Greece's Eurobank reports surge in 2022 profit as economy improves

A man walks outside a Eurobank branch in Athens
A man walks outside a Eurobank branch in Athens, Greece, January 17, 2022. REUTERS/Louiza Vradi

ATHENS, March 9 (Reuters) - Eurobank (EURBr.AT), Greece's largest lender by market value, reported that profit quadrupled last year on the back of higher net interest income and lower provisions for impaired loans.

The bank, which is 1.4% owned by the country's HFSF bank rescue fund, reported a net profit of 1.33 billion euros ($1.41 billion) versus 328 million euros in 2021.

Greek banks are benefiting as the country's economy rebounds from a decade-long debt crisis and the COVID-19 pandemic. It expanded by 5.9% last year on higher consumer spending, strong tourism and investment.

Eurobank's net interest income grew by 17.4% year on year in 2022 to 1.55 billion euros, driven by higher rates, lending and its international business.

It said it will start paying a dividend out of its earnings next year, for the first time since the debt crisis, with the planned payout ratio seen at around 25%. The bank initially planned to distribute a dividend this year.

"The amount earmarked for dividend distribution (in 2023) will be used in an optimal way to bid for the 1.4% HFSF stake through a share buyback scheme," said Eurobank's Chief Executive Fokion Karavias.

The HFSF fund has spent about 40 billion euros ($43 billion)to recapitalise Greece’s four largest lenders during the country's decade-long financial crisis, receiving shares in exchange.

HFSF holds a 40.4% stake in National Bank of Greece (NBGr.AT), 27% in Piraeus Bank (BOPr.AT), 9% in Alpha (ACBr.AT) and 1.4% in Eurobank (EURBr.AT).

Eurobank's non-performing loan exposure (NPE) ratio fell to 5.2% at the end of December, from 6.8% at the end of 2021, with the stock of bad loans declining to 2.3 billion euros, from 2.8 billion euros at the end of 2021.

($1 = 0.9452 euros)

Reporting by Athens newsroom; Editing by Kirsten Donovan and Susan Fenton

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