Piraeus Bank Profitable in Second Quarter

euro money(Greece) – Piraeus Bank, which is Greece’s largest lender, announced that it had a profitable second quarter. One of the factors that led to it being profitable was the fact that they had lower provisions for troubled loans. Alpha Bank, Piraeus Bank’s rival, showed a loss on its bad credit loans. The HFSF, Greece’s rescue fund, owns 26.2% of the bank thanks to a recapitlization effort from last year in 2015. The bank showed a net profit of 20 million  euros. In the first quarter of 2016, the bank had a net loss of 37 million euros.

Alpha Bank, on the other hand, showed losses because of the impaired loans that the bank is burdened by, such as Marinopoulos, which filed for bankruptcy and is now being purchased by a rival supermarket chain. HFSF owns 11 per cent of Alpha Bank after its capitalization. Alpha posted a loss of 16.8 million euros in the second quarter after a loss of 2.2 million euros in the first quarter of 2016. Alpha’s nonperforming credit increased from 37.4 per cent at the end of March to 37.8 per cent at the end of June. Its bad debt provisions increased by 37 per cent quarter-on-quarter to 349.7 million euros.

Most banks in Greece have been hit by the economic crisis for various reasons. Bad loan portfolios cut significantly into its profits because thanks to the recession, those who have these loans are finding it very difficult to pay them back. Also because of the recessions, unemployment has increased and has been set at record highs, which means that overall, people have even less money to pay back their loans. In the banking sector as a whole, about 40% of all loans are nonperforming. If the stock of bad loans were to be reduced, this would help the banks log better profits. Greece has been in a recession since before the first bailout that took place in 2010.

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