net profit adjusted for one-off capital gain(1) and exceptional tax charge(2) stood at €20.6 million, 5x higher q/q; pre-provision profit(1) rose to €103.4 million, 58% higher q/q.
Net interest income (NII) rose to €181.5 million in 1Q 2011, 3% higher y/y and 5% higher q/q, due to an improving net interest margin (NIM), which increased by 9 basis points y/y and 14 basis points q/q to 1.92%; margin expansion has been primarily driven by further asset repricing and improving underlying deposit spreads in both Greece and Cyprus.
Total reported revenues increased by 15% y/y and 33% q/q to €314.1 million in 1Q 2011; total revenues, adjusted for one-off capital gain(1), rose 10% on a sequential basis to €260.7m, reflecting improved NII and higher financial & other income.
Core banking revenues have proved resilient over the last five quarters, growing 4% on a sequential basis to €227.9 million in 1Q 2011.
Group loans rose 1% y/y, but were 1% lower q/q to €26.6 billion; deposits at €24.0 billion, were 1% lower y/y and 4% lower q/q.
NPL ratio exhibited a well below the sector average increase, rising by only 50 basis points q/q to 8.0%; cost of credit at 117 basis points for the quarter and NPL formation at €118 million have been close to the last five quarter average; the overall stability reflects the offsetting positive impact from the Group’s non-Greek business, which accounts for 54% of total loan book.
Strong capital position with total capital adequacy ratio at 13.8%, 220 basis points higher on a sequential basis, following the successful completion of its €488.2 million share capital increase and the disposal of the Group’s Australian operations; Tier I ratio at 12.1%, 210 basis points higher q/q, remains one of the highest among the Eurozone banks.
On May 24, MPB successfully set up its new €5 billion Cyprus Residential Loans Covered Bond Program and also completed its inaugural €1 billion Residential Loans Covered Bond Issue under this program, following the approval by the Central Bank of Cyprus.
The merger of Marfin Popular Bank with Marfin Egnatia Bank was completed as scheduled on 31 March 2011, yielding further synergies and integration.
Commenting on first quarter 2011 financial results, Mr. Efthimios Bouloutas, Chief Executive Officer of Marfin Popular Bank Group, made the following statement:
“MPB delivered another set of resilient operating performance through a combination of stable operating trends across the Group’s Greek business and improving profitability across its non-Greek business. The Bank continues to benefit from a favorable asset mix, with 54% of its loans related to non-Greek business, while relying on a well diversified deposit base. Our Group’s operating performance for the quarter has been driven by margin expansion both in Greece and Cyprus contributing a 5% increase in net interest income on a quarterly basis. The combination of strong revenue generation and well contained operating expenses resulted in a 58% sequential increase in our quarterly pre-provision profit allowing our Group to further boost its provision and capital buffers. Both quarterly NPL formation and cost of credit remained broadly stable underpinned by the Group’s favorable geographical and product mix. Our well diversified loan portfolio combined with strong risk management enables the Group to exhibit one of the lowest increases of NPL ratio among its peers, while its well diversified deposit base allows it to maintain one of the strongest liquidity positions among its peer group.
Despite adverse business conditions, our Group remains committed in supporting its clients across all its key geographies with a view to facilitate economic growth in these countries. This strategy is supported by a strong capital position in excess of €3.8 billion corresponding to a total capital ratio of 13.8%, one of the highest among its peers.”
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