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UPDATE 1-Greece's Piraeus Bank posts loss as bad debt weighs
May 30, 2014 / 4:02 PM / 3 years ago

UPDATE 1-Greece's Piraeus Bank posts loss as bad debt weighs

* Q1 net loss 247 mln euros vs forecast 210 mln loss

* New bad debts slow for fifth straight quarter

* Subsidiary Geniki to be absorbed into group (Adds details)

ATHENS, May 30 (Reuters) - Piraeus Bank, Greece’s second-largest lender by assets, reported a wider-than-expected loss in the first quarter as provisions for impaired loans hurt its bottom line.

Piraeus reported a net loss of 247 million euros ($336.3 million), wider than the average forecast of 210 million euros from analysts in a Reuters poll.

The bank booked a profit a year earlier due to a one-off 3.41 billion euro goodwill writeback on the book value of Cypriot bank operations it acquired.

Greek banks have been struggling with rising loan impairments during a six-year recession, which has driven unemployment to almost 27 percent.

Record joblessness has made it hard for borrowers to service their debts, forcing lenders to make provisions for losses even though the pace of new bad debts is slowing.

Piraeus said provisions dropped to 481 million euros from 674 million in the last quarter of 2013 as new non-performing loans (NPLs) slowed for the fifth straight quarter.

The bank said NPLs - loans in arrears for more than 90 days - made up 37.9 percent of its loan book, up from 36.6 percent at the end of 2013.

Piraeus, which is 67.3 percent owned by the country’s bank bailout fund, said net interest income rose 1 percent quarter-on-quarter to 479 million euros, benefiting from the lower cost of term deposits.

The bank also said it will absorb its fully-owned unit Geniki Bank, acquired from Societe Generale in December 2012, into the group, abandoning plans to operate Geniki as an autonomous division that would have specialized in corporate problem loan restructuring. ($1 = 0.7345 Euros) (Reporting by George Georgiopoulos; Editing by Erica Billingham)

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