Greek Banks’ Losses Worsen as Customers Withdraw Deposits

Tuesday, 29 Nov 2011 02:30 PM

 

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National Bank of Greece SA, the country’s biggest lender, and two smaller competitors posted nine-month losses as they wrote down their holdings of government debt and clients pulled deposits.

National Bank had a net loss of 1.35 billion euros ($1.8 billion) compared with a 259 million-euro profit in the year-earlier period, the Athens-based lender said in a statement today. Agricultural Bank of Greece SA and Hellenic Postbank SA said their losses widened by about 10-fold.

The three banks, which own about 36.5 billion euros of Greek sovereign debt among them, wrote down their holdings by about 21 percent in July as part of the European Union’s bailout of the country. They may have to take further losses on their debt after the Greek government sought to impose bigger writedowns on investors. As the political crisis worsened in the third quarter, customers are pulling deposits.

“The current juncture is highly critical for the Greek economy,” National Bank Chief Executive Officer Apostolos Tamvakakis said in a statement. “Such conditions have only been simulated in worst-case scenarios.”

National Bank said deposits shrank 3 percent over the third quarter to 43.2 billion euros. Agricultural Bank’s deposits fell 13 percent over the first nine months to 17.2 billion euros at the end of September, while Postbank posted an 11 percent decline to 10.9 billion euros over the same period.

Deposit Outflows

The outflows for Greek banks continued after September, with Greek banks losing as much as 14 billion euros in the two months to the end of October, George Provopoulos, head of the Greek central bank, told lawmakers in Athens today. He said the decline continued in early November and has since stabilized.

State-controlled Agricultural Bank of Greece posted a 1 billion-euro loss in the nine-month period, compared with a 117.2 million-euro loss a year earlier. Hellenic Postbank’s loss widened to 543.7 million euros from 53.7 million euros.

Bank of Cyprus Plc the island’s biggest lender, reported an 801 million-euro net loss, compared with 248 million-euro profit in the year-earlier period. Marfin Popular Bank Pcl, Cyprus’s second-biggest bank, had a 282.2 million-euro loss, compared with an 82.7 million-euro profit last year.

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