ATHENS--National Bank of Greece SA, Greece's largest lender,
swung to a robust fourth-quarter profit of more than half a billion
euros thanks to a series of tax benefits carried over from earlier
years that helped offset continuing large provisions for bad
loans.
The bank said it earned 547 million euros ($754 million) in the
three months to the end of December last year, compared with an
EUR81 million loss in the third quarter, reflecting EUR531 million
in income from deferred tax assets and exceptional items.
Excluding those accounting gains, the bank had a net profit of
EUR16 million in the final quarter of 2013, compared with EUR8
million in the third quarter. Provisions remained high at EUR388
million in the fourth quarter, little changed from the
July-September period.
Due to a series of mergers and material changes to Greece's
banking system, NBG's latest earnings aren't directly comparable
with year-earlier data.
After a deep, six-year recession, the pricking of the Greek
property bubble, withdrawals by depositors and a EUR200 billion
sovereign-debt restructuring, Greece's banks are struggling. Last
year, they were recapitalized with the help of a European Union
loan, but together the banks still hold some EUR70 billion in bad
loans, a sum equal to a third of Greece's annual gross domestic
product.
Earlier this month, Greece's central bank said the country's
four big lenders-NBG, followed by Piraeus Bank SA, Alpha Bank AE
and Eurobank Ergasias-would need to raise another EUR5.8 billion to
shore up their fragile balance sheets and cope with that mountain
of bad loans The Bank of Greece said the four banks would need to
present plans by mid-April detailing how they would raise that
capital, such as by selling assets, going to the capital markets or
appealing for further state aid.
Eurobank, now under state control, faces the biggest shortfall
and needs €2.9 billion in capital. Market leader NBG must raise
some €2.2 billion, the central bank said.
Since then, Piraeus Bank, Alpha Bank and Eurobank Ergasias have
all announced capital hikes; NBG, however, has said it can manage
without raising fresh funding.
NBG said its fourth-quarter net interest income, which
represents the bank's core revenue, was flat at EUR776 million
compared with EUR772 million in the third quarter.
Greek banks are hoping that as Greece's economy emerges from
recession later this year, the volume of bad loans on their balance
sheets will begin to decline, helping to return them to
profitability.
Write to Alkman Granitsas at alkman.granitsas@wsj.com.
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