In the first quarter of year 2001, the profit before tax attributable to the shareholders of EFG Eurobank Ergasias Group reached Grd 40 billion or € 117 million, marginally ahead of the first quarter of 2000. Group net profit after tax and minorities reached Grd 30 billion or € 88 million, increased by 23% compared to the same quarter of the previous year under Greek GAAP, but by 37% under IAS. The net profit of the first quarter of year 2001 improved significantly compared to the profits of the previous three quarters. As can be derived from the results, the increase in revenues from business development and widening market shares have more than offset the contraction of commissions and fees from services related to the capital markets. The conclusion of the integration process during the current year will allow the Group to achieve cost and revenue synergies, which will be more visible in the second half of the current year and especially in 2002. Return on average Assets (ROA) before tax reached 2.7%, while Return on average Equity (ROE) pre tax reached 22%. These ratios are significantly improved compared to previous quarters and compatible with group medium term targets. The net interest margin remained at high levels of over 3%. Key Figures of 1st Quarter 2001
- Loan growth of 27% to Grd 2.9 trillion or € 8.4 billion
- Growth in Total Assets of 17% to Grd 6.3 trillion or € 18.6 billion
- Increase in Net Interest Income under Greek GAAP of 18% to Grd 54 billion or € 158 million. It should be noted that under IAS, growth in net interest income is higher at 36%, to Grd 49 billion or € 145 million, mainly due to differences in the accounting of leasing revenues and bond gains.
- Containment in the growth of operating costs, reflecting the effort to further enhance the Group ' s competitiveness. Personnel expenses and other administration costs grew at less than 8%. On the other hand operating cost is significantly burdened with the depreciation of investments in technology and the development of infrastructure, which aim at productivity gains in the long run.
- Contraction of net fee and commission income, which reached Grd 19.1 billion or € 56 million (Grd 21 billion under IAS), due to the weakness of the capital market in the first months of 2001, especially in comparison to the very good first quarter of year 2000, which had been characterised by significantly higher levels of both prices and trading activity.
- About 83% of total operating revenues were generated from organic sources, leaving room for significant improvement when capital markets recover.
- Total deposits on 31/3/01 reached Grd 5.1 trillion or € 15 billion
- Under Greek GAAP, Group shareholder funds reached Grd 634 billion or € 1.9 billion, while including minority interests they reached Grd 727 billion or € 2.1 billion. Under IAS, shareholders' equity was Grd 649 billion and Grd 741 billion respectively, mainly due to differences in the accounting of proposed dividend and IAS 39 adjustments.
- Capital adequacy ratio remains one of the highest in the market, exceeding 14.6%. This is indicative of our ability to maintain high growth rates, without having to resort to shareholders in order to raise new capital.
- In mortgage lending, the group' s market share exceeded 17% from 14.5% in March 2000
- In consumer lending, the group' s market share reached 26% from 23.5% in March 2000
- In mutual fund management the group' s market share exceeded 19%, from 15% in March 2000, capturing the leading position in the market
- In brokerage services the group' s market share reached 6%, from 4.4% in March 2000
- In IPO underwriting the Group played a key role in the effort to revive the market, demonstrating confidence in its prospects.
INTEGRATION PROGRESSMerger integration of former Eurobank and former Ergobank is taking place according to schedule. The organisational and managerial structure of former Ergobank network has been strengthened, and a network of 100 full-service branches, selling the entire product range of EFG Eurobank Ergasias, has been established.Great emphasis is placed on further business growth and exploitation of cross-selling potential, while the budget monitoring process is further enhanced.
ERGER WITH TELESIS INVESTMENT BANK
On Friday April 6 2001, the Boards of Directors of EFG Eurobank Ergasias and of Telesis Investment Bank approved the share exchange ratio for the all share merger of the two banks. The share exchange ratio approved by the respective Boards is one EFG Eurobank Ergasias share for every 2.2 shares of Telesis Investment Bank. The decision of the Boards on the exchange ratio will be tabled for approval at General Meetings of both banks that will take place within the next few months. The completion of the merger is also subject to the approval of all relevant supervisory authorities.