March 12, 2020 / 4:26 PM / 23 days ago

UPDATE 1-Eurobank focused on profit as lowers loan-loss provisions

(Adds CEO comment, 2020 business plan targets)

ATHENS, March 12 (Reuters) - Greece’s third-largest lender Eurobank raised its net profit in 2019 as provisions for impaired loans eased and said it would now be focusing on profitability.

Greek banks have been working to reduce a pile of about 75 billion euros ($83 billion) in bad loans, a legacy of a financial crisis that shrank the country’s economy by a quarter.

Shedding this bad debt is crucial for the ability of the country’s banks to lend and shore up profits.

Eurobank, which is 2.4% owned by the country’s HFSF bank rescue fund, said on Thursday its net earnings were 127 million euros for the full year, up 36.2% from 93 million euros in 2018.

The bank, which has applied to participate in Greece’s bad loan reduction scheme through a 7.5 billion euro securitisation, said profitability is now its key priority.

“Having dealt with the burden of the NPE (non-performing exposures) stock, we concentrate all our efforts into strengthening our business, financing solid projects, attracting new clients,” Eurobank CEO Fokion Karavias said.

Credit loss provisions dropped 8.3% year-on-year to 624 million euros, while non-performing exposures (NPEs) dropped to 29.2% of its loan book from 31.1% at the end of September.

“Our NPEs, already by far the lowest in Greece, should reach single-digit in 2021 and further drop to 5% in 2022,” Karavias said.

Eurobank said it is targeting earnings per share of about 0.12 euro this year, from 0.07 in 2019. Its shares plunged 17.3% on Thursday, amid heavy losses in the Greek bourse’s banking index, which shed 16.2%. ($1 = 0.9030 euros) (Reporting by George Georgiopoulos; Editing by Alexander Smith)

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