The announcement of first half results by Marfin Popular Bank (CPB.CY) and Hellenic Bank (HB.CY) on Thursday is expected to dominate the earnings reporting calendar with both banks expected to report lower profits compared to last year.
Marfin Popular is forecast by HSBC to report EUR 226 mln in net profit for the first half. If the extraordinary gain of EUR 45 mln booked on the sale of 51% of insurance subsidiaries is taken into consideration, then the overall profitability in the first half of 2008 will climb to EUR 266-271 mln, according to analyst expectations.
This would still amount to a decline of around 24% compared to the first half net profit of EUR 343.1 mln reported a year ago, which also included a EUR 60 mln extraordinary investment gains.
Without taking into account the proceeds from the sale of the insurance operations, both KBW and HSBC forecast the second quarter of Marfin Popular Bank to range from EUR 118 to 122 mln for a 14% gain compared to the first quarter.
Greek analysts polled by Reporter.gr said they expect the Group to have no difficulty in meeting its full year forecast of net profits in the range of EUR 500-600 mln as stated during the AGM by Group Vice Chairman Andreas Vgenopoulos.
Hellenic Bank
Hellenic Bank, also reporting its first half results on Thursday, is forecast by Marfin-Egnatia to reveal net profits at EUR 48.9 mln, a 30.3% year-on-year decline due to significantly lower non core income associated with euro adoption costs and worsening global economic conditions (higher cost of funding and losses from trading activities).
Despite intense competition in the local deposit market, the impact of the lower rates from euro adoption, the reduction in USD rates as well as the higher funding costs, Marfin Egnatia analysts anticipate net interest income (NII) to grow moderately by 8.7% YoY to EUR 108.1mln supported by higher volumes especially in Cyprus and a marginal positive contribution from loan higher spreads.
Operating expenses are expected to rise by 2.5% YoY to EUR 79.6 mln. Cost to income ratio is calculated at 53.9% (vs. 48.6% in 1H07). Despite the improvement in loan book quality, provisions are expected to more than double at EUR 12.1mln with the cost of risk increasing, according to the Marfin Egnatia analysis.
Bank of Cyprus, which reported its first half results on July 24 had reported a 6.2% increase in net profit to EUR 243.64 mln, compared to EUR 229.4 mln profit in the first half of 2007.
