Pi­raeus prof­its drop but beat ex­pec­ta­tions

Kathimerini English - - Business & Finance -

In­creased pro­vi­sions caused Pi­raeus Bank’s first-quar­ter prof­its to shrink sig­nif­i­cantly from last year, the lender an­nounced yes­ter­day, al­though the fig­ures were bet­ter than pre­dicted.

Bad loans are ex­pected to in­crease as a re­sult of the coun­try’s con­tin­u­ing re­ces­sion and gov­ern­ment mea­sures which have cut salaries and pen­sions, with net in­come for the lender drop­ping from 7 mil­lion eu­ros in the Jan­uary-March 2010 to just 2 mil­lion in the same pe­riod this year.

How­ever, an­a­lysts had been ex­pect­ing prof­its of be­tween 1.5 and 1.6 mil­lion eu­ros.

“The re­cent share cap­i­tal in­crease has strength­ened the group’s bal­ance sheet and im­proved cap­i­tal ad­e­quacy ra­tions,” stated the group’s chair­man, Michalis Sal­las.

Hav­ing marginally passed the Euro­pean Cen­tral Bank’s stress test last sum­mer, Pi­raeus com­pleted a rights is­sue to the amount of 807 mil­lion eu- ros that boosted its cap­i­tal ra­tio by 200 ba­sis points.

Its loan losses and pro­vi­sions came to 171 mil­lion eu­ros, up from 134 mil­lion a year ear­lier, rep­re­sent­ing a 28 per­cent in­crease. Op­er­at­ing ex­penses were re­duced by 3 per­cent.

“In re­sponse to the un­fa­vor­able con­di­tions in the Greek mar­ket, the path we are pur­su­ing con­sists of con­tain­ing costs, im­prov­ing rev­enues and re­main­ing pru­dent in man­ag­ing risks and liq­uid­ity,” Sal­las added.

De­posits de­clined by 5 per­cent, al­though de­posits out­side Greece in­creased by 4 per­cent. The loans-tode­posits ra­tio rose to 129 from 25 per­cent. The ra­tio of loans in ar­rears over 90 days grew to 8.6 per­cent of all loans from 7.6 per­cent in the pre­vi­ous quar­ter.

Pi­raeus Bank shares failed to reg­is­ter any move­ment at the end of trade on the Athens bourse yes­ter­day, while all other bank stocks in the blue chip in­dex posted losses.

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