Greek lender reports loss, hit by provisions

ATHENS - Reuters

Greece’s Piraeus Bank is preparing to start acquisition talks with possible buyers for its Egypt unit. REUTERS photo

Piraeus Bank posted a nine-month loss after a jump in bad debt provisions and Greece’s fourth-largest lender said it still planned to sell its Egyptian operations even though Standard Chartered has pulled out of talks on a deal.
The bank will begin discussions with other potential buyers for its Piraeus Bank Egypt following Standard Chartered’s decision not to proceed.
“We intend to initiate discussions (with potential buyers) via a competitive process,” Managing Director Alex Manos told analysts in a conference call following the results announcement.
Piraeus reported a nine-month loss of 287 million euros ($382 million), excluding the impact from a planned writedown on Greek government bonds.
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.
Greek banks are expected to have to recapitalize after writedowns resulting from a bond swap agreed in October, which calls for a 50 percent nominal writedown on Greek government debt.
“Piraeus Bank will do everything in its power to minimise the official support it will receive,” Manos said.
Terms of the bond swap, known as private sector involvement (PSI+), have yet to be finalized.
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 finalized before the publication date of its financial statements.