Greece’s National Bank hits Turkish jackpot

ISTANBUL - Daily News with wires
Hurriyet Gazetecilik A.S.

National Bank of Greece, or NBG, the country’s largest lender by assets, said its first-quarter net profit rose 39 percent on a strong performance of its Turkish unit, Finansbank, reported Greece’s Kathimerini newspaper Friday.

National Bank of Greece has seen a strong first quarter rise in net profits thanks to the success of its Turkish unit.

An NBG statement said net profit reached 157 million euros in January-March 2011, compared with 114 million euros in the first quarter of 2010. Analysts were expecting a figure of around 116 million euros.

Profit at its Finansbank unit in Turkey advanced by 28 percent to 151 million euros as deposits increased 26 percent and business lending rose 16 percent. Finansbank posted profits of 151 million euros, compared with 2 million euros in crisis-afflicted Greece and 6 million euros in Southeastern Europe.

“We have successfully absorbed the negative impact of the economic crisis and further reinforced our already solid capital base,” said Apostolos Tamvakakis, chief executive officer of the NBG, Bloomberg reported Friday. “The challenges that lie ahead nevertheless remain formidable.”

The NBG increased its profits through drastic cuts in operational costs, Tamvakakis said. The bank had managed to weather the crisis in a “satisfactory” way so far, but warned that significant challenges remain ahead, he said.

“NBG plans to take new initiatives to strengthen the Greek banking system and tackle the economic crisis,” he said in a statement on Thursday.

Greece’s fourth-biggest lender Piraeus Bank, meanwhile, reported Friday a dramatic drop in first-quarter net profit to 2 million euros ($2.8 million), 73 percent lower than a year earlier, Agence France-Presse.

The group said that its tax burden had increased to 8 million euros in the first three months of the year, compared to just 2 million euros in 2010.

Political leaders in Greece on Friday failed to find common ground on austerity measures needed to avert a new debt crisis, a party chief who the attended emergency talks said.

“Sadly, some people have placed their posts above Greece,” George Karatzaferis, leader of the nationalist Laos party, told reporters after the meeting between the country’s main parties and President Carolos Papoulias.

The opposition parties have mostly refused to support the government in its quest to cut spending by trimming an overblown civil service while a sweeping privatization drive announced this week has attracted even stronger protests.

The talks were held after the International Monetary Fund warned Thursday that it could not extend further bailout funds to Greece unless the government could deliver on its commitments to reduce debt.

2 comments

  1. Socialistic View

    The opposition to privatisation in Greece is justified. The IMF, being the leading representative of the private and capitalist system will always recommend and if possible insist on the privatisation of government instrumentalitys This is for their benefit, not necessarily of benefit of the Greek citizens. There are many examples of national companies that have been privatised and have performed less profitably than before privatisation.
    Once the national assets are sold they gone forever and where they were once utilised for the benefit of the citizens they would be exploited and the profits given to shareholders of the privatised companies.

  2. It is a pleasant change for Greece to profit by its interaction with its Turkish neighbour.
    It is not acknowledged of widely known that as peoples, the Greeks and Turks have for centuries lived peacefully during the reign of the Ottoman Empire, that is before its dissolution and the rise of nationalism under Kemel Ataturk and in Cyprus until the 1950, under British administration. They have much in common as the Ottoman Empire was greatly influenced by the Byzantine civilisation which was Hellenic based and also Islam which the invading Turkman tribes accepted was also influenced by Hellenism. So it is not a mystery why these two peoples lived so harmoniously together.