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Greece’s Eurobank stays profitable in first quarter

Greece’s Eurobank was profitable for a fifth straight quarter in January-to-March but net earnings dropped slightly while provisions for bad debt were flat compared to the previous quarter.

The third-largest Greek lender by assets, in which the country’s bank rescue fund HFSF owns a 2.4 percent stake, reported net earnings of 37 million euros ($41 million), down 4.7 percent from 38 million in last year’s final quarter.

The bank, which made an annual profit of 230.1 million euros last year, after losing 1.18 billion euros in 2015, said operations abroad were also profitable in the first quarter.

Greek banks including Eurobank are struggling with problem loan portfolios after a deep, protracted recession pushed unemployment to record highs, making it hard for borrowers to service their debts.

Banks entered the 2008 global financial crisis with bad loans, or non-performing exposures (NPEs), of 14.5 billion euros, about 5.5 percent of their loan books. NPEs rose to 106.9 billion, or 51 percent, last year.

Lenders have agreed with regulators on ambitious bad debt reduction targets, aiming to cut their NPEs to 66.7 billion euros by 2019 to bring their ratio to 34 percent of total loans, down from 51 percent at the end of 2016.

“Non-performing exposures were reduced by 290 million euros, in line with targets submitted to regulatory authorities. This confirms our commitment to attain this year’s target,” Eurobank’s CEO Fokion Karavias said in a statement.

The bank’s credit-loss provisions rose 1 percent quarter-on-quarter to 188 million euros.

Non-performing credit, loans more than 90 days past their due date, rose slightly to 34.8 percent of its loan book from 34.7 percent at the end of December, as 154 million euros of loans turned NPLs in the quarter.

But the bank’s NPE ratio eased to 45 percent, from 45.2 percent at the end of last year.

Eurobank said funding from the Greek central bank’s emergency liquidity facility (ELA) rose to 12.2 billion euros by the end of March after a 372 million euro drop in deposits, but had come down to 11.6 billion by mid-May.

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