Lower core income squeezes Greek lender Eurobank’s profit

Eurobank, Greece’s third-largest lender by assets, reported lower net profit in January-to-March compared to the previous quarter as a decline in interest income and commission fees offset reduced provisions for impaired loans.

Eurobank, which is 2.4 percent owned by the country’s HFSF bank rescue fund, reported net earnings of 35 million euros ($41 million) from continued operations after profit of 43 million euros in the fourth quarter.

Accounting for discontinued operations, the bank reported a net profit of 57 million euros after net earnings of 53 million in the fourth quarter.

Greek lenders including Eurobank completed a health check by the European Central Bank earlier this month, with the stress test showing no potential shortage of capital before Greece leaves its 86 billion euro international bailout in August.

Banks remain focused on reducing their bad debt portfolios and meeting targets agreed with regulators by 2019.

“The management of non-performing exposures (NPEs) remains our main priority, … we are certain that we will attain all our NPE reduction targets in 2018,” Chief Executive Fokion Karavias said in a statement.

Eurobank’s ratio of so-called non-performing exposures dropped to 41.8 percent of its loan book from 42.5 percent at the end of 2017. NPEs include non-performing loans (NPLs) – credit past due for more than 90 days – plus restructured loans likely to turn non-performing again.

Credit-loss provisions fell to 167 million euros from 206 million in the fourth quarter. Non-performing exposures dropped to 41.8 percent of its book from 42.5 percent at the end of 2017.

The bank’s net interest income fell 4.8 percent quarter-on-quarter to 355 million euros, while commission and fee income dropped 8.4 percent compared to the previous quarter.

International operations remained profitable with net profit before discontinued operations rising to 33 million euros from 27 million euros in the same quarter a year earlier.

Eurobank has said it will maintain its Balkan footprint in Bulgaria, Serbia and Cyprus after pulling out of Romania. [Reuters]