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UPDATE 1-Greece's Piraeus Bank posts profit, Eurobank in the red
August 29, 2014 / 4:26 PM / 3 years ago

UPDATE 1-Greece's Piraeus Bank posts profit, Eurobank in the red

* Piraeus Q2 profit at 164 mln eur vs forecast for loss of 133 mln eur

* New bad debts slow for sixth straight quarter

* Peer Eurobank posts wider-than-expected Q2 loss (Adds details, Eurobank results)

By George Georgiopoulos

ATHENS, Aug 29 (Reuters) - Greece’s Piraeus Bank beat market expectations by posting a profit in the second quarter, helped by higher net interest income and a deferred tax benefit.

The country’s second-largest lender by assets reported a net profit of 164 million euros ($216 million), compared with a loss of 247 million euros in the first quarter.

Analysts polled by Reuters had forecast a second-quarter loss of 133 million euros, on average.

Piraeus, which is 67.3 percent owned by the country’s bank bailout fund, said net interest income rose 4 percent quarter-on-quarter to 500 million euros, benefiting from the lower cost of term deposits.

A deferred tax benefit of 200 million euros helped it book a profit.

New non-performing loans (NPLs) at Piraeus slowed for the sixth straight quarter. The bank said NPLs - loans in arrears for more than 90 days - made up 38.5 percent of its book, up from 37.9 percent in the first quarter.

Loan-loss provisions reached 476 million euros in the second quarter or 2.6 percent of gross loans, stable versus the first quarter.

Piraeus and Greece’s other big banks, which will undergo a health check by the European Central Bank in October, have been struggling with loan impairments after a deep six-year recession which pushed the jobless rate to over 27 percent.

Record joblessness has made it hard for borrowers to service their debts, forcing lenders to make provisions for losses even though the pace of new bad debts is slowing.

Peer Eurobank reported a wider-than-expected loss in the second quarter as loan impairment charges continued to weigh on its bottom line.

Eurobank, 35.4 percent owned by Greece’s HFSF bank rescue fund, posted a loss of 301 million euros. Analysts in a Reuters poll had expected a loss of 238 million euros, on average.

Greece’s third-largest lender by assets said non-performing loans rose to 31.8 percent of its loan book, from 30.9 percent in the first quarter. (1 US dollar = 0.7584 euro) (Reporting by George Georgiopoulos)

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