Reuters logo
UPDATE 1-Piraeus Bank posts Q4 loss on surging bad debt provisions
March 9, 2016 / 4:47 PM / 2 years ago

UPDATE 1-Piraeus Bank posts Q4 loss on surging bad debt provisions

* Piraeus Bank posts 1.24 bln euros loss in Q4

* Bad loan provisions surge to 1.38 bln euros in Q4

* Non-performing credit drops to 39.5 pct of loan book (Adds chairman comment, details)

By George Georgiopoulos

ATHENS, March 9 (Reuters) - Greece’s second-largest lender Piraeus Bank posted a loss in last year’s final quarter, hurt by a surge in provisions for impaired loans.

Greek banks are still troubled by large problem loan portfolios after the country’s deep recession pushed unemployment to record highs. They continue to make bad debt provisions as unemployment has made it hard for borrowers to service their debts.

Piraeus, which is 26.2 percent owned by the country’s bank rescue fund HFSF after its recapitalisation late last year, reported a loss of 1.24 billion euros ($1.36 billion) after a net profit of 495 million euros in the third quarter of 2015.

The group, with a current market value of 1.55 billion euros, said loan-loss provisions rose more than fivefold to 1.38 billion euros in October-to-December from 244 million in the third quarter.

Greece and its international lenders resumed talks in Athens on Wednesday on the country’s fiscal and reform progress, rekindling Athens’ hopes that its first bailout review may be concluded before the end of April.

Handling of Greek banks’ non-performing loans will also be on the table of discussions.

“The positive conclusion of the critical negotiations between Greece and the institutions for the first review of the new (bailout) programme will create positive momentum in the economy,” the bank’s Chairman Michael Sallas said.

“It will offer banks the chance to confront the loans in arrears issue even more effectively,” he said.

The group’s non-performing credit -- loans in arrears more than 90 days -- dropped to 39.5 percent of its loan book at the end of December from 40.5 percent in the third quarter.

Provisioning increased the coverage ratio of impaired loans to 65 percent from 61 percent in September.

Piraeus said the jump in provisions was also related to a further reduction in real estate prices.

Greek housing prices fell 5.1 percent in 2015, meaning residential properties are now worth 41.5 percent less than in 2008, before an enduring recession that forced the country close to bankruptcy.

Piraeus said group deposits increased by 1.8 billion euros to 39 billion euros in the fourth quarter after a significant decline in the first nine months of the year.

This helped the bank reduce its borrowing from the ECB and the Bank of Greece to 32.7 billion euros from 35.8 billion in September. Of this amount, funding from the Greek central bank’s emergency window dropped to 16.7 billion euros from 21.2 billion in September.

$1 = 0.9108 euros Reporting by George Georgiopoulos, editing by David Evans

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below