Laiki Bank Group announced € 1.091 million losses for the nine months of 2012, versus loss of € 292 million in the nine months of 2011.
According to a press release by the Bank, loss of the Group before the impairment of goodwill and other intangible assets stood at € 1.091 million for the nine months of 2012, versus loss of € 292 million in the nine months of 2011. After impairment of goodwill and other intangibles, the Group recorded a loss of € 1.671 million.
At the end of the nine months of 2012, profit for the Group before impairments stood at € 189 million versus € 367 million in the nine months of 2011, decreased by 48% on a yearly basis.
The Bank recorder an Increase in provisions for impairment of advances in light of the worsening economic conditions in Greece and Cyprus in the nine months of 2012. The overall provisions for the nine months amounted to € 1.285 million versus € 283 million in the corresponding period of 2011 recording an increase of 354%.
Provisions for the Cyprus portfolio amounted to € 306 million whereas for the Greek portfolio they reached € 967 million. According to the announcement the resulting coverage ratio of non-performing loans stood at a satisfactory level of 45% for the Group.
The Group’s net loan portfolio decreased by 13% on an annual basis and by 3% on a quarterly basis and amounted to € 22,4 billion as at 30 September 2012 due to deleveraging and increased provisions. The Cypriot net loan book stood at € 10,4 billion as at 30 September 2012, 2% lower on a yearly and quarterly basis. The Greek net loan book decreased by 23% on a yearly basis and 4% on a quarterly basis and stood at € 9,9 billion as at 30 September 2012.
On 30 September 2012, the Group’s loan portfolio consisted of 70% business loans and 30% loans to households. Mortgages accounted for 18% of total loan book and consumer loans for 12% on 30 September 2012. Deposits remained stable on a quarterly basis amounting to €18 billion on 30 September 2012. On a yearly basis deposits decreased by 17%, mainly due to the reduction in deposits both in the Cypriot and Greek market.
The Group’s NPL ratio stood at 27,4% increased by 510 basis points compared to 30 June 2012.
Non-performing loans in Cyprus increased by € 387 million in the third quarter of 2012, driving the NPL ratio to 17,2%, 360 basis points higher compared to the second quarter of 2012.
In Greece, due to the ongoing worsening economic conditions, the NPL ratio rose to 40,1% in the third quarter of 2012, 750 basis points higher versus the second quarter of 2012.
With regards to the Group’s International Operations, non-performing loans were reduced by € 8 million on a quarterly basis and stood at € 236 million in the third quarter of 2012. This slight decrease did not affect the NPL ratio, which remained stable on a quarterly and yearly basis at 10,3%.
Total operating revenues stood at € 638 million versus € 839 million in nine months of 2011, 24% lower on a yearly basis, while the core banking revenues reported a 19% decrease for the same period.
Net interest income decreased by 21% on a yearly basis to € 469 million in the nine months of 2012, reflecting the deleveraging of the loan and bond portfolio in all geographic areas where the Group has a presence, as well as the increased funding costs and the increased NPL formation. Net interest margin stood at 2,13% in the nine months of 2012, 3 basis points higher on a yearly basis. On a quarterly basis, net interest margin increased by 12 basis points, namely due to the savings on the interest paid on capital securities.
Net fee and commission income amounted to € 119 million for the nine months of 2012, versus € 136 million 12% lower against the nine months of 2011. Subdued activity in the capital markets and banking activity are the main reasons for the decline in income from fees and commissions.
Laiki Group notes that the successful implementation of the cost containment program of the Group continues to deliver significant benefits. Total operating expenses for the nine months of 2012 stood at € 449 million, versus € 472 million for the nine months of 2011, 5% lower on a yearly basis. Total operating expenses include non-recurring operating expenses stemming from the restructuring and the disengagement from agreements and various other legal obligations totaling € 21 million. Excluding the above, on a recurring basis, total operating expenses were lower by 9% on a yearly basis.
It is added that in line with the implementation of the Restructuring Plan and the Ministerial Decree, the Bank proceeded with the closure of branches mainly in Greece and Cyprus. The number of branches in Cyprus was reduced by 11 since 30 June 2012 (from 106 to 95) and the number of branches in Greece was reduced by 16 (from 157 to 141).
Similarly, staff numbers have been going down in the Group as a result of early retirements / resignations in combination with the recruitment freeze.