March 28, 2018 / 3:52 PM / a year ago

Greece's National Bank widens loss after higher impairment charges

ATHENS (Reuters) - Greece’s second largest lender National Bank (NBG) (NBGr.AT) widened its loss in the fourth quarter after booking higher provisions for impaired loans.

FILE PHOTO - The logo of National Bank is seen outside a branch in Athens March 23, 2015. REUTERS/Alkis Konstantinidis

NBG, 40 percent owned by the country’s bank rescue fund HFSF, reported on Wednesday a net loss from continued operations of 60 million euros ($74 million) versus a net loss of 44 million euros in the third quarter.

Greek banks, which face a new health check by the European Central Bank later this year, are still struggling with problem loan portfolios after a protracted recession pushed unemployment to record highs, making it hard for borrowers to service debts.

Entering the 2008 global financial crisis with bad loans, or non-performing exposures (NPEs), of 14.5 billion euros - about 5.5 percent of their loan books - banks saw bad debts climb to more than 100 billion euros, or 51 percent.

They have agreed with regulators to cut the level to 66.7 billion euros by 2019, bringing the NPE ratio down to 34 percent.

“NBG has managed to maintain a solid pace of NPE reduction throughout the last two years, reducing its stock by about 4.2 billion euros since the end of 2015, covering half the distance to the 2019 target,” NBG CEO Leonidas Fragiadakis said.

NBG’s loan impairments rose 29 percent to 200 million euros quarter-on-quarter while its ratio of non-performing exposures - which include loans past due for more than 90 days plus other credit likely to turn bad - dropped to 44 percent from 44.9 percent in December 2016.

Peer Piraeus Bank (BOPr.AT) turned profitable in October-to-December despite sharply higher loan-loss provisions, also improving its ratio of non-performing loans.

Piraeus, which is 26.2 percent owned by the HFSF, reported a net profit from continued operations of 12 million euros after a net loss of 17 million euros in the third quarter.

The bank accelerated its balance sheet cleanup, increasing provisions for impaired loans to 1.18 billion euros in the fourth quarter from 312 million in the previous three-month period.

Non-performing loans eased to 35 percent of its book at the end of December from 36.2 percent in the previous quarter.

Reporting by George Georgiopoulos and Lefteris Papadimas; editing by David Stamp

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