Group Financial Results for the year ended 31 December 2010 and Profit estimate for 2011
The Group achieved its targets set at the beginning of 2010 by maintaining high levels of profitability and positive contribution to profit from all the markets in which it operates. In a particularly negative environment in the main European markets in which it operates, the Group, focusing on its targets, achieved a targeted business expansion, an increased recurring profitability and strengthened further its already robust balance sheet.
The Group’s total income recorded a significant increase of 13% reaching €1.450 mn for 2010, demonstrating the Group’s ability to achieve increasing recurring income even in adverse economic conditions. The Group’s profit before provisions for 2010 reached €725 mn and recorded an annual increase of 18%. Despite the significant increase in profit before provisions, the Group’s conservative policy regarding provisions resulted in profit after tax for 2010 declining by 2% and reaching €306 mn, with the Group being profitable in all the markets in which it operates.
At the same time, the Group enjoys strong capital adequacy (Tier 1 ratio 11,0%) and healthy liquidity (loans to deposits ratio 84%). The Group’s capital adequacy is expected to be further strengthened with the forthcoming issue of Convertible Enhanced Capital Securities of €1.342 mn, with the pro-forma Tier 1 ratio at 31 December 2010 reaching 12,7%, based on the assumption that all ‘Eligible Securities’ (as defined in the terms of the issue) (€818 mn) are exchanged for the new Convertible Enhanced Capital Securities.
Despite its deterioration, loan quality remains at adequate levels (non-performing loans ratio of 7,3%) given the challenging macro environment.
The 2010 performance and the solid balance sheet footings reaffirm the effectiveness of the Group’s chosen business model. Amid the negative economic environment, the Group continues its selective business expansion in the main markets in which it operates, strengthening its balance sheet and achieving increased recurring profitability. At the same time, the successful share capital increase of €345 mn in October 2010 offers the Group further strategic flexibility to capitalise on its liquidity by seizing profitable growth opportunities across its various markets.
The Board of Directors of the Bank, taking into consideration the Group’s financial results and the target of maintaining a strong capital position, has decided to propose at the Annual General Meeting of its shareholders a reduced final dividend of €0,03 per share in cash. The total of the proposed final dividend in cash, including the interim dividend of €0,06 per share paid in November 2010 (totalling €46,6 mn), amounts to €0,09 per share, totalling €73,5 mn.
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