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P&K forecasts on banks

05/05/2008 10:29
In its report dated May 2, 2008, National P&K Securities (Π&Κ) gave its first preview for the performance of the Cypriot and Greek banks in the first quarter of 2008. P&K expects that volumes will show good growth, albeit with slightly lower margins. On the other hand, revenue from trading as well as commissions from capital markets will be significantly lower this quarter due to the market’s weak ytd performance.

According to the report, “Greek and Cypriot banks continue to enjoy a healthy environment, albeit not as favourable as was the case in 2007. Deposits have been growing but competition has sharply increased costs especially in time deposits”.

“The Cypriot banks we expect will report either moderate, in the case of Bank of Cyprus, or no growth, in the case of Marfin, in their NII as they are impacted by the euro adoption. In addition, Marfin is expected to report a decline in profits again on the lack of significant trading gains”, the report added.

P&K expects that Bank of Cyprus will achieve an increase of 5% in its net profits to €112 million. For the full year, BOCY expects to achieve profits of €540 million. As for its revenues in Q1, P&K anticipates that they will show an increase of 5% to €269 million, while its net income from interests will stand at €181 million (+5%). It expenses are expected to increase by 12% to €125 million. The cost to revenues ratio will amount to 46.5%.

Marfin Popular Bank will see its net profits dropping by 22% to €94 million. For the full year, MPB is expected to achieve profits of €617 million. Its revenues in the first quarter of the year will decline 13% to €286 million and the net income from interests will remain unchanged at €164 million. Its revenues will increase by 18% to €136 million. The cost to revenues ratio will reach 47.6%.

“Alpha Bank, EFG Eurobank and Piraeus Bank are expected to show good NII growth rates, however not fully translated to equivalent bottom line performance in terms of growth since last year’s Q1 market related revenues were quite strong”, the report added.

“ATE bank and Emporiki bank we believe will post another poor quarter. Finally, Hellenic Postbank will show good NII growth however the profitability will be adversely impacted by the lack of trading gains”, the report concluded.