Greece's Piraeus Bank posts 9-mth loss on provisions - The Best from Greece

Posted on: 30/Nov/2011

9-month loss 287 mln euros as bad debt provisions jump

* Bond swap impact seen in full year if terms agreed by then

Nov 30 (Reuters) - Piraeus Bank, Greece's fourth-largest lender, on Wednesday reported a nine-month loss of 287 million euros ($382 million) on higher bad debt provisions, excluding the impact from a planned writedown on Greek government bonds.

Greek banks are expected to have to recapitalise after writedowns resulting from a bond swap agreed in October, which calls for a 50 percent nominal writedown on Greek government debt.

Terms of the bond swap, known as private sector involvement (PSI+), have yet to be finalised.

Piraeus Bank said the final impact of the PSI+ plan would be calculated and reflected in its annual results if the specific terms -- coupon rate, maturity, guarantees, face value reduction -- are finalised before the publication date of its financial statements.

PSI+ replaces an earlier deal agreed in July, which called for a smaller 21 percent net present value loss on the bonds.

Including the impact from the smaller haircut, estimated at 865 million euros, the bank said its nine-month net loss would be 1.153 billion euros.

Greek banks are trying to cope with rising credit impairments and a shrinking deposit base as the austerity-hit country struggles through its fourth straight year of economic contraction, seen topping 5.5 percent this year.

Loan-loss provisions in the nine-month period jumped 126 percent year-on-year to 909 million euros as non-performing loans increased in the third quarter, meaning the ratio of loans in arrears more than 90 days hit 11.7 percent at end-September from 9.5 percent in June.

Piraeus said its net interest income rose 4 percent year-on-year to 916 million euros with its cost-to-income ratio improving to 48 from 56 percent in the same period a year earlier. (Reporting by George Georgiopoulos; Editing by Erica Billingham)

source: http://www.reuters.com/article/2011/11/30/piraeusbank-idUSL5E7MU09120111130?rpc=401&feedType=RSS&feedName=rbssFinancialServicesAndRealEstateNews&rpc=401

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