Greek lenders Alpha Bank and National Bank reported a sharp fall in profit in the last quarter of 2018 as they focused on reducing their piles of bad loans.

Alpha, Greece’s fourth-largest lender by assets, reported a net loss from continuing operations of €0.4 million in the October to December period after a net profit of €41.1 million in the third quarter. The lender, which is 11% owned by the country’s bank rescue fund HFSF, attributed the loss to weaker trading gains and higher credit-loss provisions.

Net profit from continued operations at National Bank (NBG), the country’s second largest lender, shrank to €1 million from €8 million in the third quarter as trading losses weighed on its bottom line.

Greek banks are working to reduce their bad debts and meet targets on so-called nonperforming exposures (NPEs) agreed with European Central Bank regulators.

Alpha CEO Vassilis Psaltis said in a statement that reducing NPEs – which include nonperforming loans (NPL) and other credit likely to turn bad – and delivering competitive services were the bank’s priority.

The bank goal is to reduce its NPEs by €14.3 billion by 2021, he said. In the meanwhile, Alpha bank’s NPL ratio dropped to 33.5% of its loan book from 34.1% at the end of September, while provisions for impaired credit rose to €669 million from €296 million in the third quarter.

As for NBG’s, the NPE ratio fell to 40.9% from 42.2% in the third quarter and the lender aims to squeeze it to below 15% by 2021. CEO Paul Mylonas said in a statement that would mean an €11.5 billion reduction by the end of 2021, with €4.5 billion of that coming this year. He also described the new strategy for managing bad loans as front-loaded and more ambitions.

Original Story:Ekathimerini | Reuters
Photo: Alpha Bank
Edition:Prime Yield