National Bank of Greece 2018 results highlight the ongoing challenge of reducing legacy bad loans.
The bank is under pressure from the European Central Bank to reduce its so-called non performing exposures (NPEs).
In fiscal 2018 NBG’s NPE ratio is down by 3 percentage points to 40.9% from fiscal 2017. NBG is targeting a reduction to below 15% by 2021.
The definition of NPEs includes non-performing loans and other loans likely to turn sour.
National Bank of Greece 2018 results include group core operating profit of €114m (FY17 -€103m).
National Bank of Greece 2018 results: highlights
Deposits increase by 8.6% year-on-year to €43.1bn reflecting deposit inflows of €3.4bn , despite continuous capital control relaxation.
Net fees are up by 5% year-on-year. Total assets rise by 6% to €65.1bn.
On the other hand, the net interest margin falls to 2.67% (FY 3.2%).
Branches rightsizing continues with NBG reducing its branch estate to 440 from 486 outlets at the end of 2017.
NBG Transformation Programme 2019-2022
A large scale transformation programme will set out an ambitious set of financial and business targets for 2019-2022.
The programme will be released to investors and analysts on 16 May.
“2019 is a pivotal year. NBG will capitalise on balance sheet strengths and make
significant progress on improving operating profitability and reducing NPEs
“P&L operating trends will improve markedly, driving FY19 group operating profit significantly higher yoy,” says Paul Mylonas NBG CEO.
“Fees will be supported by loan origination, budgeted at €3.6bn in 2019. NBG’s new NPE operational targets are front-loaded and more aggressive. The aim is for an NPE reduction by €11,5bn by year end 2021. The NPE ratio will be in the low
teens by 2021, and near mid-single digits by 2022.”
The Greek bank rescue fund continues to hold a 40% stake in NBG.