG's share (55.7%)        |    87|     |     |
+---------------------------+------+-----+-----+
|Contingent liability & PPA |  (11)|     |     |
|expenses                   |      |     |     |
+---------------------------+------+-----+-----+
|Tax on reserves            | (100)|     |     |
+---------------------------+------+-----+-----+
|NBG Group profit           |   990|  727| +36%|
+---------------------------+------+-----+-----+

Group net profit after tax and minority interests grew to €990 million in 2006,
up 36%. This figure includes €87 million profit of Finansbank, representing a
Group share of 55.7% for the period of 135 days from the completion of the
acquisition of the minority shareholding on 18 August 2006 to the end of the
year. Finansbank's total profits for the same period amounted to €156 million.
On an annual basis, this profitability amounts to around €420 million.

If one excludes the contribution of Finansbank as well as the one-off €100
million tax payment on the Bank's reserves, Group profit in 2006 topped €1,014
million, up 40% on 2005.

On a quarterly basis, Group net profit (ex. Finansbank and the tax on reserves)
grew by 11% to €264 million, despite the additional €76.5 million cost of the
new collective labour agreement, the proposed bonus to staff and the stock
options plan for staff. These results reflect first and foremost strengthening
core income, which pushed up interest income and commission income by 12% on the
previous quarter.

Group operating costs grew by 6% on an annual basis, despite the 17% higher
operating costs in SE Europe due to the expansion of the Group's business in the
region and the investments this entails. These costs do not include the one-off
cost of various voluntary early retirement schemes at Group subsidiaries (€32
million) and the cost of compliance of the Group with the provisions of Basel II
and the Sarbanes-Oxley Act (€15 million). The positive storyline vis-a-vis
containment of operating costs is reflected in the Group's cost/income ratio,
which stood at 50.7%, a 2.6 percentage point improvement on the previous year.

Strong core income leads profitability to record highs

The Group's core income growth derives from steadily strengthening interest
income and commission income. Group net interest income (NII) totalled €1,892
million, up 19% on 2005. The stronger interest income reflects ongoing growth in
the loan book, particularly retail.

The upward dynamic in interest income is reflected in the 10% growth posted
between Q3 and Q4 2006, leading NII to a record high of €527 million in Q4,
excluding the interest income of Finansbank and in spite of the two ECB interest
rate increases in the last quarter of 2006. Notably, net interest margin reached
a record high of 3.76% at the end of Q4 2006 compared with 3.50% in Q3 and 3.16%
for full-year 2005.


+----------------------+---------+---------+----+
|Commission income (€  | 31.12.06| 31.12.05|+/-%|
|millions)             |         |         |    |
+----------------------+---------+---------+----+
|Retail loans          |    107.4|    105.9|  1%|
+----------------------+---------+---------+----+
|Corporate loans       |     87.4|     76.1| 15%|
+----------------------+---------+---------+----+
|Intermediation &      |    151.6|    137.2| 10%|
|deposits              |         |         |    |
+----------------------+---------+---------+----+
|Investment banking    |     78.2|     66.6| 17%|
+----------------------+---------+---------+----+
|Fund management       |     58.7|     39.2| 50%|
+----------------------+---------+---------+----+
|Total commission      |    483.3|    425.1| 14%|
|income                |         |         |    |
+----------------------+---------+---------+----+

In 2006, net commission income amounted to €483 million. While stiff and
generalized competition had an adverse impact on retail commissions, the
favorable contribution of other fees and commissions, particularly mutual fund
commissions, offset the drag and helped push up commission income by 14% on 2005.

Commission income in Q4 2006 painted a particularly impressive picture, growing
by around 20% on the preceding quarter. All categories of commissions posted
improvements, the most important being retail commissions (up 23%) and
intermediation fees and commissions (up 16%).

Retail banking growth continues to stride ahead

Total Group loans (ex. Finansbank) topped €37 billion, up 20% on 2005. Over the
same period, retail lending posted spectacular growth of 25%.

+-------------------+---------+---------+----+
|Group loans (€     | 31.12.06| 31.12.05|+/-%|
|millions)          |         |         |    |
+-------------------+---------+---------+----+
|Retail             |     23.2|     18.6| 25%|
+-------------------+---------+---------+----+
|Corporate          |     13.6|     12.0| 13%|
+-------------------+---------+---------+----+
|Total loans        |     36.7|     30.6| 20%|
+-------------------+---------+---------+----+
|% Retail / Loans   |    63.1%|    60.9%|   -|
+-------------------+---------+---------+----+
|% net NPLs         |     0.8%|     1.1%|   -|
+-------------------+---------+---------+----+

Mortgage lending continued to be the driving force behind growth in the retail
loan book, representing 39% of total loans. In December 2006, the mortgage
portfolio (ex. Finansbank) stood at €14.4 billion, up 22% on an annual basis,
confirming the supremacy of NBG in the mortgage lending market, in which it has
a 24% share. In 2006, disbursements of new mortgages surpassed €3.5 billion, of
which €1.1 billion were disbursed in Q4, posting q-o-q growth of around 22%.

Consumer loans and credit cards outstanding (ex. Finansbank) totalled €5.8
billion at 31 December 2006, up by around 21% on the previous year,
strengthening both interest income and commission income. This performance
mainly reflects the growth in personal loans as a result of programmes whereby
customers can transfer balances from competitors, thus highlighting the trust
that consumers have in NBG.

Reaching out dynamically to SMEs

Group lending (ex. Finansbank) to corporates and professionals grew to €16.5
billion at 31 December 2006. Key players in this growth were the domestic SME
loan book (i.e. financing to professionals and businesses with turnover below
€2.5 million) and medium-sized enterprises (i.e. financing to firms with
turnover of €2.5-€50 million), which posted impressive growth of 45% and 25%,
respectively, on an annual basis.

The corporate loan book topped €9.6 billion, posting annual growth of 9%.
Further growth in this loan book is planned by leveraging cross-selling
potential, with an emphasis on profitable categories of Project Finance and
Cross-Border Trade, tapping the synergies offered by corresponding specialized
units at Finansbank.

Number 1 in deposits and mutual funds

The Group succeeded in increasing its market share in funds under management by
4.4 percentage points to 29% despite the overall conditions in the sector,
thereby gaining first place. It is particularly important that there has been a
gain in market share in equity, bond and other securities funds, which rose from
10.9% to 12.7% in 2006.

In 2006, Group deposits (ex. Finansbank) grew by 9% to €47.3 billion. This
upward trend kept the loans-to-deposits ratio at 78%, thus providing the Group
with margins for further growth in lending at competitive prices.

Ongoing improvement in the Group's efficiency

The Group's business growth and expansion in SE Europe, combined with increased
staff costs in Greece resulting from the new CLA led to a 6% rise in operating
expenses.

+------------------+---------+---------+--------+
|Operating expenses| 31.12.06| 31.12.05|    +/-%|
|(€ millions)      |         |         |        |
+------------------+---------+---------+--------+
|Staff costs       |    937.3|    861.8|      9%|
+------------------+---------+---------+--------+
|Administrative    |    395.1|    374.3|      6%|
|expenses          |         |         |        |
+------------------+---------+---------+--------+
|Depreciation      |    105.3|    114.6|     -8%|
+------------------+---------+---------+--------+
|Total operating   |  1 437.7|  1 350.7|      6%|
|expenses          |         |         |        |
+------------------+---------+---------+--------+
|Cost / Income     |    50.7%|    53.3%| -260 bp|
+------------------+---------+---------+--------+

Specifically, staff costs grew by 9% to €937 million at the end of 2006. This
amount includes expenses arising from NBG's stock options programme (€7 million)
and wage increases resulting from the new CLA (€30 million) as well as the
proposed performance-based bonus for Group staff. These expenses increased staff
costs in the last quarter of the year.

Despite the growth in expenses, the Group's efficiency ratio improved by 2.6
percentage points, standing at just over 50%. Specifically, at the end 2006, the
efficiency ratio stood at 50.7%, compared with 53.3% at 31 December 2005.

Strong profitability in SE Europe

All the SE European units posted outstanding growth in profitability despite the
substantial cost of the Group's organic growth in the region. Net profit after
tax of our SE European units amounted to €108 million in 2006, up 47% on the
previous year.

Organic expansion in SE Europe remains a strategic priority for NBG. In the past
12 months, 95 new branches were opened boosting the total number of
up-and-running units to 352 by the end of 2006. With the addition of
Vojvodjanska's 168 units in Serbia, the Group's force in the region now totals
520 branches, almost the same size as the NBG network in Greece.

In 2006, Group lending in the region posted growth of 44%, reaching €3.1
billion. Once again, retail lending was the driving force behind loan growth,
with the overall retail loan book growing by a spectacular 52% annually. It is
particularly encouraging that, over the course of the year, the surge in loans
was accompanied by a decline in the percentage of non-performing loans to less
than 4%.

The acquisition of Finansbank puts Group profitability on a new trajectory

The net profits of the Finansbank Group (which has been acquired by NBG) for the
135-day period between the date of completion of the acquisition and the end of
2006 totalled TRY 291 million (€156 million). NBG's share, on the basis of the
integration percentage (55.7%) prior to the recent public tender offering to
minority shareholders, amounts to TRY 162.1 million (€87 million).

In the public tender offering that was completed recently, 43.4% of the minority
shareholders responded positively, thus increasing the NBG Group's stake in
Finansbank to 89.4%. Given that by a relevant shareholders' agreement the Group
is entitled to purchase the minority shares, henceforth it will consolidate, in
line with the provisions of IFRS, 99% of Finansbank's profits into those of the
NBG Group.

The positive trend in the Group's profitability reflects dynamic growth in
Finansbank's business, which was mainly driven by retail banking. Finansbank's
overall retail lending volumes increased spectacularly to TRY 4.3 billion (€2.3
billion), up 76%, exceeding the 50% increase in lending volumes targeted for
2006. In particular, Finansbank's share in new mortgage loans rose to 14.5%, as
a result of which the bank's respective portfolio more than doubled and its
market share stood at around 9% at the end of 2006.

Besides mortgage lending, growth was also recorded in almost all of Finansbank's
retail banking market shares. Specifically, the bank now holds a market share of
7.4% (up 0.8%) in credit cards and 6.7% (up 0.9%) in car loans, while the rest
of its consumer loan volumes tripled during 2006.

Business credit also achieved outstanding results, posting 48% annual growth to
TRY 7.9 billion.

In spite of this accelerated growth, Finansbank managed to enhance the quality
of its loan portfolio, with the NPL ratio dropping from 2.6% in 2005 to a low
2.1% in 2006.

Total deposits grew from TRY 6.2 billion to TRY 10.3 billion (€5.5 billion), up
67%.

In parallel with these developments, the bank continued to expand its branch
network at an impressive rate. It opened 101 new branches in 2006, of which 45
were opened between August and the end of the year, resulting in a total of 309
branches at 31 December 2006.

The strengthening of the bank's physical presence should further boost its
profitability and customer base. In 2006, Finansbank's customers increased by
14%, today numbering over 3.3 million.

Enhanced capital adequacy ensures further growth for NBG Group

+-----------------+---------+---------+
|Capital adequacy | 31.12.06| 31.12.05|
|ratios           |         |         |
+-----------------+---------+---------+
|Tier-I CAD Ratio |    12.3%|    12.3%|
+-----------------+---------+---------+
|Total CAD Ratio  |    14.6%|    15.2%|
+-----------------+---------+---------+

Following the share capital increase and the acquisition of a 56% stake in
Finansbank, the Tier-I CAD ratio stands at 12.3%, the same as at 31 December
2005. If the acquisition, via the recent public tender offering, of a further
43.4% share in Finansbank is taken into account, i.e. consolidation of 99%, the
Tier-I CAD ratio is estimated to stand at 8% and the Total CAD ratio 10.3%.




Group income statement    
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|€ millions     |  12m.06|   12m.05| +/-%|  |      Q4.06|      Q3.06|   +/-%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Net interest   |   1 892|    1 596|  19%|  |        527|        478|    10%|
|income         |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Net commission |     483|      425|  14%|  |        133|        112|    19%|
|income         |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Net premiums   |     106|      100|   6%|  |         26|         23|    13%|
|from insurance |        |         |     |  |           |           |       |
|contracts      |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Dividend income|      10|       14| -30%|  |          0|          1|   -82%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Income from    |      50|       64| -23%|  |         11|          6|    86%|
|private equity |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Other income   |     131|       97|  35%|  |         53|         18|   205%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Earnings from  |     123|      195| -37%|  |         47|         18|   165%|
|financial      |        |         |     |  |           |           |       |
|transactions   |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Total income   |   2 795|    2 492|  12%|  |        798|        656|    22%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Staff costs    |   (937)|    (862)|   9%|  |      (299)|      (215)|    39%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Administrative |   (395)|    (374)|   6%|  |      (116)|       (97)|    20%|
|expenses       |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Depreciation   |   (105)|    (115)|  -8%|  |       (25)|       (25)|    -2%|
|and            |        |         |     |  |           |           |       |
|amortization   |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Total operating| (1 438)|  (1 351)|   6%|  |      (439)|      (337)|    31%|
|expenses       |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Impairment     |   (258)|    (226)|  14%|  |       (64)|       (63)|     2%|
|losses on loans|        |         |     |  |           |           |       |
|& advances     |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Share of profit|      41|       44|  -7%|  |         15|         18|   -17%|
|of associates  |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Profit before  |   1 141|      959|  19%|  |        309|        274|    13%|
|tax &          |        |         |     |  |           |           |       |
|extraordinaries|        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Tax            |   (182)|    (224)| -19%|  |       (47)|       (34)|    37%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Minority       |    (14)|     (24)| -41%|  |          1|        (3)|      -|
|interests      |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Profit before  |     944|      711|  33%|  |        264|        237|    11%|
|extraordinaries|        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+


Extraordinaries
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Net profit from|     118|       29| 307%|  |          -|          -|      -|
|discontinued   |        |         |     |  |           |           |       |
|operations     |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|VRS            |    (32)|     (13)| 158%|  |          -|       (17)|      -|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|SOX & Basel II |    (15)|        -|    -|  |       (15)|          -|      -|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Tax on reserves|   (100)|        -|    -|  |      (100)|          -|      -|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Net profit     |     914|      727|  26%|  |        148|        220|   -33%|
|attributable to|        |         |     |  |           |           |       |
|shareholders   |        |         |     |  |           |           |       |
|(pre           |        |         |     |  |           |           |       |
|               |        |         |     |  |           |           |       |
|Finansbank)    |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|5-month net    |     156|        -|    -|  |        100|         56|    78%|
|profit of      |        |         |     |  |           |           |       |
|Finansbank     |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Minority       |    (69)|        -|    -|  |       (38)|       (31)|    24%|
|interests of   |        |         |     |  |           |           |       |
|Finansbank     |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Contingent     |    (11)|        -|    -|  |       (11)|          -|      -|
|liability & PPA|        |         |     |  |           |           |       |
|expenses       |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Net profit     |     990|      727|  36%|  |        199|        245|   -19%|
|attributable to|        |         |     |  |           |           |       |
|NBG            |        |         |     |  |           |           |       |
|shareholders   |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+




Group loans (from continuing operations)              
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|(€ millions)   |        | 31.12.06|     |  | 31.12.06 *| 31.12.05 *|   +/-%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Mortgages      |        |   15 381|     |  |     14 444|     11 820|    22%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Consumer       |        |    4 709|     |  |      4 156|      3 238|    28%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Credit cards   |        |    2 533|     |  |      1 599|      1 536|     4%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Small          |        |    2 952|     |  |      2 952|      2 041|    45%|
|businesses     |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Retail         |        |   25 575|     |  |     23 151|     18 635|    25%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Corporate      |        |   18 482|     |  |     13 567|     11 978|    13%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Total loans &  |        |   44 057|     |  |     36 717|     30 614|    20%|
|advances to    |        |         |     |  |           |           |       |
|customers      |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Less: Allowance|        |    1 493|     |  |      1 096|      1 086|     1%|
|for impairment |        |         |     |  |           |           |       |
|on loans &     |        |         |     |  |           |           |       |
|advances to    |        |         |     |  |           |           |       |
|customers      |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Loans &        |        |   42 564|     |  |     35 622|     29 528|    21%|
|advances to    |        |         |     |  |           |           |       |
|customers (net)|        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|*excluding     |        |         |     |  |           |           |       |
|Finansbank &   |        |         |     |  |           |           |       |
|Vojvodanska    |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+



Group deposits (from continuing  
operations)                       
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|(€ millions)   |        | 31.12.06|     |  | 31.12.06 *| 31.12.05 *|   +/-%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Savings        |        |   25 614|     |  |     25 326|     25 916|    -2%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Sight          |        |    7 671|     |  |      6 818|      6 109|    12%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Core deposits  |        |   33 285|     |  |     32 143|     32 025|     0%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Time           |        |   19 314|     |  |     14 580|     10 704|    36%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Total deposits |        |   52 599|     |  |     46 723|     42 729|     9%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Repos          |        |       82|     |  |         75|        247| -69.8%|
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Other due to   |        |      556|     |  |        464|        374|    24%|
|customers      |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+
|Total due to   |        |   53 236|     |  |     47 263|     43 350|     9%|
|customers      |        |         |     |  |           |           |       |
+---------------+--------+---------+-----+--+-----------+-----------+-------+

*excluding Finansbank & Vojvodanska    



END




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