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Report: Chairman says Piraeus Bank to return to profit in 2016

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Report: Chairman says Piraeus Bank to return to profit in 2016

ChairmanMichalis Sallas said the lender will return to profit in 2016, on the back of areduction in costs and declining nonperforming loan provisions, Reutersreported April 6.

"Theeasing in nonperforming loans in the last quarter of 2015 is continuing in thefirst quarter," leading to lower provisions, Sallas reportedly said. Thegroup's NPL ratio dropped to 39.5% as of Dec. 31, 2015, compared to 40.5%at the end of September 2015. The coverage ratio increased to 65.0% in December2015 from 60.6% three months ago.

Theexecutive is hopeful that the bank will lower its NPL ratio to less than 17% by2018. NPL stock is expected to fall by €1 billion in 2016 as strategicdefaulters start to pay up, Sallas added. Also, Piraeus Bank is "taking adeeper look at resizing," including its presence abroad and its noncorebusinesses. The lender will divest its activities in Cyprus by mid-summer toshrink its foreign operations, Sallas said.

Sallasnoted that the bank is set to conclude its hunt for a new in the next few weeks, Reutersreported.

Separately,Sallas warned that total removal of capital restrictions and a significantreturn of deposits to Greek lenders will take time, the newswire noted. Sallassaid he does not perceive a further drop in prices in the domestic real estatemarket, adding that the completion of the Greek bailout review is "crucialand will lead to an improvement."