Eurobank swings to loss in fourth quar­ter

The Pak Banker - - FRONT PAGE -

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.

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