Buffeted by an exceptionally adverse economic environment, extraordinary tax charges and substantial losses incurred from the fall in the price of Greek sovereign bonds, the NBG Group nevertheless succeeded in posting profitability in the first half of this extremely difficult year, maintaining strong liquidity and robust capital adequacy while fortifying its balance sheet with higher provisions in the face of a deteriorating asset quality picture in Greece.

This performance is the result of the Group’s strong core profitability before provisions and trading losses, in Greece and abroad. Within an environment of widespread uncertainty, the Group’s core profitability grew by 6%, fully absorbing extraordinary tax charges, mark-to-market valuation losses and record high provisions.

Under these conditions, the resilience of NBG’s core sources of profitability in Greece, coupled with the ongoing dynamic growth of Finansbank in Turkey and the stabilization of the economies of SE Europe, improves the outlook for profitability in the rest of the year.

The Group performance during the recent Pan-European stress tests demonstrates that our strong capital base can absorb even the most severe credit losses and a further deterioration in the macroeconomic fundamentals of the country. Even so, the situation allows no room for complacency. As such, the preservation of sufficient liquidity reserves and the bolstering of our capital base remain top priorities. The recent successful issuance of a €450 million 10 year subordinated note – the first since the crisis began – represents a step in this direction.

Without underestimating the difficulties or the magnitude of the challenges ahead, the first positive indications of the deployment of the fiscal adjustment measures and structural reforms and the positive response of the international community to these allow us to expect that during the rest of the year the extreme conditions seen in the first half of the year, with their inevitable impact on the banking sector, will not recur. 

Athens, 27 August 2010
Apostolos Tamvakakis
 Chief Executive Officer

Press Release

Presentation (pdf)