Eurobank swings to loss in fourth quarter
Eurobank reported a loss for the final quarter of last year, with provisions for bad loans putting pressure on its bottom line. Kicking off the earnings reporting season for Greek banks, the country's third-largest bank by assets made a net loss of 175 million euros ($189.5 million) after a 406-million euro profit in the third quarter.
"Although the extended regime of capital controls in Greece and delays in negotiations on the first (bailout) review are hampering economic activity, our main goal remains to return to profitability this year," Chief Executive Fokion Karavias said in a statement. Greek banks are still troubled by large problem loan portfolios after the country's deep recession pushed unemployment to record highs. They continue to make bad debt provisions as joblessness has made it hard for borrowers to service their debts.
The group, with operations in the Balkans including Romania and Bulgaria, set aside provisions for bad loans to strengthen its balance sheet and increase the cash coverage of non-performing loans. Eurobank, which is 2.4 percent owned by Greece's HFSF bank rescue fund after its recapitalisation late last year, said credit loss provisions rose 5.7 percent quarter-on-quarter to 271 million euros in October-to-December.
Non-performing credit -- loans in arrears for more than 90 days -- inched up to 35.2 percent of its loan book from 35 percent in the third quarter. Group deposits rose by 1.4 billion euros in the fourth quarter to 31.45 billion, helping the bank to reduce central bank borrowing to 24.3 billion euros from 31.6 billion euros at the end of the third quarter.