(Adds executive comment, background)
ATHENS May 10 Greece's third-largest lender
Alpha Bank swung to a net profit in the first quarter
after it wrote up the value of a rival lender it acquired last
October and lowered its reliance on a costly emergency funding
Net profit was 2.88 billion euros ($3.75 billion), compared
to a loss of 82.5 million in the same period a year earlier, the
bank said on Friday. Earnings were boosted further by a 427
million euro tax credit.
Alpha Bank acquired Emporiki Bank from Credit Agricole
for a nominal consideration of 1 euro.
The French lender pumped in 2.9 billion euros to
recapitalise Emporiki under the deal. Alpha, consolidating
Emporiki's results for the first time, booked most of that
amount as a goodwill write-back.
Alpha said net interest income rose 12 percent
quarter-on-quarter to 321 million euros as reduced recourse to
the Greek central bank's costly emergency liquidity funding
mechanism (ELA) eased funding costs.
Greek banks resumed funding directly from the European
Central Bank in December. ECB funding is about 2 percentage
points cheaper than ELA funding.
Excluding the 2.6 billion euro positive contribution from
the consolidation of Emporiki, Alpha's net profit came to 244
With Greece's economy in its sixth consecutive year of
recession and more than one in four Greeks without jobs, credit
impairments continue to pound loan books, forcing banks to
provision for losses.
The economy is projected to shrink by 4.2 to 4.5 percent,
this year, meaning non-performing loans could rise further.
Alpha's provisions in the first quarter rose 58 percent year
on year to 505 million euros, with its ratio of non-performing
loans (NPLs) rising to 30.1 percent of its loan book.
"We are seeing a slowdown in the rate of increase in NPLs,
which is consistent with our projection that in absolute numbers
they may peak in the beginning of 2014," Alpha's Chief Operating
Officer Spyros Filaretos told Reuters.
(Reporting by George Georgiopoulos; Editing by Tom Pfeiffer)