Marfin Popular profit down 59%, but sees turnaround

Marfin Popular said first-half net profit fell 59% to EUR 90.3 mln during the first half of 2009 compared to EUR 220 mln profits a year ago in the same period, but said it saw a turnaround in profit in the second half of the year. In 1H09, the Group booked EUR 19 mln in profits from discontinued operations.
Net interest income for the six months fell 19.8% to EUR 286 mln. Pretax profit fell 58% to EUR 104.3 mln, the group said.
On a quarterly basis, net interest income was up 33.3% in the second quarter compared with the first, and net profit was up 26%.
The bank said a Q2 improvement in the net interest margin to 1.71% from 1.35% in the first quarter marked a return to more normal conditions of deposit cost and asset repricing.
"In second-quarter 2009, the 33% sequential increase of net interest income, which comprises 59% of total income, as well as the improvement of net interest margin marks the gradual transition to a higher pre-provision profit era," Chief Executive Officer Thimios Bouloutas said in a statement.
Operating expenses advanced by 4% qoq and 12% yoy to EUR 290 mln. Provisions were hiked to EUR 124 mln (+54% qoq and +162% yoy) well above consensus with cost of risk standing at 101bps vs. 47bps in 1H08 and 80bps in 1Q09. Total lending grew by 13.6% yoy at EUR 24.05 bln, whilst deposits expanded by 4.7% yoy at EUR 24.92bln. Tier 1 stood at strengthened to 9.3% (vs. 8.7% in 1Q09) and total capital at 11.6% (vs. 10.9% in 1Q09).
The bank said it would not provide any information on the group's future profitability, citing "exceptionally uncertain conditions" in the broader economic and operating environment.
Business plans for 2009 and 2010 which were announced in 2007 were no longer applicable, it said.
Marfin has operations in Cyprus, Greece, Australia, Serbia, Romania, Russia, Ukraine and Malta.