International agencies view the outlook of Piraeus Bank favorably after the formal verdict by the European Central Bank that leads to turning the Greek lender’s contingent convertible bonds (CoCos) into common shares, and despite the major drop in third-quarter profits announced.
On Monday Moody’s qualified the ECB decision as a credit positive, while Pau Labro, director of Financial Institutions at Fitch Ratings, told Kathimerini’s Eleftheria Kourtali on Tuesday that Piraeus’ credit profile is strengthened.
For its part, JP Morgan noted that the bank’s investment position is gradually improving and that it expected an 85% rally in the lender’s stock price by year-end.
Also on Monday, Piraeus, one of Greece’s four largest banks, reported a sharp drop in third-quarter profit compared with the previous quarter on the back of higher loan impairment provisions and weaker trading income.
The lender, which is 26.2% owned by the country’s HFSF bank rescue fund, reported a net profit from continued operations of 3 million euros, down from net earnings of €85 million in the second quarter.
Piraeus said loan impairment provisions rose 10% quarter-on-quarter to €175 million in July-to-September from €160 million in the second quarter.