ECONOMY

Emporiki losses get bigger; conditions get tougher

Emporiki Bank, the Greek unit of France’s Credit Agricole, said its net loss widened in the first quarter as loan losses increased, in operating conditions that are becoming more difficult. Kicking off the reporting season for Greek banks, Emporiki said first quarter losses widened 24.1 percent year-on-year to 209.3 million euros on higher provisions. The lender said its cost of risk rose 44 percent compared with the first quarter last year, reaching 249.4 million euros. Compared with the last quarter of 2009 provisions were up by 111 million euros. «Emporiki increased its provisions relating to its old loan portfolio, taking into consideration the tough economic forecast for the entire fiscal year,» the bank said in a statement. Austerity measures to secure emergency EU/IMF funding will keep the Greek economy in recession this year with authorities expecting GDP to contract by 4 percent. Emporiki said group net interest income was flat quarter-on-quarter but grew 35.1 percent year-on-year. The bank’s loan portfolio was broadly stable at 22.7 billion euros compared with the last quarter of 2009, with parent Credit Agricole supplying increased liquidity. Deposits declined 9 percent quarter-on-quarter to 13.5 billion with the bank refraining from intense competition to attract time deposits, it said. Credit Agricole and Societe Generale, which controls Geniki Bank, may be among European lenders with the most at risk from the Greek crisis because of their unprofitable divisions in the country. Banks in Greece face worsening asset quality, pressure on profitability, negative lending growth and rising loan losses as the economy contracts and the state tries to curb its budget deficit.