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UPDATE 1-Major Greek banks post losses as recession bites
March 27, 2013 / 5:02 PM / in 5 years

UPDATE 1-Major Greek banks post losses as recession bites

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ATHENS, March 27 (Reuters) - Three of Greece’s biggest lenders National, Eurobank and Alpha Bank reported full-year losses as the country’s deep recession pounded loan books and higher funding costs squeezed income.

Greece’s economy contracted 6.4 percent last year, leaving more than one in four Greeks without jobs and pushing up loan impairments, forcing banks to provision for credit losses.

National Bank (NBG), the country’s largest lender which also has operations in Turkey, said its loss narrowed to 2.14 billion euros from a loss of 12.14 billion in 2011, which included a hit from a sovereign debt writedown.

NBG said provisions for bad loans rose 16 percent to 2.53 billion euros, with loans past due for more than 90 days hitting 19 percent.

Eurobank, which is now 84 percent owned by NBG, reported a loss of 1.45 billion euros. NBG bought the bank earlier this year to form the country’s biggest banking group.

Third-largest lender Alpha Bank, which acquired Emporiki Bank from French bank Credit Agricole in October, narrowed its full-year loss to 1.08 billion euros from 3.81 billion in 2011.

Alpha’s net interest income fell 21.7 percent, while NBG’s dropped 30 percent.

Tough conditions are seen persisting in 2013, with the economy projected to shrink for a sixth straight year by about 4.5 percent, meaning non-performing loans could rise further.

Apart from loan impairments, higher funding costs stemming in part from banks’ recourse to the Greek central bank’s emergency liquidity funding mechanism (ELA) pressured their net interest income.

Greek banks resumed funding directly from the European Central Bank in December. ECB funding is about two percentage points cheaper than ELA funding. (Reporting by George Georgiopoulos and Lefteris Papadimas; Editing by Louise Heavens)

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