November 29, 2018 / 4:47 PM / 10 months ago

UPDATE 1-Greek banks NBG, Alpha turn profitable in third quarter

* NBG swings to profit on improved trading income

* Alpha reports profit of 41.1 mln on lower provisions, trading gain (Adds details, CEO comments)

By George Georgiopoulos and Lefteris Papadimas

ATHENS, Nov 29 (Reuters) - Greek lenders National Bank (NBG) and Alpha Bank both returned to profit in the third quarter, as they focused on shrinking their bad loan piles.

NBG, Greece’s second-largest by assets and 40 percent owned by the country’s HFSF bank rescue fund, reported a net profit from continued operations of 17 million euros ($19 million) versus a net loss of 15 million euros in the second quarter.

NBG had booked a 40 million euro charge for a voluntary retirement scheme in the second quarter, which weighed on its bottom line.

Alpha Bank, the country’s fourth largest lender, swung to a net profit from continuing operations of 41.1 million euros, after a net loss of 52.9 million euros in the second quarter.

Its provisions for bad debt fell 6 percent quarter-on-quarter to 295 million euros, while its non-performing loans ratio dropped to 34.1 percent of its book from 35.6 percent at the end of June.

Alpha Bank also announced on Thursday that it had agreed a deal to sell 1 billion euros ($1.1 billion) of small-business non-performing loans to a consortium of funds managed by Apollo Global Management and the International Finance Corp.

Greek banks remain focused on reducing their bad debt portfolios and meeting targets on so-called non-performing exposures (NPEs) agreed with Single Supervisory Mechanism (SSM) regulators.

“Economic conditions are steadily improving in Greece and should support organic profitability and NPE reduction going forward. It will also facilitate NPE sales, especially as these will include loans with real estate collaterals,” NBG Chief Executive Paul Mylonas said in a statement.

He said the implementation of a “transformation programme” that will be announced in the first quarter of 2019 would lead profitability to “substantially higher levels.”

National Bank’s NPE ratio, which includes non-performing loans (NPLs) and other credit likely to turn bad, edged down to 42 percent from 42.1 percent in June.

Provisions for credit impairments almost doubled quarter-on-quarter to 81 million euros.

NBG said its stock of NPEs amounted to 15.9 billion euros in the third quarter. Trading income in the three-month period rebounded to 17 million euros from a loss of 9 million in the second quarter as a result of gains in derivatives.

$1 = 0.8787 euros Reporting by George Georgiopoulos; Editing by Susan Fenton

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