ATHENS: Greek lender National Bank (NBG) turned profitable in the third quarter, helped by lower trading losses and reduced bad-debt provisions. National Bank, 40 percent owned by the country's bank rescue fund HFSF after its recapitalisation late last year, reported net profit of 23 million euros ($24.2 million), excluding assets held for sale and discontinued operations, versus a loss of 23 million euros in the second quarter.
CEO Leonidas Fragiadakis said that a combination of write-offs, collection efforts and success in fixing some bad loans - through restructuring, lowering instalments and pushing out maturities - helped to reduce non-performing exposures by 2 billion euros since January.
Greek banks still carry large problem loan portfolios after a protracted recession pushed unemployment to record highs, making it hard for borrowers to service their debts.
Banks have about 109 billion euros of non-performing exposures (NPEs), which at 45 percent of their loan books is the second highest ratio in Europe after Cyprus. They face ambitious targets to cut the overhang by 40 percent by 2019.
They are also grappling with funding gaps after deposit flight last year that led to capital controls in June 2015 and still depend on central bank funding to plug the hole.
On Tuesday ratings agency Moody's upgraded its outlook on Greek banks to stable from negative citing profitability and funding improvements.
The agency sees banks returning to marginal profitability this and next year on the back of significantly lower loan-loss provisions.
NBG, with a current market value of 2.07 billion euros, said non-performing credit rose to 34.1 percent of its loan book in the third quarter from 33.3 percent at the end of June. Loan impairments fell to 162 million euros from 188 million in the previous quarter.
The group said it reduced funding from the Bank of Greece by 13.1 billion euros since the imposition of capital controls to 4.5 billion in November - the lowest in the sector.
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