Rock bottom: losses and mergers along with Cyprus crisis $0.88
Eurobank 2012 Impairment Losses EUR1.65 Billion, Up 24.6%
Last update: 3/27/2013 11:15:03 AM
By Stelios Bouras
ATHENS--Three of Greece's largest lenders Wednesday reported combined losses of more than 4.5 billion euros for 2012, hurt by rising loan provisions and higher funding costs amidst the country's deep recession.
National Bank of Greece (NBG) said net group losses for the year reached EUR2.14 billion, versus a loss of EUR12.3 billion in the previous year when it wrote off the impact Greece's mammoth EUR200 billion debt restructuring. Eurobank (EUROB.AT) showed a net loss of EUR1.45 billion in 2012, down from a EUR5.5 billion loss in 2011. Alpha Bank (ALPHA.AT) was also in the red by EUR1.09 billion for 2012, in comparison with a EUR3.8 billion loss in the previous year.
NBG Chief Executive Officer Alexandros Tourkolias said the 2012 results reflect "the difficult economic conditions in Greece and the intense pressure under which the banking system suffers," adding that there were indications of improvement in the last few months of the year.
"Already in the fourth quarter of 2012 we saw the first signs of normalization of conditions in Greece, with the return of part of the deposits that were lost during the course of the two rounds of national elections, a slowdown in the growth of new loan delinquencies, and the bottoming out of income from core banking business," he said in a statement.
In a bid to become more efficient and attractive to potential investors, the sector has been consolidating at a fast pace. National Bank is teaming up with Eurobank, while Alpha Bank has acquired the Greek unit of French lenders Credit Agricole SA and Piraeus Bank SA is acquiring the local unit of Societe Generale SA and the healthy assets of state-owned farm lender ATEBank.
On Tuesday, Piraeus Bank agreed to buy the Greek branch network and operations of three Cypriot lenders for a total cash consideration of EUR524 million as part of a bailout agreement for the crisis-hit island.
As part of Greece's second EUR173 billion bailout package from international creditors, Athens has earmarked about EUR50 billion for a bank recapitalization plan.
Under the terms of the plan, Greece's bank-rescue mechanism, the Hellenic Financial Stability Fund, will underwrite coming rights issues and effectively take control of the four big banks, which combined account for three-quarters of the banking system's assets
Alpha Bank said it is confident about the outcome of the rights issue, expecting in 2013 lower funding costs, further operating efficiencies and a lower cost of credit that will have a positive impact on its profitability.
"With tangible shareholders' equity in excess of EUR2 billion, ahead of any recapitalisation, Alpha Bank will comfortably meet the private sector test and thus retain firmly its private sector character," said Alpha Bank CEO Demetrios Mantzounis.
Write to Stelios Bouras at stelios.bouras@dowjones.com; Philip Pangalos at philip.panagalos@dowjones.com
