ATHENS (Reuters) - Eurobank (EURBr.AT) and National Bank (NBG) (NBGr.AT), two of Greece’s largest lenders, on Thursday reported higher third-quarter profits showing the benefits of clearing bad loans from their balance sheets.
Eurobank, Greece’s third largest bank, reported net earnings of 56 million euros (£48 million) from continued operations, compared with a profit of 6.0 million euros in the second quarter, helped by lower bad debt provisions.
NBG, 40% owned by the country’s bank rescue fund HFSF, said net profit from continued operations rose to 171 million euros ($189.26 million) from a profit 122 million euros in the second quarter, helped by stronger trading gains.
Banks in Greece have been working to reduce a pile of about 75 billion euros in bad loans, the legacy of a decade-long financial crisis that shrank the country’s economy by a quarter.
“Eurobank remains on a path of sustained profitability. In Greece, our main market, consumer confidence is strengthening, real estate prices are rising,” CEO Fokion Karavias said in a statement.
Eurobank’s bad debt provisions fell 21% quarter-on-quarter to 145 million euros, with its so-called non-performing exposures (NPE) dropping to 31.1% of its loan book from 32.8% at the end of June.
“We have accelerated the NPE clean-up process through a third major sale, bringing the NPE reduction year-to-date to 4 billion euros, which is close to the fiscal year 2019 SSM (Single Supervisory Mechanism) target,” NBG CEO Paul Mylonas said, referring to the European Central Bank’s banking supervisor.
NBG’s NPE ratio, which includes non-performing loans and other credit likely to turn bad, fell to 34.2% from 36.5% percent in June.
Reporting by George Georgiopoulos. Editing by Jane Merriman