August 31, 2018 / 2:59 PM / a year ago

Greek bank NBG swings to loss in second quarter on early retirement costs

ATHENS (Reuters) - Greece’s second-largest lender National Bank (NBG) (NBGr.AT) swung to a loss in the second quarter despite lower provisions for impaired loans as the cost of a voluntary retirement scheme weighed on its bottom line.

NBG, 40 percent owned by the country’s bank rescue fund HFSF, reported on Friday a 15 million euro (13.45 million pounds) net loss from continued operations, versus a 34 million euro net profit in the first quarter of the year.

Peer Piraeus Bank (BOPr.AT), Greece’s biggest lender, was profitable in April-to-June, helped by lower loan-loss provisions.

Piraeus, which is 26.2 percent owned by the HFSF fund, reported a net profit from continued operations of 24 million euros, recovering from a 79 million euro loss in the first quarter, including a voluntary exit scheme cost.

Greek banks remain focussed on reducing their bad debt portfolios and meeting targets agreed with regulators.

“Regarding asset quality, NPE (non-performing exposure) reduction continued for a ninth consecutive quarter, with the outperformance versus the SSM target reaching about 1.3 billion euros,” NBG Chief Executive Paul Mylonas said in a statement, referring to the European Central Bank’s supervisory arm, the Single Supervisory Mechanism.

NBG’s loan impairments fell 69 percent quarter-on-quarter to 38 million euros with its ratio of non-performing exposures, which include non-performing loans (NPLs) and other credit likely to turn bad, edging lower to 42.1 percent from 42.7 percent in March.

Piraeus’s financial position continued to improve in the second quarter as it gradually restores profitability, its CEO said.

“ELA (emergency liquidity assistance) funding was reduced materially during the second quarter and has been eliminated since mid-July despite the recent lifting of the ECB waiver for Greek state bonds,” Piraeus’s Chief Executive Christos Megalou said.

Piraeus said provisions for sour loans fell 8.8 percent quarter-on-quarter to 149 million euros from 163 million in the first quarter.

Its stock of NPEs was reduced to 29.4 billion euros at the end of the second quarter, from 32.9 billion last December.

Reporting by George Georgiopoulos; Editing by Susan Fenton

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