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ATHENS, March 12 (Reuters) – Eurobank, Greece’s third-largest lender, increased its net profit in 2019 following the easing of provisions for bad loans and said it would now focus on profitability.
Greek banks have struggled to shrink an estimated € 75 billion ($ 83 billion) stack of bad debt, a legacy of a financial crisis that has shrunk the country’s economy by a quarter.
Getting rid of these bad debts is crucial for the ability of the country’s banks to lend and consolidate their profits.
Eurobank, 2.4% owned by the country’s HFSF bank bailout fund, said on Thursday its net profit stood at € 127m for the full year, up 36.2% compared to 93 million euros in 2018.
The bank, which has applied to participate in Greece’s bad debt reduction program through a € 7.5 billion securitization, said profitability is now its top priority.
“Having faced the weight of the stock of NPEs (non-performing exposures), we are focusing all our efforts on strengthening our activity, financing solid projects, attracting new clients”, said the CEO of Eurobank , Fokion Karavias.
Provisions for credit losses fell 8.3% year on year to 624 million euros, while non-performing exposures (NPEs) fell to 29.2% of its loan portfolio from 31.1% at the end of September.
“Our NPEs, already by far the lowest in Greece, are expected to reach single digits in 2021 and decline further to 5% in 2022,” Karavias said.
Eurobank said it was targeting earnings per share of around 0.12 euros this year, up from 0.07 in 2019. Its shares plunged 17.3% on Thursday, amid heavy losses in the banking index of the Greek stock market, which lost 16.2%. ($ 1 = 0.9030 euros) (Reporting by George Georgiopoulos; Editing by Alexander Smith)