ETHNIKI Asfalistiki group has shown an amazing improvement regarding operational profits during the fiscal year of 2011 against great unfavorable circumstances, a fact that maintains the company in its leader role with a notable distance from the companies' competitors in the industry.

Before taxis and prior to reduction profits (mainly because of PSI participation) amounted at EUR 111.6 million against EUR 0.2 million in 2010. Before taxis financial assets of the parent firm came at around EUR 109.7 million in 2011 from EUR 4.7 million in 2010.

The improved financial performance occurred despite the reduction in turnover of the Group to EUR 893.2 million from EUR 1047.5 million in 2010, a decrease from the general decline of business in the insurance industry and the deliberate departure from damaging activities. However, the company continues to maintain its leading position in market share of around 19% in life insurance and 16% in the general insurance sector.

The spectacular development of profitability is a result of the company's strategy to exit from loss-making activities, decisions on trade policy review in the motor sector, complaint on damaging collaborations, the actions for effective cost control damage and the redesign of the credit and collection policies that led to a significant reduction of dept claims.

Furthermore, the company succeeded in reducing total operating costs (excluding depreciation) at almost 16% (decrease by an amount of EUR 25.5 million) compared with 2010.

However, the impairment of financial assets of the Firm was mainly due to its participation in the voluntary exchange of G.P. Bonds (PSI) that fatally burdened results at EUR 631.2 million therefore the Ethniki Asfalistiki Group was led to after tax losses of EUR 425.7 million.

These losses have resulted in the equity of the Group to be negative and in 31.12.2011 recorded EUR -227.4 million.

The company however, has taken the necessary steps to strengthen its equity and restore the balance of the capital directly. In this context, the sole shareholder of Ethniki Asfalistiki the National Bank of Greece has pledged to cover the full amount of the required equity.

Deputy CEO of NGB (National Bank of Greece) and President of ETHNIKI Asfalistiki Mr Leonidas Theoklitos stated: "In 2011, despite serious setbacks, it was a record year for Ethniki Asfalistiki. At this time the Company has achieved significant operating profitability after a long period, about 10 years, of poor results, due to the broad restructuring program of operations and the valuable contribution of its human resources. These results come in a period of widespread recession demonstrating the company's credibility and its strong position in the insurance market and the possibilities of further development for the benefit of the industry and of course the NBG GROUP.

Losses, however, that ETHNIKI Asfalistiki had to suffer from impairment of insurance reserves by participating in PSI resulted in negative equity. Note however,that the Bank, under the recapitalization program, will contribute its subsidiary funds needed for the smooth operation and further development of its work.

In 2012 we expect to further upgrade the leadership of ETHNIKI Asfalistiki by adopting products that respond to current conditions and taking initiatives to solve chronic problems plaguing the insurance market".

Source: Nextdeal