Piraeus Bank net profit falls by 96pc in Q2
ATHENS: Piraeus Bank SA (TPEIR.AT), Greece's fourth-largest lender by assets, said Thursday that secondquarter net profit tumbled 96%, hit by an extraordinary tax and rising provisions for non performing loans.
But this was still better than expectations of a loss for the second quarter in a poll conducted by Dow Jones Newswires.
"In the second quarter, Piraeus Group effectively managed the volatility of the economic environment and succeeded in improving its organic profitability. For the second semester of 2010 and according to current indications, the group's performance is expected to be resilient," Chairman and Chief Executive Officer Michalis Sallas said.
For the three months to June 30, the bank said net profit totaled EUR3 million, after a net profit in the previous year of EUR77 million. Piraeus booked a EUR28 million tax imposed by the cash-strapped Greek state on profitable companies.
The results were also weighed down by increasing provisions for bad loans that came in at EUR135 million from EUR126 million for the second quarter of 2009.
Provisions for nonperforming loans are increasing for the whole Greek banking system in the recessionary environment, and gross domestic product is expected to contract by 4% this year. Analysts had forecast a second-quarter net loss of EUR20.6 million and provisions of about EUR140.6 million.
Net interest income--the difference that the bank earns between its loans and deposits-rose 10% to EUR298 million from EUR273 million a year earlier, near market expectations of EUR289.3 million.
Second-quarter NII benefited from loan re-pricing and investment in high-yielding Greek bonds that offset higher funding costs. -PB News
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