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Greek bank NBG posts EUR 537m quarterly loss

30 May 2012, 17:01 CET
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(ATHENS) - Greece's biggest bank NBG Wednesday reported a net loss of 537 million euros ($666 million) in the first quarter of 2012 due to lower earnings and higher provisions set aside to cope with the recession.

National Bank of Greece (NBG) logged "losses of 537 million euros, due to the marked negative impact of trading income in Greece and the 47 percent increase, on an annual basis, in the group's provisions," it said in a statement.

"Trading and other income posted particularly negative performance," it added, while it was forced to set aside the higher provisions "due to the extremely harsh economic climate in Greece."

Greece is in its fifth year of recession.

In March its banks participated in a debt restructuring, part of a broader international bailout agreement involving the EU's Financial Stability Fund (EFSF) that aimed to rescue the economy from collapse.

The restructuring cut Greece's sovereign debt by 107 billion euros, inflicting heavy losses on private lenders such as NBG and other banks that are now in turn receiving EFSF funds to recapitalise them.

The four biggest Greek banks received a first share of 18 billion euros ($22 billion) of this aid on Monday.

NBG received 7.43 billion euros, Piraeus bank 4.7 billion, Eurobank 3.97 billion and Alpha 1.9 billion, said an official of the Hellenic financial stability fund, the Greek body charged with distributing the loans.

"Against a backdrop of extreme uncertainty, NBG continues to encounter unprecedented challenges," the bank's earnings statement said.

"The recent capital injection from the Financial Stability Fund has restored the group's capital adequacy following the write-off against our capital," it added.

NBG, which has banking operations in southeastern Europe and Turkey, suffered huge losses of 12.3 billion euros in 2011. Of this, 11.7 billion euros of losses were recorded in anticipation of the sovereign debt write-off.

In recent weeks customers worried about economic and political uncertainty pending an election on June 17 have been withdrawing millions in deposits.

"NBG possesses sufficient reserves of liquidity to cope with any eventuality, in spite of the deposit flows observed over the past three weeks -- a phenomenon, however, that appears to be losing momentum," the bank said.


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