Piraeus Bank, Greece's fourth-largest lender, on Wednesday reported a nine-month loss of 287 million euros ($382 million) on higher bad debt provisions, excluding the impact from a planned writedown on Greek government bonds. Greek banks are expected to have to recapitalise after writedowns resulting from a bond swap agreed in October, which calls for a 50 percent nominal writedown on Greek government debt.
Terms of the bond swap, known as private sector involvement (PSI+), have yet to be finalised. Piraeus Bank said the final impact of the PSI+ plan would be calculated and reflected in its annual results if the specific terms - coupon rate, maturity, guarantees, face value reduction - are finalised before the publication date of its financial statements.
PSI+ replaces an earlier deal agreed in July, which called for a smaller 21 percent net present value loss on the bonds Including the impact from the smaller haircut, estimated at 865 million euros, the bank said its nine-month net loss would be 1.153 billion euros. Greek banks are trying to cope with rising credit impairments and a shrinking deposit base as the austerity-hit country struggles through its fourth straight year of economic contraction, seen topping 5.5 percent this year.