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Marfin Popular Bank Pcl (MPB) reported a 38% year-on-year decline in first quarter profit to EUR 104.4 mln compared to EUR 168.96 mln reported in the first quarter of 2007 in line with expectations.
A poll conducted by the Financial Mirror among analysts had forecast MPB profits at EUR 103.80 mln.
Net Interest Margin (NIM) was down from 2.82% (adjusted for write-backs) in 1Q07 to 2.49% in 1Q08. The impact of the aforementioned cyclical and technical factors was 33 bps negative on 1Q08 NII margin. The reversal of the above cyclical factors trend should have a materially positive impact on MPB´s operating performance in the future.
Fee and commission income posted an 18% annual increase to EUR 74.1mln boosted by the leading investment and brokerage franchise, commercial banking and strong insurance business.
Total operating expenses stood at EUR 129 mln rising by 11% year-on-year. Cost growth was affected by the opening of 3 new branches and 4 business centres in Greece, 11 new branches in international locations, and the consolidation of the Ukrainian Marine Transport Bank (MTB) Bank in 4Q07 and Lombard Bank Malta from 01.03.2008.
The Group’s cost-to-income ratio remained fairly stable at 45.8% compared to 44.9% (adjusted for exceptional income) at the end of the first quarter 2007.
During the first quarter of 2008, all geographic regions of operation (Cyprus, Greece and International) achieved strong volume growth rates. Total assets of the Group reached EUR 32 bln recording an increase of 29% year-on-year. Group total loans recorded a robust increase of 44% year-on-year to EUR 19.7 bln, driven by solid demand across all geographic areas. International loans reached EUR 2.4 bln or 12% of the Group. Similarly, Group deposits registered a growth of 28% and reached EUR 21.9 bln driven by an expanding branch network, the gradual maturing of new branches, and expansion of the customer base.
Total Group Revenues increased by 9% year-on-year reaching EUR 281.6 mln. Revenues from international operations stood at EUR 30 mln representing 11% of total Group revenues. Net interest income (adjusted for write-backs) was supported by the robust increase in loans and deposits and reached EUR 172.3 mln growing by 17% on an annual basis, although negatively affected by the depreciation of the US dollar, the decline of US interest rates, the adjustment of the base rate in Cyprus and ongoing deposit competition from peers with constrained liquidity position in Greece and Cyprus.
Tier 1 capital fell 70bps to 8.4% end of March 2008 from 9.1% end of December 2007, while the total capital adequacy ratio fell 100bps to 10.1% end of March 2008 from 11.2% end of December 2007.
Non Performing loans fell 10bps to 4.7% end of March 2008 while return on total equity end of March 2008 fell 320bps to 20.4% from 23.6% and Return on Assets fell 91bps to 1.34% end of March 2008 from 2.25% end of December 2007.
