NBG posts 9-month loss on bad debt provisions

* Bad loan provisions up 32% y/y
* Results exclude hit from bond-swap
* No plan to sell control of Finansbank

National Bank, Greece's largest lender, posted a smaller-than-expected loss in the first nine months of 2011 on increased bad debt provisions and said it would need to boost its capital base further to cope with tough times ahead.
The group, present in Turkey, Bulgaria, Romania, Serbia and Cyprus, reported a loss of 7.0 mln euros, excluding impairments from its planned participation in a Greek government bond swap to reduce the country's debt.
Analysts polled by Reuters were expecting a loss of 66.2 mln euros on average in the nine-month period.
Greek banks are trying to cope with rising credit impairments and a shrinking deposit base as the austerity-hit country struggles through its fourth straight year of economic contraction, seen at 5.5% this year.
Banks are expected to have to recapitalise after writedowns resulting from a planned bond swap agreed in October, which calls for a 50% nominal writedown on Greek government bonds.
"With the prospect of a new debt swap initiative (PSI+) imminent, and the completion of the diagnostic tests being conducted on domestic lenders by Blackrock Solutions, we shall need to fortify yet further our capital base," NBG's Chief Executive Apostolos Tamvakakis said in a statement.
The so-called private sector involvement (PSI), the terms of which have yet to be finalised, will succeed a July 21 scheme that included a 21% net present value loss on the bonds.
NBG had said in the first half that the impact from its participation in the July voluntary swap of Greek government bonds would have been 1.645 bln euros.
National Bank said it does not plan to pull out of Turkey and sell a controlling stake in its cash cow Finansbank, which helps the group partly offset the business slump at home.
The bank is planning to dispose just 20% of Finansbank when market conditions allow as part of a capital strengthening.
"National Bank does not have a plan of selling control of Finansbank. We want the optionality in Turkey," NBG Deputy CEO Anthimos Thomopoulos told analysts in a conference call after the bank released third quarter results.
Nine-month net profit at Finansbank dropped 9% year-on-year to 293 mln euros, with NBG saying the recovery of the Turkish economy bolstered expectations for continued growth at the subsidiary.
"We continue to pursue the strategy announced last year (to sell a 20% stake). The market has not given us the opportunity, we are determined to do so as soon as we get an opening," Thomopoulos said.
Shares of NBG have shed 68% in the year to date, underperforming the broader Greek equities market which is down 52.8% in the same period.