One-off costs tip Eurobank into first-half loss
Eurobank’s sale of a majority stake in its FPS loan collection business and a bad loans securitization project tipped the Greek bank into a first-half loss after one-off costs on Tuesday.
Greek banks have been battling to cut back about 60 billion euros in bad loans, the legacy of a decade-long financial crisis that shrank the economy by a quarter.
Eurobank, which is 2.4% owned by Greece’s HFSF bank rescue fund, reported a net loss of €1.16 billion for the first half versus a net profit of €32 million in the same period last year.
In June, Greece’s third-largest bank agreed to sell 80% of FPS to doValue, along with a chunk of mezzanine and junior notes from a €7.5 billion bad loan securitization.
Eurobank said the transaction, dubbed Project Cairo, weighed on first-half results but helped it reduce its nonperforming exposures (NPEs) to 15.3% of its loan book at the end of June, from 32.8% in the first half of 2019.
Adjusted for the sale, Eurobank posted a net profit of €176 million in the first half, up from €97 million in the same period last year.
[Reuters]
