November 22, 2018 / 4:41 PM / in a month

UPDATE 1-Greece's Eurobank Q3 profit jumps on higher fee revenues

(Adds details, CEO comment)

ATHENS, Nov 22 (Reuters) - Greece’s third-largest lender Eurobank on Thursday reported a sharp quarterly rise in net profit in July to September, on higher fee revenues and gains from international operations.

Eurobank, which is 2.4 percent owned by the country’s HFSF bank rescue fund, reported net earnings of 45 million euros ($51.30 million) from continued operations, compared to a profit of 1.0 million euros in the second quarter.

International operations, mainly in the Balkans and Cyprus, contributed 40 million euros in the third quarter.

So-called non-performing exposures (NPEs) are the biggest challenge facing the country’s banking sector, hit hard by the euro zone’s debt crisis and years of deep recession.

Credit loss provisions rose quarter-on-quarter to 176 million euros from 169 million in the second quarter. Non-performing exposures (NPEs) dropped to 39.0 percent of total loans from 40.7 percent at the end of June.

“Dealing with the legacy of NPEs remains our top priority... We have delivered on all the targets that had been set in cooperation with our regulators,” Chief Executive Fokion Karavias said in a statement.

Banks have been under regulatory pressure to tackle the bad debt problem, which restricts their ability to expand credit and assist the economy’s recovery.

“We recently submitted a new plan for the period 2019-21, which provides for a frontloaded reduction of the NPEs, targeting a ratio for the group of about 15 percent at the end of the period,” Karavias added.

Accounting for discontinued operations, the bank reported a net profit of 59 million euros compared to net earnings of 55 million euros in the second quarter. ($1 = 0.8773 euros) (Reporting by Lefteris Papadimas Editing by Alexandra Hudson)

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