Piraeus Bank profitable in Q2, ups guidance as loan book expands

By George Georgiopoulos

ATHENS (Reuters) - Piraeus Bank on Wednesday reported lower net earnings in April-to-June compared to the first quarter on comparatively lower trading income, but raised its guidance for the full year as new loan disbursements topped targets.

Greece's fourth-largest lender by market value reported net earnings from continued operations of 92 million euros ($94 million) after a profit of 521 million euros in the first quarter.

Trading income in the first quarter had been boosted by one-off gains booked in its sovereign bond portfolio and other transactions.

Loan impairment provisions fell 23% quarter-on-quarter to 117 million euros, with Piraeus reducing its ratio of so-called non-performing exposures (NPEs) to 9% from 13% in December 2021.

The group's portfolio of performing loans expanded by 1.5 billion euros during the first half, exceeding its target for the full year, while record fee income was generated, Chief Executive Christos Megalou said.

"We are upgrading guidance on key financial aspirations for 2022. We now aim for an 8% NPE ratio, more than 2 billion euros of performing loan growth, 11% fully-loaded core equity Tier 1 ratio and earnings per share of 0.35 euros," Megalou said.

The targets had been 9%, 1.2 billion euros, 10% and 0.05 euros, respectively.

Excluding forgone income from NPEs, net interest income grew 3% year-on-year to 512 million in the first half, supported by the performing loan book expansion and higher yields in its fixed income portfolio.

Piraeus Bank's four-year business plan to 2025 aims to shrink non-performing exposures to 3.0% by that date and potentially start paying out dividends from 2024.

The bank also aims for about 7.0 billion euros of new loan disbursements to reach a loan book of 35 billion euros of performing credit by the end of the period.

($1 = 0.9837 euros)

(Reporting by George Georgiopoulos; Editing by Mark Potter)