LONDON, UK – Greece’s biggest bank NBG has reported a net loss of 537 million euros ($666 million) in the first quarter of 2012, as the country’s deep recession saw trading activities suffer and the bank forced to set aside higher provisions.
In a statement released Wednesday, National Bank of Greece logged “losses of €537 million, due to the marked negative impact of trading income in Greece and the 47% increase (on an annual basis) in the group’s provisions,” RTÉ News reports.
Wednesday’s figures for the three months to March contrast with NBG’s 157 million euro profit a year earlier, while the bank also said that its group core revenue – which includes net interest income gained from loans in addition to other regular operating income – dropped 6 percent from a year earlier to 1.09 billion euros, according to Dow Jones.
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Greece is in its fifth year of recession, which along with the country’s record high unemployment rate has forced its banks to set aside billions of euros to cover potential losses.
The banks are also having to sacrifice their own profit margins by rewarding depositors with higher interest rates to discourage them from withdrawing their money, which could potentially trigger a bank run, Reuters reports.
In March Greece’s banks participated in a debt restructuring as part of an international bailout agreement that aimed to prevent the economy from collapsing.
According to the Agence France Presse, the restructuring inflicted heavy losses on private lenders like NBG, which received a 7.4 billion euro aid injection from the EU’s European Financial Stability Fund (EFSF) on Monday, Bloomberg reports.
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