ATHENS--Greece's third-largest lender by assets, Eurobank
Ergasias SA (EUROB.AT), reported a better-than-expected
third-quarter net loss Friday after further boosting provisions for
bad loans but added that it expects to return to profitability next
year.
For the three months through September, the bank said losses
totaled 187 million euros ($233.2 million), compared with EUR285
million a year ago.
After six years of recession, a financial crisis and an
unprecedented sovereign debt restructuring, Greek banks are
struggling to nurse their balance sheets back to health.
Eurobank, along with Greece's three other big lenders--Alpha
Bank SA, Piraeus Bank SA, National Bank of Greece SA --are
staggering under a mountain of bad loans that collectively add up
to about EUR80 billion and make up about a third of banking system
loans.
Amid signs of a recovery in Greece's economy, the rate of new
bad loans has been slowing and is expected to peak later this year
or early next year. However, Eurobank as well as Alpha and NBG have
been trying to boost their coverage ratio of those loans. In the
third quarter, Eurobank reported credit loss provisions of EUR588
million, up from EUR417 million a year earlier.
At the same time, the Greek banks have been able to bolster
their liquidity by attracting back nervous depositors and reduce
their dependence on emergency ECB cash. Eurobank said that its net
interest income--a core measure of income reflecting the difference
between what a bank pays depositors and collects from
borrowers--continued to improve. In the third quarter, the bank
said net interest income rose to EUR379 million from EUR320 million
in the same period a year earlier.
It added that deposits expanded by 772 million euros to 42.7
billion euros at the end of the third quarter period.
"Having the necessary liquidity and a loans to deposits ratio
below 100%, we can finance our customers, households and
businesses. The results of the third quarter 2014 lay the
foundations for Eurobank's return to profitability in 2015," the
bank's Chief Executive Christos Megalou said in a statement.
The results were generally better than expected with analysts
estimating third-quarter losses of more than EUR200 million.
Write to Alkman Granitsas at alkman.granitsas@wsj.com
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