ATHENS (Reuters) - Greece’s largest lender by assets, Piraeus Bank (BOPr.AT), reported a rise in first-quarter net profit, excluding one-off items, thanks to lower loan-loss provisions.
Piraeus, which is 26.2 percent owned by Greece’s bank rescue fund HFSF, reported a net profit from continued operations of 18 million euros (16 million pounds), excluding one-off items.
The bank flagged a sum of 21 million euros from the sale of EFSF bonds to the central bank as a one-off item in the first quarter. This, coupled with 138 million euros of staff costs related to a voluntary exit scheme, led to a loss of 80 million euros.
Piraeus reported net earnings of 12 million euros in the fourth quarter of 2017.
Piraeus and other Greek banks recently underwent a health check by the European Central Bank before the country exits its bailout in August. The stress test results, released last week, showed no need for new capital.
“The outcome of the 2018 stress test signals the end of a long period of uncertainty for Greece’s banking sector,” Piraeus CEO Christos Megalou said in a statement. “The results confirmed that the market environment in Greece is tangibly improving.”
Megalou said the bank’s financial standing would be further strengthened by the plan that management is already executing, which includes the sale of bad loan portfolios and divesting non-core assets.
The bank said bad debt provisions fell to 164 million euros in January to March, from 1.18 billion euros in the fourth quarter.
Greek banks have been under regulatory pressure to tackle their bad debt problem, which restricts their ability to expand credit and help the economy recover. So-called non-performing exposures (NPEs) are the biggest challenge facing the sector.
Piraeus said its stock of NPEs decreased for the 10th straight quarter to 32.2 billion euros.
Funding from the Greek central bank dropped to 2.1 billion euros, from 11 billion in the same quarter a year earlier.
Reporting by George Georgiopoulos and Lefteris Papadimas; Editing by Susan Fenton