Greek lenders Eurobank and NBG boosted by higher rates and lower bad loans

ATHENS, Nov 10 (Reuters) – Eurobank (EURBr.AT) and National Bank (NBGr.AT), Greece’s two largest lenders by market value, were profitable in the first nine months of 2022, higher interest rates boosted net interest income.

Eurobank, Greece’s largest lender by market value, posted higher net profit in the nine months of 2022 compared to the same period a year earlier, boosted by net interest, fee and higher commissions.

The bank reported net profit of 1.106 billion euros ($1.12 billion), compared with 216 million in the first nine months of 2021. Net profit included gains of 231 million euros from the spin-off of its merchant acquiring activity.

“In a context of economic and geopolitical uncertainties, the Greek economy remains a positive outlier, with a growth rate now estimated at 6% for the year,” Eurobank chief executive Fokion Karavias said.

He said the bank’s performance was beating expectations across the board, with the international business a “steady contributor”, boosting profit by almost 40%.

An improving economy and falling problem loans prompted ratings agency Moody’s to upgrade Greek banks earlier this week.

Eurobank increased its net interest income by 8.1% year-on-year in the nine months to 1.1 billion euros, driven by bond income, loans and its international activities.

Net commission income increased by 21.1% to 395 million euros, mainly from credit activities, network operations and its card business.

The bank’s non-performing loan (NPE) exposure ratio fell to 5.6% at the end of September, with the stock of bad loans shrinking to 2.4 billion euros.

Peer National Bank (NBG), Greece’s second-largest market value, reported lower net profit in the first nine months of 2022 compared to the same period a year earlier due to lower trading revenue.

NBG, 40% owned by the country’s HFSF bank rescue fund, said net profit from continuing operations reached 652 million euros ($661 million) from 732 million euros in the first nine months. of 2021.

CEO Paul Mylonas said tourism was helping to drive economic growth and revenues were on track to hit a new all-time high, while private sector profitability was also helping to cushion the inflation-induced blow to the economy. real economy.

Amid tougher European Central Bank policies, including tighter Targeted Longer-Term Refinancing Operations (TLTROs), NBG’s strong and stable core deposit base and excess liquidity “become an advantage strong comparison,” he said.

NBG’s NPE was down around 20 basis points quarter-on-quarter to 5.9% at end-September, already below its 2022 target of around 6%.

($1 = 0.9839 euros)

Reporting by George Georgiopoulos; Editing by Elaine Hardcastle

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