The intensifying Greek Sovereign debt crisis and the
implemented drastic austerity measures have given rise to an
unabated deterioration across all market sectors of the Greek
economy which warrants for a reinforcement of the prudent
provisioning policy applied by the Marfin Popular Bank
Group.
As a result, provisions for loan impairments for the
financial year 2011, relating mainly to the Greek Operations,
are expected to be higher compared with the previous year
and, by extension, the Goodwill relating to the Greek
Operations is expected to be impaired to reflect the above
developments. It is noteworthy that as per Central Bank of
Cyprus' regulations, goodwill is already deducted from the
Group´s capital base and, as a result, any impairment of
goodwill, will not affect any harmful effects on the existing
regulatory capital of the Group.
In response to the effect on profitability arising from the
increased provisions, Marfin Popular Bank, has applied
decisive controls for 2012 on costs and is planning
reformation of its branch network across all geographical
areas, whilst a recalibration plan for the Greek Operations
is under study. The implementation of the plan during 2012,
is expected to deliver significant cost rationalisation on
the ground and crystallise synergies and savings at Group
level.
In parallel to the accelerated cost cutting efforts, Marfin
Popular Bank is refocusing on its own
domestic market which constitutes the bulk of its' strong
franchise value.
The Group feels confident that its core business sectors,
International Business Banking, Retail banking and Corporate
and Commercial banking will continue to deliver strong
operating profitability underpinned by the significant
potential arising from the established hydrocarbon reserves
and the prospects of the island becoming a regional energy
hub and an alternative gateway to Europe.
Marfin Popular Bank will publish its preliminary results for
2011 before the end of February 2012.
Nicosia 18/1/2012
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