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UPDATE 1-Piraeus Bank makes first-half net profit after one-off gain
August 28, 2013 / 3:31 PM / in 4 years

UPDATE 1-Piraeus Bank makes first-half net profit after one-off gain

* H1 net profit 3.5 bln euros

* Figure includes 3.81 bln euro goodwill write-back

* Non-performing loans rise to 33 pct of book

* Pretax loss 857 mln eur

ATHENS, Aug 28 (Reuters) - Greece’s Piraeus Bank stayed profitable in the first half thanks to one-off gains on the book value of its Cypriot bank operations, which camouflaged the effect of bad loans caused by the country’s deep recession.

Credit impairments continue to pound Greek bank loan books with the economy mired in its sixth consecutive year of recession and unemployment at nearly 28 percent, forcing lenders to take provisions for losses.

The country’s second-largest lender by assets reported a net profit of 3.5 billion euros ($4.7 billion). The figure included a 3.81 billion euro goodwill write-back from the Cypriot takeover and deferred tax.

Excluding the one-off gain, Piraeus said it lost 857 million euros before taxes.

Results are not comparable year-on-year as the group consolidated recent acquisitions - the healthy part of ATEbank, Geniki Bank, Cypriot bank operations and Millennium Bank.

The bank’s loan-loss provisions reached 1.05 billion euros, with its ratio of non-performing loans (NPLs) rising to 33 percent from 31 percent in the first quarter and 23 percent in December.

Net interest income reached 734 million euros, helped by lower funding costs after reduced recourse to the Greek central bank’s costly emergency liquidity facility (ELA) and a drop in deposit rates.

Greek banks resumed funding directly from the European Central Bank in December, when the country struck a new rescue deal with its international lenders. ECB funding is about 2 percentage points cheaper than ELA funding.

“Results were burdened by one-off integration costs for acquisitions, for which the goal is (to realise) ... the soonest possible, so that the group benefits from cost and revenue synergies,” said Chief Executive Stavros Lekkakos. ($1 = 0.7466 euros) (Reporting by George Georgiopoulos; Editing by David Holmes)

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