ATHENS (Reuters) - Greece’s third-largest lender Eurobank on Thursday reported lower full-year 2018 net profit as operating income declined, but said it was on track to deliver on a plan to transform its business by year-end.
Eurobank, which is 2.4 percent owned by the country’s HFSF bank rescue fund, reported net earnings of 91 million euros (78.2 million pounds) from continued operations, compared to a profit of 104 million euros in 2017.
Accounting for discontinued operations, the bank reported a net profit of 200 million euros compared to net earnings of 185 million euros a year earlier.
“Eurobank’s results for 2018 provide a solid basis for the timely and successful execution of the milestone transformation plan we have announced to restore all key metrics to levels comparable to our European peers,” chief executive Fokion Karavias said in a statement.
The bank aims to complete a 2 billion euro mortgage securitisation and to receive binding offers for a majority stake in loan service provider FPS by mid-year, he said.
“Based on our results and the current execution pace, we remain confident that we can deliver on the full plan on schedule, by the end of the year,” he said.
Sour loans remain the biggest challenge facing Greek banks, the legacy of a multi-year debt crisis that shrank Greece’s economy by a quarter and drove unemployment close to a record high of 28 percent in 2013.
Eurobank’s credit-loss provisions fell 9.3 percent to 680 million euros last year from 750 million in 2017.
Non-performing exposures (NPEs) dropped to 37 percent of its loan book in the last quarter of 2018 from 39 percent at the end of September.
The bank’s total operating income fell 1.9 percent year-on-year as net interest income declined 3.3 percent. But net fee and commission income grew 16.4 percent.
Eurobank said its takeover of real estate firm Grivalia Properties will bring its NPE ratio down to 16 percent this year and to single digits by 2021.
Eurobank agreed in November a 780 million euro deal to buy Grivalia, in a move to boost its capital and speed up the reduction of sour loans.
Reporting by George Georgiopoulos; Editing by Jan Harvey