Marfin Popular Bank 2008 profit down 30%

Marfin Popular Bank (CPB) posted a 30% decline in its 2008 net profits to EUR394.6 mln from EUR 563.4 mln in FY07, with the decline blamed on reduced exceptional income from sales of shareholdings in 2007 and an increase in provisioning.
The Bank also delayed a decision on whether it will declare a dividend till March when the final results will be approved.
"Despite the difficult economic environment, which negatively affected the results, the Group has maintained its advantages, among which, its robust capital adequacy position, and the necessary liquidity in order to face the challenges for the future," the bank said in a news release.
Marfin said it had a limited exposure — of less than 5% of its total loan book — in emerging European markets, which have been badly affected by the credit crisis. The Group's primary markets are in Cyprus and Greece.
Net profit for the year was marginally lower compared with estimates because of a worsening market environment, particularly in December 2008, and the decision to increase provisions in the fourth quarter to provide a buffer for the Bank against future risks, Marfin said.
The bank said its key objective was to sustain a strong capital and liquidity position. "The 2008 results reflect the success of the Group's strategy to maintain only a limited exposure in Emerging Europe which is currently badly affected by the credit crisis," the bank quoted Chief Executive Officer Thimios Bouloutas as saying.
In 2007 net profit included a one-off income from the disposal of the Group’s stakes in Hellenic Bank and Universal Life. The 4Q08 results were boosted by a one-off gain of
EUR68mln from the sale of the bank’s insurance units to CNP. Net Interest Income (NII), increased by 12% y-o-y, reaching EUR744.4mln. Adjusting for the exceptional write backs for the year 2007, the increase in NII stands at 16%.
Net fee and commission income decreased by 7% y-o-y, to EUR286.7mln, as a result of the additional commission earned from the public offer of MIG during 2007. Operating expenses were up 11% to EUR591.2 mln.
On the loans side, the Bank showed an annual increase of 33%, with deposits showing a corresponding 20% increase. On an annual basis, loans to deposits ratio stood at 94%, versus 88% a year earlier. Focus was given on impairments, with NPLs ratio standing in 4.3% compared to 4.8% in the corresponding period of 2007 and provisions standing in at 61 bps on an annual basis with 99 bps appearing in the 4Q of 2008. Capital adequacy ratio stood at 10.6% with Tier I ratio reducing to 8.6% compared to 9.1% in 2007. During the conference call, Management provided a conservative outlook for the year 2009, primarily with regards to asset quality deterioration, also highlighting its concerns regarding increase in NPLs (especially in New Europe) by the end of 2009.