Marfin Popular triples profits

CYPRUS’ second-largest lender, Marfin Popular Bank (MPB), said yesterday net profit more than tripled in 2006 with investors expected to focus on the bank’s new targets set out in its three-year business plan.

MPB, formed when Laiki Bank merged with Greek banks Egnatia and Marfin last year, said its 2006 pro-forma net profit grew 235 per cent to 396.6 million euros.

It said 2006 pro-forma net interest income rose 20 per cent to 486.07 million euros, while fee and commission income rose 36 per cent to 197.7 million.

Analysts said investors would now focus on whether Marfin could achieve its targets for the next three years. Earlier this month, MPB said it was aiming to grow net profit to 600 million euros by 2009.

“The key theme is MPB’S performance versus these targets,” said analyst Sofia Skourtis at HSBC Pantelakis Securities.

The new group’s pro-forma cost-to-income ratio fell to 40.5 per cent in 2006 from 59.1 per cent in 2005.

MPB said its board of directors appointed Soud Baalawy, executive chairman of Dubai Investment Group, as chairman of the bank. Dubai Investment Group unit Dubai Financial holds about 17 percent in MPB.

“Marfin Popular Bank has a vision to become one of the biggest and most successful banking groups in southeastern Europe,” Baalawy said in a statement. MPB has said it is also looking to expand in Russia, Bulgaria and Ukraine.

MPB said its shareholders would meet soon to decide on possible public offers for Greek or Cypriot banks.

Last month, MPB launched a bid for Greece’s Piraeus Bank but Cyprus’ securities regulator has ruled MPB’s bid invalid. Piraeus has bid for at least 40 per cent of MPB but MPB’s major shareholders have rejected the offer.

MPB said the integration of the three banks was “significantly under way”, expecting completion by the end of June.

The bank’s shares trade at just under 23 times 2007 estimated earnings, a premium to its Greek peers which trade at about 19 times, according to Reuters Estimates.

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