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  • 6-K (May 19, 2014)
NATIONAL BANK OF GREECE SA 6-K 2006

Documents found in this filing:

  1. 6-K
  2. Graphic
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  7. Graphic

 

FORM 6-K

 

SECURITIES AND EXCHANGE COMMISSION

 

Washington, D.C. 20549

 

Report of Foreign Private Issuer

 

Pursuant to rule 13a-16 or 15d-16 of

 

The Securities Exchange Act of 1934

 

For the month of February 2006

 

National Bank of Greece S.A.

(Translation of registrant’s name into English)

 

86 Eolou Street, 10232 Athens, Greece

(Address of principal executive offices)

 

[Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F)

 

Form 20-F  ý    Form 40-F  o

 

[Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to rule 12g3-2(b) under the Securities Exchange Act of 1934.

 

Yes  o    No  ý

 

[If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-            ]

 

 



 

 

 

Press release

 

2005 full-year results

 

100% growth in net profit

 

28.6% return on equity

 

\Our disciplined focus on achieving the targets set out in our business plan for 2005 resulted in the freeing-up of value to our shareholders, as the NBG Group posted record profitability.

 

Strong revenue growth, improved operating efficiency and enhanced return on equity are the main drivers of our three-year business plan.

 

We succeeded in all three of these areas, as Group income grew by 20%, the cost/income ratio declined by 11.5 percentage points, and return on equity climbed to 28.6%. With this performance we have covered the greater part of our three year business plan targets.

 

The market recognizes our efforts, shows confidence on us and supports our stock price. This has led to a significant rise in our market capitalization close to €15 billion, placing us much higher in the rankings of European banks and enabling us to continue to maintain our independent course.

 

I would like to stress the fact that our strong performance has been accompanied by substantial improvements in the Group’s Corporate Governance, with higher internal controls, strict compliance to all regulatory requirements, and best practice risk management procedures and methods. All these factors create a robust base on which to sustainably grow our business in the years ahead.

 

The proposed dividend of €1.00 per share amounts to an increase of 71% on last year in line with the 67% increase in pre-tax operating profit.

 

I am grateful to all the staff of the Group for their efforts, without which these outstanding results could not have been achieved. In recognition of their contribution we propose a €40 million distribution of profit to the Group’s employees, a 50% increase on the previous year. This corresponds to 5.5% of the Group’s net profit for the year.

 

I am certain that all of us will work just as hard in 2006 to meet our commitments to our shareholders.

 

Athens, February 2006

Takis Arapoglou

Chairman and CEO

 



 

Chairman and CEO

 

(€ millions)

 

31.12.05

 

31.12.04

 

±%

 

Earnings per share

 

2.08

 

0.83

 

+151

%

Net profit (after tax & minority interests)

 

727.4

 

364.4

(1) 

+100

%

Core profit

 

719.6

 

430.9

 

+67

%

Operating expenses (1)

 

1 350.8

 

1 366.3

 

-1.1

%

Pre-tax profits from SE  Europe

 

85.2

 

50.9

 

+68

%

Return on average equity

 

28.6

%

12.3

%

+1630

bps

Cost / income (1)

 

54.2

%

65.7

%

-1,150

bps

 


(1) adjusted. for the cost of the voluntary retirement programme

 

Group net profit after tax and minority interests grew to €727.4 million in 2005, up 100% vis-à-vis the 2004 results adjusted for the voluntary retirement programme. This performance is a landmark in the history of the Group, and has propelled the return on average equity for 2005 to a record 28.6%, sixteen percentage points higher than the previous year. This outstanding performance places the NBG Group at the forefront of Greek and European banks in terms of profitability.

 

These top-class results reflect dynamic growth across all sources of income as well as the Group’s ongoing restructuring efforts that have helped contain operating expenses.

 

(€ millions)

 

31.12.05

 

31.12.04

 

±%

 

Total core income

 

2 297

 

1 971

 

+16.5

%

Net interest income

 

1 596

 

1 334

 

+19.6

%

Net interest margin

 

3.16

%

2.76

%

+40

bps 

 

All the Group’s income sources posted robust growth, pushing up core revenues by 17%, well beyond the target level set in the Business Plan 2005-2007.

 

The key lever behind core income growth is interest income. Group net interest income in 2005 topped €1.6 billion, up 19.6% y-o-y. The upward trend in interest income was particularly marked in Q4:2005, when it grew by no less than €430 million, or 5.6% q-o-q.

 

This development was due exclusively to the continued improvement in the Group’s asset mix and the robust growth posted by the loan book, particularly in retail lending in Greece and SE Europe, as competition generates a trend for further decline in margins across all forms of retail lending. The improved asset mix has led to a steady increase in net interest margin, up 40 basis points, to 3.16%, the highest level of recent years.

 

Commission income ( millions)

 

31.12.05

 

31.12.04

 

±%

 

Retail loans

 

105.9

 

87.7

 

+20.8

%

Corporate loans

 

76.1

 

65.6

 

+16.0

%

Intermediation & deposits

 

137.3

 

142.3

 

-3.5

%

Investment banking

 

66.5

 

50.2

 

+32.5

%

Fund management

 

39.3

 

42.1

 

-6.8

%

Total commission income

 

425.1

 

387.9

 

+9.6

%

 

Net commission income grew by 9.6%, despite the adverse impact on intermediation commissions caused by the strike action in June.

 

Retail commissions in particular grew by 20.8%, reflecting the surge in retail lending. Likewise, investment banking commissions grew by 32.5%, reflecting strong capital market performance.

 

2



 

One of NBG’s key strategic goals is to strengthen its position in the mutual funds market, particularly high value-added funds. 2005 was a landmark year in this respect. NBG succeeded in totally rebalancing its funds under management, shifting the emphasis from money market funds to bond, balanced and equity funds. Over €3 billion was reinvested in high value-added mutual funds, thus enhancing the Group’s market share in these mutual fund categories by an impressive 10 percentage points, with the result that by the end of the year, the Group’s market share stood at 21.4%.

 

The positive impact of the restructuring of the Group’s mutual fund portfolio is evident in the Q4:2005 results, where respective commissions presented growth of 75% q-o-q.

 

The Group’s insurance business posted substantial growth of 13% in 2005 to over €100 million. This reflects restructuring in the Group’s insurance operations, principally at Ethniki Insurance, with more aggressive marketing of insurance products towards the large customer base of NBG through the latter’s extensive branch network. Effective exploitation of Group synergies and promotion of new products via the networks of both the Bank and Ethniki Insurance are expected to generate strong results in the years ahead.

 

Group loans (€ millions)

 

31.12.05

 

±y-o-y%

 

Retail

 

18 635

 

+26.0

%

Corporate

 

11 979

 

+8.3

%

Total

 

30 614

 

+18.4

%

% Retail / Loans

 

60.9

%

+366

bp

% net NPLs

 

1.08

%

-5

bp

 

18% growth in loans, spearheaded by mortgages

 

At 31 December 2005, total Group lending stood at €30.6 billion, up 18.4% y-o-y. Retail loans are providing the driving force behind this growth. To illustrate, at 31 December, retail loans outstanding amounted to €18.6 billion, up 26% y-o-y, as a result of which retail loans now represent over 61% of the total loan book.

 

Mortgages posted spectacular growth of 31%, leading mortgages outstanding at the end of 2005 to over €11.8 billion, or 38.6% of total Group lending. Mortgage disbursements topped a record €3.5 billion in 2005, up 34% y-o-y. In the second half of the year, the Bank implemented a far-reaching sales programme aimed at tapping the surge in demand for housing loans. Thus, in 2005, NBG’s market share of new mortgages rose sharply to 26%. The sustained strong demand for mortgage packages in the first month of 2006 suggests that growth will continue in the year ahead.

 

At 31 December 2005, consumer loans outstanding stood at €3.2 billion, up 23.7%. The revolving credit facility product was a key component in this performance, as it posted annual growth of 35% and contributed decisively to commissions generated by consumer credit, which grew by 80% y-o-y. Moreover, credit cards outstanding grew by 6.3% to €1.5 billion.

 

This growth in credit card and consumer lending is especially encouraging in view of the credit discipline that the Group has been applying as a strategic policy in this loan segment. The level of discipline is reflected by the high level of rejections, ranging from 39% to 47%, depending on the type of loan.

 

Loans to small businesses with turnover below €2.5 million also posted satisfactory growth of around 20%, with loans outstanding totalling €2 billion at 31 December 2005. The Bank is also making strong progress in its efforts to broaden lending to medium-sized businesses

 

3



 

(with annual turnover of €2.5 to €50 million), as loans in this segment grew to over €3.2 billion, up 13%.

 

Non-performing loans declined to 4.7% of the aggregate loan book, compared with 5.3% at the end of 2004. After provisions for bad and doubtful debt, net non-performing loans today account for just 1.1% of the total loan book. The healthy growth in lending in recent years has been made possible by the application of state-of-the-art controls and credit risk management throughout the Group.

 

Sustained containment of operating costs

 

Operating expenses (€ millions)

 

31.12.05

 

31.12.04

 

±%

 

Staff costs(1)

 

861.9

 

860.7

 

+0.1

%

Administrative expenses

 

374.3

 

380.4

 

-1.6

%

Total operating expenses(1)

 

1 350.8

 

1 366.3

 

-1.1

%

Cost / income(1)

 

54.2

%

65.7

%

1150

bp

 


(1) Adjusted for the cost of the voluntary retirement programm

 

Even while business across all its activities has posted robust growth, the Group’s restructuring programme and the resulting decline in operating costs are a key feature of its performance in 2005, marking it out from the rest of the Greek banking sector.

 

Operating expenses in 2005 declined by 1.1%. This reflects the continued reduction in administrative expenses by 1.6% and the containment of staff costs due to the voluntary retirement programme pursued in 2004, the impact of which was gradually offset by wage increases during the year. This substantial reduction in operating costs has been achieved during a period of intensive organic growth for the Group in Southeast Europe, where related expenses grew by around 13% in 2005.

 

The significant growth in income coupled with the containment of operating expenses led to a further improvement in the efficiency ratio, which stood at 54.2%, down 11.5 percentage points relative to 2004.

 

Rapid growth in SE Europe, with expanding market share and outstanding profitability

 

SE Europe (€ millions)

 

31.12.05

 

31.12.04

 

±%

 

Loans

 

2 058.5

 

1 302.3

 

+58.1

%

Total income

 

233.0

 

185.6

 

+25.6

%

Profit before tax

 

85.2

 

50.9

 

+67.6

%

 

The NBG Group holds a commanding position in the banking market of Southeast Europe. Its total number of branches in the region rose by 47 in 2005 to 257. The total number of employees now stands at 4,425 while the number of customers is now over 2.5 million. National Bank believes in the growth prospects of the region and is therefore planning further expansion there. Indeed, the Bank intends to open a further 105 new branches during 2006.

 

Lending in Southeast Europe continued to grow at an impressive rate to over €2 billion at the end of the year, up 58%, with retail lending posting spectacular 90% growth.

 

The steady growth in lending, particularly retail, in Southeast Europe led to marked growth in interest income (up 40.7%) and commissions (up 22.9%) in 2005. Profit before tax in SE Europe soared to €85.2 million, accounting for 9% of total Group profitability.

 

A key role in the SE Europe story was played by the surge in business in Bulgaria and Romania via the local subsidiaries United Bulgarian Bank (UBB) and Banca Romaneasca (BR). UBB posted profit growth of 40%, expanding its loan book by 37% to over €1 billion,

 

4



 

comfortably outstripping average banking sector results in Bulgaria. Leveraging the strong position of UBB, National Bank recently announced the launch of life and general insurance companies in Bulgaria, in collaboration with Ethniki Insurance and the American International Group (AIG). BR posted a strong improvement in earnings, more than doubling its loan book and also improving its market share in retail and business lending.

 

Growing deposit base sustains liquidity at high levels

 

Deposits (€ billions)

 

31.12.05

 

31.12.04

 

±%

 

Savings & sight

 

32.0

 

29.3

 

+9.1

%

Total deposits

 

43.4

 

39.3

 

+10.3

%

Liquidity ratio

 

70.6

%

65.8

%

 

 

 

Savings and sight deposits grew by 9.1% in 2005 to over €32 billion. This development is particularly encouraging in view of the significance of these types of deposit within an environment of rising interest rates. National Bank’s large market share of these deposits gives it a strong competitive advantage since this enables it to inject finance into its growth trajectory and invest in the Group in Greece and the wider region.

 

Time deposits posted very substantial growth of over 40% in 2005, chiefly due to the reduction in desirability of other similar placements such as repos and money market mutual funds. Overall, Group deposits grew by 10% to over €43 billion.

 

Despite the substantial increase in lending, the rapid growth in deposits during 2005 meant that the liquidity (i.e. loans-to-deposits) ratio remained low, at 70%.

 

Strengthening the capital base

 

Capital adequacy ratios

 

31.12.05

 

1.1.05

 

Core Tier-I CAD ratio

 

8.9

%

8.0

%

Total Tier-I CAD ratio

 

12.3

%

11.0

%

Total CAD ratio

 

15.2

%

13.5

%

 

The Group’s capital base strengthened yet further in 2005. The total capital adequacy ratio topped 15.2% at the end of the year, while the Group’s core Tier-I capital adequacy ratio stood at 12.3%. The capital base should be further strengthened with the finalisation of the sale of Atlantic Bank of New York and National Bank of Greece (Canada) in early 2006.

 

The strengthening of the Group’s capital base from internal capital generation and the restructuring of its geographical presence gives the Group a competitive edge for growth in both Greece and Southeast Europe.

 

71% dividend growth

 

Given these positive results, NBG’s management will propose to the AGM a dividend of €1 per share, compared with a dividend (adjusted) of €0.58 per share for 2004. Based on the closing price of the share in 2005, this dividend represents a yield of around 2.8%.

 

Distribution of profit to staff up by 50%, i.e. 12% of net pay

 

In recognition of the key role played by the staff of NBG in achieving these results and wishing to reward performance, NBG’s management will propose to the AGM a distribution of profit to Bank staff amounting to €32 million. This represents an increase of 50% compared with the €21.5 million finally distributed in 2004, and corresponds to 12.3% of total annual net pay to Bank staff (compared with 8.1% in 2004).

 

5



 

Subject to this proposal’s approval by the AGM, management will recommend that 70% of this amount be distributed on a priority basis to the staff of the NBG network and product units. The remaining 30% will be distributed to the Group’s administrative and back-office units. The amount distributed to each employee will not be less than half net monthly pay.

 

A further amount of €8 million will be distributed by the Group’s subsidiary companies in Greece and abroad to their staff, thereby raising total distribution of profits to Group staff to €40 million, or 5.5% of Group net profit.

 

Last, the Bank’s management will activate the Stock Options Programme for the staff of the Bank and its subsidiaries in line with the AGM’s approval of the previous year. The Programme allows management to distribute up to two million shares to Group officers and staff on a strictly meritocratic basis. The Programme aims at establishing a long-term link between officers’ pay and the Group’s performance and delivery of value to our shareholders. For this reason the exercise of the stock option rights will for the most part be set for future financial years, i.e. 2007 onwards

 

6



 

Group income statement

 

millions

 

31.12.05

 

31.12.04

 

±%

 

4Q.05

 

3Q.05

 

±%

 

Net interest income

 

1 595.8

 

1 333.8

 

19.6

%

430.4

 

407.6

 

5.6

%

Net commission income

 

425.1

 

387.9

 

9.6

%

119.6

 

106.3

 

12.5

%

Net premiums from insurance contracts

 

100.4

 

89.1

 

12.7

%

26.2

 

28.7

 

-8.9

%

Income from dividends

 

13.8

 

17.2

 

-19.8

%

4.0

 

1.5

 

158.0

%

Income from private equity

 

64.3

 

12.4

 

418.8

%

40.0

 

8.8

 

353.4

%

Other income

 

97.4

 

130.7

 

-25.5

%

23.8

 

36.7

 

-35.1

%

Operating income

 

2 296.6

 

1 971.0

 

16.5

%

643.9

 

589.8

 

9.2

%

Earnings from financial transactions

 

195.2

 

107.6

 

81.4

%

54.7

 

79.8

 

-31.5

%

Total income

 

2 491.8

 

2 078.7

 

19.9

%

698.6

 

669.5

 

4.3

%

Staff costs

 

(861.9

)

(860.7

)

0.1

%

(250.4

)

(211.3

)

18.5

%

Administrative expenses

 

(374.3

)

(380.4

)

-1.6

%

(115.1

)

(90.3

)

27.4

%

Depreciation

 

(114.6

)

(125.2

)

-8.5

%

(29.1

)

(28.2

)

3.4

%

Total operating expenses

 

(1 350.8

)

(1 366.3

)

-1.1

%

(394.6

)

(329.8

)

19.6

%

Impairment losses on loans & advances

 

(226.3

)

(173.8

)

30.2

%

(64.6

)

(61.9

)

4.4

%

Operating profit

 

719.6

 

430.9

 

67.0

%

184.6

 

198.0

 

-6.8

%

Share of profit of associates

 

43.7

 

25.2

 

73.7

%

22.5

 

9.8

 

129.5

%

Cost of voluntary retirement programme

 

(15.4

)

(135.3

)

 

 

(15.4

)

 

 

 

 

Profit before tax & minority interests

 

943.1

 

428.4

 

120.1

%

246.5

 

287.7

 

-14.3

%

Tax

 

(221.2

)

(165.4

)

33.7

%

(65.5

)

(78.7

)

-16.8

%

Net profit of subsidiaries for sale

 

29.0

 

29.4

 

-1.1

%

5.7

 

8.1

 

-29.5

%

Minority interests

 

(23.6

)

(12.8

)

84.7

%

8.7

 

(15.2

)

-157.6

%

Net profit

 

727.3

 

279.6

 

160.2

%

195.4

 

201.9

 

-3.2

%

 

Consolidated Balance Sheet

€ millions

 

 

 

31.12.05

 

31.12.04

 

±%

 

ASSETS

 

 

 

 

 

 

 

Cash and balances with central banks

 

2 431.3

 

1 145.0

 

112.3

%

Due from banks (net)

 

4 085.2

 

8 587.4

 

-52.4

%

Loans and advances to customers (net)

 

29 528.2

 

26 052.8

 

13.3

%

Financial assets

 

16 987.2

 

14 148.9

 

20.1

%

Property, equipment and intangible assets

 

2 078.1

 

2 156.1

 

-3.6

%

Other assets

 

2 584.4

 

2 397.2

 

7.8

%

Assets classified as held for sale

 

2 732.2

 

 

 

Total Assets

 

60 426.6

 

54 487.4

 

10.9

%

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

Due to customers

 

43 350.1

 

40 865.2

 

6.1

%

Due to banks

 

5 363.5

 

6 413.7

 

-16.4

%

Other borrowed funds

 

957.0

 

748.6

 

27.8

%

Other liabilities

 

4 180.3

 

2 969.6

 

40.8

%

Liabilities classified as held for sale

 

2 259.2

 

 

 

Total liabilities

 

56 110.2

 

50 997.2

 

10.0

%

Minority interest and Hybrid

 

1 192.6

 

1 134.4

 

5.1

%

Shareholdrers’ Equity

 

3 123.8

 

2 355.7

 

32.6

%

Total Equity and Liabilities

 

60 426.6

 

54 487.4

 

10.9

%

 

7



 

Group loans

 

€ millions

 

31.12.05

 

31.12.04 *

 

±%

 

Mortgages

 

11 820

 

9 028

 

30.9

%

Consumer

 

3 238

 

2 619

 

23.7

%

Credit cards

 

1 536

 

1 445

 

6.3

%

Small businesses

 

2 041

 

1 695

 

20.4

%

Retail

 

18 635

 

14 787

 

26.0

%

Corporate

 

11 979

 

11 059

 

8.3

%

Total loans & advances to customers

 

30 614

 

25 846

 

18.4

%

Less: Allowance for impairment on loans & advances to customers

 

1 086

 

1 060

 

2.4

%

Loans & advances to customers (net)

 

29 528

 

24 786

 

19.1

%

 


* excluding discontinued operations

 

Group deposits

 

(€ millions)

 

31.12.05

 

31.12.04 *

 

±%

 

Savings

 

25 916

 

24 565

 

5.5

%

Sight

 

6 108

 

4 780

 

27.8

%

Core deposits

 

32 024

 

29 345

 

9.1

%

Time

 

10 704

 

7 539

 

42.0

%

Total deposits

 

42 729

 

36 884

 

15.9

%

Repos

 

247

 

2 162

 

-88.6

%

Other due to customers

 

374

 

253

 

47.8

%

Total due to customers

 

43 350

 

39 298

 

10.3

%

 


* excluding discontinued operations

 

8



 

 

 

NATIONAL BANK OF GREECE S.A.

 

 

Consolidated Financial Statements

 

31 December 2005

 

In accordance with

International Financial Reporting Standards

 

 

February 2006

 



 

Table of Contents

 

Note

 

 

 

 

 

 

 

Auditor’s Report

 

 

 

 

 

Consolidated income statement

 

 

 

 

 

Consolidated balance sheet

 

 

 

 

 

Consolidated statement of changes in equity

 

 

 

 

 

Consolidated cash flow statement

 

 

 

 

 

Notes to the consolidated financial statements:

 

 

1

 

 

General information

 

 

2

 

 

Summary of significant accounting policies:

 

 

 

 

 

2.1 Basis of presentation

 

 

 

 

 

2.2 Adoption of International Financial Reporting Standards (IFRS)

 

 

 

 

 

2.3 Group Accounts

 

 

 

 

 

2.4 Foreign Currency translation

 

 

 

 

 

2.5 Regular way purchases and sales

 

 

 

 

 

2.6 Derivative financial instruments

 

 

 

 

 

2.7 Offsetting

 

 

 

 

 

2.8 Interest income and expense

 

 

 

 

 

2.9 Fee and commission income

 

 

 

 

 

2.10 Financial assets at fair value though P&L

 

 

 

 

 

2.11 Sale & repurchase agreements

 

 

 

 

 

2.12 Securities borrowing and lending

 

 

 

 

 

2.13 Investment securities

 

 

 

 

 

2.14 Loans & receivables

 

 

 

 

 

2.15 Impairment losses on loans & advances

 

 

 

 

 

2.16 Property & equipment

 

 

 

 

 

2.17 Investment property

 

 

 

 

 

2.18 Goodwill & other intangible assets

 

 

 

 

 

2.19 Insurance operations

 

 

 

 

 

2.20 Leases

 

 

 

 

 

2.21 Cash & cash equivalents

 

 

 

 

 

2.22 Provisions

 

 

 

 

 

2.23 Employee benefits

 

 

 

 

 

2.24 Income taxes

 

 

 

 

 

2.25 Borrowings

 

 

 

 

 

2.26 Share capital & treasury shares

 

 

 

 

 

2.27 Segment reporting

 

 

 

 

 

2.28 Assets and liabilities held for sale and discontinued operations

 

 

 

 

 

2.29 Related party transactions

 

 

 

 

 

2.30 Fiduciary and trust activities

 

 

 

 

 

2.31 Earnings per share

 

 

3

 

 

Critical accounting policies, estimates & judgments

 

 

4

 

 

Financial risk management

 

 

 

 

 

4.1 Credit risk

 

 

 

 

 

4.2 Market risk

 

 

 

 

 

4.3 Interest rate risk

 

 

 

 

 

4.4 Liquidity risk

 

 

 

 

 

4.5 Foreign exchange risk

 

 

 

 

 

4.6 Fair values of financial assets & liabilities

 

 

 

 

 

4.7 Capital adequacy & Credit ratings

 

 

5

 

 

Segment reporting

 

 

6

 

 

Net interest income

 

 

7

 

 

Net fee & commission income

 

 

8

 

 

Net premia from insurance contracts

 

 

9

 

 

Dividend income

 

 

10

 

 

Net trading income

 

 

11

 

 

Other operating income

 

 

12

 

 

Personnel expenses

 

 

13

 

 

Retirement benefit obligations

 

 

14

 

 

General & administrative expenses

 

 

15

 

 

Depreciation, amortisation and impairment charges

 

 

16

 

 

Other operating expenses

 

 

17

 

 

Impairment losses on loans and advances

 

 

18

 

 

Tax expense

 

 

19

 

 

Earnings per share

 

 

20

 

 

Cash & balances with central banks

 

 

21

 

 

Treasury bills & other eligible bills

 

 

22

 

 

Due from banks (net)

 

 

23

 

 

Financial assets at fair value through P&L

 

 

24

 

 

Derivative financial instruments

 

 

25

 

 

Loans & advances to customers (net)

 

 

26

 

 

Investment securities

 

 

27

 

 

Investment property

 

 

28

 

 

Investments in associates

 

 

29

 

 

Goodwill & other intangible assets

 

 

30

 

 

Property & equipment

 

 

31

 

 

Deferred tax assets & liabilities

 

 

32

 

 

Insurance related assets & receivables

 

 

33

 

 

Other assets

 

 

34

 

 

Assets and liabilities held for sale and discontinued operations

 

 

35

 

 

Due to banks

 

 

36

 

 

Due to customers

 

 

37

 

 

Debt securities in issue

 

 

38

 

 

Other borrowed funds

 

 

39

 

 

Insurance related reserves & liabilities

 

 

40

 

 

Other liabilities

 

 

41

 

 

Contingent liabilities & commitments

 

 

42

 

 

Share capital, share premium & treasury shares

 

 

43

 

 

Reserves & retained earnings

 

 

44

 

 

Minority interest

 

 

45

 

 

Undated Tier I perpetual securities

 

 

46

 

 

Dividends per share

 

 

47

 

 

Cash & cash equivalents

 

 

48

 

 

Related party transactions

 

 

49

 

 

Acquisitions, disposals & other capital transactions

 

 

50

 

 

Group consolidated companies

 

 

51

 

 

Post balance sheet events

 

 

52

 

 

Effects from transition to IFRS

 

 

53

 

 

Reclassifications

 

 

 



 

Auditor’s Report

 

To the Shareholders of the NATIONAL BANK OF GREECE S.A.

 

We have audited the accompanying consolidated balance sheet of “National Bank of Greece S.A.” (the “Bank’) and its subsidiaries (the “Group”) as of 31 December 2005 and the related consolidated statements of income, changes in shareholders equity and cash flows for the year then ended. These financial statements are the responsibility of the Bank’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

 

We conducted our audit in accordance with the Greek Auditing Standards, which are based on the International Standards on Auditing. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, evaluating the overall consolidated financial statement presentation as well as assessing the consistency of the Board of Director’s report with the aforementioned financial statements. We believe that our audit provides a reasonable basis for our opinion.

 

In our opinion, the aforementioned financial statements give a true and fair view of the financial position of the Group, as of 31 December 2005, and of the results of its operations, its changes in shareholders equity and the cash flows for the year then ended in accordance with the International Financial Reporting Standards that have been adopted by the European Union and the Board of Director’s Report is consistent with the aforementioned financial statements.

 

Without qualifying our opinion, we draw attention to Note 51-1 of the consolidated financial statements which describes the basis of accounting for the merger of the Bank with National Real Estate Company.

 

 

Athens, 28 February 2006

Certified Public Accountant – Auditor

 

 

Nicolaos C. Sofianos

RN SOEL 12231

 

Hadjipavlou Sofianos &

Cambanis S.A.

Assurance & Advisory Services

RN SOEL E120

250 - 254 Kifissias Ave.

GR - 152 31 Halandri

Athens

 

3



 

Consolidated Income Statement

 

 

 

 

 

Year ended

 

€ 000’s

 

Note

 

31.12.2005

 

31.12.2004

 

Continuing Operations

 

 

 

 

 

 

 

Interest and similar income

 

 

 

2.426.266

 

2.089.533

 

Interest expense and similar charges

 

 

 

(830.506

)

(755.737

)

Net interest income

 

6

 

1.595.760

 

1.333.796

 

 

 

 

 

 

 

 

 

Fee and commission income

 

 

 

455.810

 

414.380

 

Fee and commission expense

 

 

 

(30.759

)

(26.525

)

Net fee and commission income

 

7

 

425.051

 

387.855

 

 

 

 

 

 

 

 

 

Earned premia net of reinsurance

 

 

 

551.990

 

560.939

 

Net claims incurred

 

 

 

(451.609

)

(471.847

)

Net premia from insurance contracts

 

8

 

100.381

 

89.092

 

 

 

 

 

 

 

 

 

Dividend income

 

9

 

13.760

 

17.150

 

Net trading income

 

10

 

67.522

 

106.750

 

Net result from investment securities

 

26

 

127.679

 

880

 

Other operating income

 

11

 

161.693

 

143.129

 

Total operating income

 

 

 

2.491.846

 

2.078.652

 

 

 

 

 

 

 

 

 

Personnel expenses

 

12&13

 

(877.307

)

(995.972

)

General & administrative expenses

 

14

 

(334.532

)

(329.965

)

Depreciation, amortisation and impairment charges

 

15

 

(114.551

)

(125.161

)

Other operating expenses

 

16

 

(39.808

)

(50.468

)

Total operating expenses

 

 

 

(1.366.198

)

(1.501.566

)

 

 

 

 

 

 

 

 

Impairment losses on loans and advances

 

17

 

(226.259

)

(173.843

)

Share of profit of associates

 

28

 

43.700

 

25.154

 

Profit before tax

 

 

 

943.089

 

428.397

 

 

 

 

 

 

 

 

 

Tax expense

 

18

 

(221.157

)

(165.400

)

Profit for the period from continuing operations

 

 

 

721.932

 

262.997

 

 

 

 

 

 

 

 

 

Discontinued operations

 

 

 

 

 

 

 

Profit for the period from discontinued operations

 

34

 

29.020

 

29.351

 

Profit for the period

 

 

 

750.952

 

292.348

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

 

 

Minority interests

 

44

 

23.590

 

12.771

 

NBG equity shareholders

 

 

 

727.362

 

279.577

 

 

 

 

 

 

 

 

 

Earnings per share- Basic & Diluted from continuing & discontinued operations

 

19

 

2,08

 

 0,83

 

Earnings per share- Basic & Diluted from continuing operations

 

19

 

1,99

 

 0,74

 

 

Athens, 28 February 2006

 

THE CHAIRMAN

 

THE DEPUTY CHIEF

 

THE CHIEF FINANCIAL

 

THE CHIEF

AND CHIEF EXECUTIVE OFFICER

 

EXECUTIVE OFFICER

 

AND CHIEF OPERATIONS OFFICER

 

ACCOUNTANT

 

 

 

 

 

 

 

EFSTRATIOS-GEORGIOS
A. ARAPOGLOU

 

IOANNIS G. PECHLIVANIDIS

 

ANTHIMOS C. THOMOPOULOS

 

IOANNIS P. KYRIAKOPOULOS

 

The notes on pages 8 to 77 form an integral part of these consolidated financial statements

 

4



 

Consolidated Balance Sheet

 

000’s

 

Note

 

31.12.2005

 

31.12.2004

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

Cash and balances with central banks

 

20

 

2.431.287

 

1.145.042

 

Treasury bills and other eligible bills

 

21

 

177.023

 

150.400

 

Due from banks (net)

 

22

 

4.085.204

 

8.587.378

 

Financial assets at fair value through P&L

 

23

 

13.667.471

 

11.615.536

 

Derivative financial instruments

 

24

 

309.030

 

 

Loans and advances to customers (net)

 

25

 

29.528.178

 

26.052.758

 

Investment securities

 

26

 

2.833.661

 

2.382.941

 

Investment property

 

27

 

126.506

 

123.742

 

Investments in associates

 

28

 

249.152

 

219.671

 

Goodwill & other intangible assets

 

29

 

65.911

 

72.763

 

Property & equipment

 

30

 

1.885.713

 

1.959.636

 

Deferred tax assets

 

31

 

217.417

 

75.022

 

Insurance related assets and receivables

 

32

 

637.916

 

492.904

 

Other assets

 

33

 

1.479.888

 

1.609.584

 

Assets classified as held for sale

 

34

 

2.732.203

 

 

Total assets 

 

 

 

60.426.560

 

54.487.377

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

Due to banks

 

35

 

5.060.850

 

6.413.741

 

Derivative financial instruments

 

24

 

302.698

 

 

Due to customers

 

36

 

43.350.120

 

40.865.176

 

Debt securities in issue

 

37

 

175.297

 

63.448

 

Other borrowed funds

 

38

 

956.988

 

748.642

 

Insurance related reserves and liabilities

 

39

 

1.734.249

 

1.326.697

 

Deferred tax liabilities

 

31

 

102.359

 

10.917

 

Retirement benefit obligations

 

13

 

207.725

 

225.331

 

Other liabilities

 

40

 

1.960.701

 

1.343.252

 

Liabilities classified as held for sale

 

34

 

2.259.165

 

 

Total liabilities 

 

 

 

56.110.152

 

50.997.204

 

 

 

 

 

 

 

 

 

SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

Share capital

 

42

 

1.696.347

 

1.492.090

 

Share premium account

 

42

 

 

32.393

 

Less: treasury shares

 

42

 

(22.680

)

(210.128

)

Reserves and retained earnings

 

43

 

1.450.163

 

1.041.348

 

Equity attributable to NBG shareholders

 

 

 

3.123.830

 

2.355.703

 

 

 

 

 

 

 

 

 

Minority Interest

 

44

 

109.997

 

302.321

 

Undated tier I perpetual securities

 

45

 

1.082.581

 

832.149

 

Total shareholders’ equity

 

 

 

4.316.408

 

3.490.173

 

 

 

 

 

 

 

 

 

Total equity and liabilities

 

 

 

60.426.560

 

54.487.377

 

 

Athens, 28 February 2006

 

THE CHAIRMAN

 

THE DEPUTY CHIEF

 

THE CHIEF FINANCIAL

 

THE CHIEF

AND CHIEF EXECUTIVE OFFICER

 

EXECUTIVE OFFICER

 

AND CHIEF OPERATIONS OFFICER

 

ACCOUNTANT

 

 

 

 

 

 

 

EFSTRATIOS-GEORGIOS
A. ARAPOGLOU

 

IOANNIS G. PECHLIVANIDIS

 

ANTHIMOS C. THOMOPOULOS

 

IOANNIS P. KYRIAKOPOULOS

 

The notes on pages 8 to 77 form an integral part of these consolidated financial statements

 

5



 

Consolidated Statement of Changes in Equity

 

 

 

Attributable to equity holders of the parent company

 

Minority
Interest &
undated

 

 

 

€ 000’s

 

Share
capital

 

Share
premium

 

Treasury
shares

 

Reserves &
Retained
earnings

 

Total

 

tier I
perpetual
securities

 

Total

 

Balance at 1 January 2004

 

1.147.761

 

32.393

 

(348.790

)

1.324.023

 

2.155.387

 

692.579

 

2.847.966

 

Currency translation differences

 

 

 

 

(6.699

)

(6.699

)

 

(6.699

)

Profit/(loss) recognised directly in equity

 

 

 

 

(6.699

)

(6.699

)

 

(6.699

)

Net Profit/(loss) for the period

 

 

 

 

279.577

 

279.577

 

12.771

 

292.348

 

Total

 

 

 

 

 

 

 

272.878

 

272.878

 

12.771

 

285.649

 

Issue of share capital

 

344.329

 

 

 

(344.329

)

 

 

 

Dividends to ordinary shareholders

 

 

 

 

(160.522

)

(160.522

)

(10.173

)

(170.695

)

Issue of preferred securities

 

 

 

 

(292

)

(292

)

482.149

 

481.857

 

Dividends to preferred securities

 

 

 

 

(13.620

)

(13.620

)

 

(13.620

)

Acquisitions, disposals & share capital increases of subsidiaries/associates

 

 

 

 

(873

)

(873

)

(31.012

)

(31.885

)

Purchases/ disposals of treasury shares & preferred securities

 

 

 

138.662

 

(35.917

)

102.745

 

(11.844

)

90.901

 

Balance at 31 December 2004

 

1.492.090

 

32.393

 

(210.128

)

1.041.348

 

2.355.703

 

1.134.470

 

3.490.173

 

Adoption of IAS 39 & IFRS 4

 

 

 

 

(110.761

)

(110.761

)

(31.739

)

(142.500

)

At 1 January 2005 restated

 

1.492.090

 

32.393

 

(210.128

)

930.587

 

2.244.942

 

1.102.731

 

3.347.673

 

Movement in the available for sale securities reserve, net of tax

 

 

 

 

(81.930

)

(81.930

)

(3.435

)

(85.365

)

Currency translation differences

 

 

 

 

(1.323

)

(1.323

)

20.576

 

19.253

 

Profit/(loss) recognised directly in equity

 

 

 

 

(83.253

)

(83.253

)

17.141

 

(66.112

)

Net Profit/(loss) for the period

 

 

 

 

727.362

 

727.362

 

23.590

 

750.952

 

Total

 

 

 

 

644.109

 

644.109

 

40.731

 

684.840

 

Merger through absorption of subsidiaries

 

204.257

 

(32.393

)

 

37.428

 

209.292

 

(209.292

)

 

Issue of preferred securities

 

 

 

 

(3.423

)

(3.423

)

230.000

 

226.577

 

Dividends to preferred securities

 

 

 

 

(45.999

)

(45.999

)

 

(45.999

)

Share capital issue costs

 

 

 

 

(1.065

)

(1.065

)

(312

)

(1.377

)

Dividends to ordinary shareholders

 

 

 

 

(193.230

)

(193.230

)

 

(193.230

)

Acquisitions, disposals & share capital increases of subsidiaries/associates

 

 

 

 

(6.650

)

(6.650

)

28.695

 

22.045

 

Purchases/ disposals of treasury shares & preferred securities

 

 

 

187.448

 

88.406

 

275.854

 

25

 

275.879

 

Balance at 31 December 2005

 

1.696.347

 

 

(22.680

)

1.450.163

 

3.123.830

 

1.192.578

 

4.316.408

 

 

Detailed analysis of the changes in equity is presented in notes 42 to 45 of these financial statements

 

 

The notes on pages 8 to 77 form an integral part of these consolidated financial statements

 

6



 

Consolidated Cash Flow Statement

 

 

 

 

 

Year ended

 

€ 000’s

 

Note

 

31.12.2005

 

31.12.2004

 

Cash flows from operating activities

 

 

 

 

 

 

 

Profit for the period from continuing operations 

 

 

 

721.932

 

262.997

 

Adjustments for:

 

 

 

 

 

 

 

Non-cash items included in profit and other adjustments:

 

 

 

172.620

 

228.942

 

Depreciation, amortisation & impairment on fixed assets & invest property

 

 

 

114.550

 

125.161

 

Impairment losses on investments

 

 

 

664

 

346

 

Credit loss expense / (recovery)

 

 

 

226.259

 

173.843

 

Equity income of associates

 

 

 

(43.700

)

(25.154

)

Deferred tax expense / (benefit)

 

 

 

32.802

 

(671

)

Dividend income from investment securities

 

 

 

(6.136

)

(5.968

)

Net (profit) / loss on sale of fixed assets & investment property

 

 

 

(23.476

)

(37.389

)

Net (income) / expense on investment securities

 

 

 

(128.343

)

(1.226

)

 

 

 

 

 

 

 

 

Net (increase) / decrease in operating assets:

 

 

 

(4.274.620

)

(1.467.278

)

Net due from / to banks

 

 

 

616.377

 

(3.856.775

)

Financial assets at fair value through P&L

 

 

 

(3.786.769

)

4.825.680

 

Net proceeds / (purchase) of treasury bills and other eligible bills

 

 

 

1.443

 

(46.370

)

Net derivative financial instruments

 

 

 

(102.103

)

 

Net loans and advances to customers / due to customers

 

 

 

(1.031.162

)

(2.441.082

)

Other assets

 

 

 

27.594

 

51.269

 

 

 

 

 

 

 

 

 

Net increase / (decrease) in operating liabilities:

 

 

 

627.830

 

241.015

 

Other deposits

 

 

 

121.079

 

73.193

 

Income taxes paid

 

 

 

(154.595

)

(170.284

)

Other liabilities

 

 

 

661.346

 

338.106

 

Net cash flow from / (used in) operating activities from continuing operations

 

 

 

(2.752.238

)

(734.324

)

Net cash flow from / (used in) operating activities from discontinued operations

 

 

 

(348.793

)

(144.519

)

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

Acquisition of subsidiaries, net of cash acquired

 

 

 

(12.470

)

(50.585

)

Acquisitions / disposals of associates, net of cash

 

 

 

806

 

(409

)

Dividends received from investment securities & associates

 

 

 

16.051

 

16.321

 

Net proceeds / (purchases) of fixed assets

 

 

 

(71.521

)

(123.918

)

Net proceeds / (purchases) of investment property

 

 

 

895

 

20.106

 

Net proceeds / (purchases) of investment securities - available for sale

 

 

 

483.149

 

(237.238

)

Proceeds from redemption of investment securities - held to maturity

 

 

 

(20.867

)

 

Net cash from / (used in) investing activities from continuing operations

 

 

 

396.043

 

(375.723

)

Net cash from / (used in) investing activities from discontinued operations

 

 

 

129.993

 

52.685

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

Proceeds from /(repayments of) borrowed funds and debt securities

 

 

 

301.468

 

(3.853

)

Issuance of undated tier I perpetual securities

 

 

 

230.000

 

482.149

 

Net sales /(purchases) of treasury shares

 

 

 

275.856

 

102.745

 

Minority interest

 

 

 

28.408

 

(53.029

)

Dividends paid

 

 

 

(193.230

)

(160.522

)

Net cash from / (used in) financing activities from continuing operations

 

 

 

642.502

 

367.490

 

Net cash from / (used in) financing activities from discontinued operations

 

 

 

 

 

 

 

 

 

 

 

 

 

Effect of foreign exchange rate changes on cash and cash equivalents

 

 

 

129.581

 

(116.487

)

Net increase/(decrease) in cash and cash equivalents

 

 

 

(1.802.912

)

(950.878

)

Cash and cash equivalents at beginning of period

 

47

 

4.930.173

 

5.881.051

 

Less: cash & cash equivalents at period end from discontinued operations

 

 

 

(62.515

)

 

Cash and cash equivalents at end of period

 

47

 

3.064.746

 

4.930.173

 

 

The notes on pages 8 to 77 form an integral part of these consolidated financial statements

 

7



 

Notes to the Consolidated Financial Statements

 

NOTE 1: General Information

 

National Bank of Greece S.A. (hereinafter the “Bank”) was founded in 1841 and has been listed on the Athens Stock Exchange since 1880. The Bank has further listing in the New York Stock Exchange (since 1999), and in other major European stock exchanges. The Bank’s headquarters are located at 86 Eolou street, (Reg. 6062/06/B/86/01), tel.: (+30) 210 334 1000. By resolution of the Board of Directors the Bank can establish branches, agencies and correspondence offices in Greece and abroad. In its 164 years of operations the Bank has expanded on its commercial banking business by entering into related business areas. National Bank of Greece and its subsidiaries (hereinafter the “Group”) provide a wide range of financial services including retail and commercial banking, asset management, brokerage, investment banking, insurance and real estate on a global level. The Group operates primarily in Greece, but also has operations in UK, SE Europe, Cyprus, Egypt, South Africa and North America (discontinued).

 

The Board of Directors, following the Bank’s Annual General Meeting held on 17 May 2005, consists of the following members:

 

Executive Members

 

 

Efstratios-Georgios (Takis) A. Arapoglou

 

Chairman—Chief Executive Officer

Ioannis G. Pechlivanidis

 

Deputy Chief Executive Officer

 

 

 

Independent Non-Executive Members

 

 

George M. Athanasopoulos

 

Employees’ representative

John P. Panagopoulos

 

Employees’ representative

Ioannis C. Yiannidis

 

Professor, University of Athens Law School

H.E. the Metropolitan of Ioannina Theoklitos

 

 

Stefanos C. Vavalidis

 

Member of the Board of Directors, European Bank for Reconstruction & Development

Dimitrios A. Daskalopoulos

 

Chairman and Managing Director, Delta S.A., Vice Chairman, Federation of Greek Industrialists

Nikolaos D. Efthymiou

 

Chairman, Association of Greek Shipowners

George Z. Lanaras

 

Shipowner

Stefanos G. Pantzopoulos

 

Business Consultant, former Certified Auditor

Constantinos D. Pilarinos

 

Economist, General Manager of Finances and Technical Services, Church of Greece

Drakoulis K. Fountoukakos-Kyriakakos

 

Entrepreneur, Chairman of Athens Chamber of Commerce and Industry

Ioannis Vartholomeos

 

Professor, University of Piraeus, Governor of IKA (Social Security Fund)

Ploutarchos K. Sakellaris

 

Professor, University of Athens, and Chairman, Council of Economic Advisors.