Greek banks Alpha, Eurobank post weak Q2 results

Greek banks Alpha and Eurobank posted weak second-quarter results on Thursday, with Alpha swinging to a loss and Eurobank barely profitable as both focus on shrinking their bad debt load.

Fourth-largest bank Alpha, 11 percent owned by the country’s bank rescue fund HFSF, reported a net loss from continuing operations of 52.9 million euros ($61.7 million) due to weaker trading income, after a net profit of 65.2 million euros in the first quarter.

Third-largest lender Eurobank, 2.4 percent owned by the HFSF fund, reported net earnings of just 1.0 million euros ($1.66 million) from continued operations after a profit of 35 million euros in the first quarter.

Greek banks remain focused on reducing their bad debt portfolios and meeting targets agreed with regulators.

“Our business priorities remain unchanged. First there is the gradual reduction of non-performing exposures (NPEs) which will drive the NPE ratio to 15 percent by the end of 2021,” Eurobank CEO Fokion Karavias said in a statement.

Eurobank’s NPEs dropped to 40.7 percent of its book from 41.8 percent at the end of March. NPEs include non-performing loans (NPLs) – credit past due for more than 90 days – plus restructured loans likely to turn non-performing again.

The bank’s credit-loss provisions rose quarter-on-quarter to 169 million euros from 167 million in January-to-March.

Eurobank’s net interest income rose 0.3 percent quarter-on-quarter to 356 million euros, while commission and fee income increased 15.3 percent compared to the previous quarter.

International operations remained profitable with net profit before discontinued operations rising 19.4 percent to 40 million euros. Eurobank has maintained its footprint in Bulgaria, Serbia and Cyprus after pulling out of Romania.

Alpha Bank’s non-performing loans ratio edged higher to 35.6 percent of its book from 35.2 percent at the end of March.

Chief Executive Dimitris Mantzounis said operational performance so far enabled the bank to absorb increased provisions as it implements its NPE reduction plan.

“Our liquidity profile improved significantly as we witnessed strong deposit inflows in Greece and we have moved closer to the full elimination of ELA support,” he said.

ELA is emergency liquidity assistance Greek banks can draw from the domestic central bank.

Alpha’s provisions for bad debt eased 6.6 percent quarter-on-quarter to 314 million euros but it booked additional impairment losses of 43 million euros related to restructuring of sour loans. [Reuters]