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Piraeus Bank Resorts To Special Liquidity Fund
Piraeus Bank, confirmed Wednesday that it had borrowed money from a special liquidity fund, ELA, established by the country΄s central bank, according to Dow Jones Newswires.
"We have accessed the ELA," Piraeus Bank Managing Director Alex Manos told analysts in a conference call.
The ELA is a special facility provided by national central banks that isn΄t backed by the ECB, but must have ECB approval, while the cost of using the ELA is higher than the cost of borrowing from the ECB.
Losses of €820 mn due to PSI
Piraeus Bank reported pre tax result was -€1,004 mn in H1’11 post PSI, while after tax attributable to shareholders amounted to -€820 mn.
According to an announcement, the bank’s planned initiatives that have already been announced, i.e. the expected sale of the subsidiary bank in Egypt and the issue of a convertible bond of €250 mn will maintain Core Tier I and the Group’s total capital adequacy ratio at the level of 10% and 11% respectively.
Michalis Sallas, Chairman of the Bank, commented:
“Developments over the past weeks have created a more positive environment in Greece. Importantly, the anticipated implementation of July’s EU resolutions should lead to more sustainable public debt and stabilisation of Greece’s fiscal balance. This, combined with further strengthening of the banking sector through consolidation and foreign investment, we believe will drive the Greek economy into a new period.”
Stavros Lekkakos, CEO, said:
“The Group’s organic profitability improved in H1’11, despite the unfavorable market conditions. The pre tax and provision profit amounted to €372 mn compared to €312 mn in H1’10 increased by 19%. This was mainly contributed by the increase in net interest income by 6% at €628 mn and the reduction of operating costs by 4% y-o-y at €403 mn (-5% in Greece). The Group’s steadily increasing organic profitability enables the Group to maintain its capital adequacy ratios at a satisfactory level and to further strengthen its balance sheet.”
Piraeus Bank’s Participation in PSI
The implementation of the resolutions of the European Summit which took place on 21.07.11 is combined among other things, with the successful outcome of the Private Sector Involvement-PSI programme for the refinancing of Greece’s debt. In relation to this PSI programme, Piraeus Bank has recognised an impairment charge, the exact amount of which will be finalised upon the completion of the programme. This impairment charge, which represents an accounting and not an actual loss, had a €0.8 bn after tax impact on the Bank’s results for Q2’11.
With Piraeus Bank’s participation in the PSI programme, almost all the current Greek Government Bond (GGB) portfolio will be exchanged with new bonds guaranteed in terms of their principal with AAA class rated securities. Upon the implementation of the PSI programme, the Group will hold GGBs of €62 mn total value. Furthermore, based on the expected yield of the new bonds, net interest income will be strengthened by at least €50 mn annually in the following 30-year period.
With regards to the impact in the Group’s equity, the planned initiatives that have already been announced, i.e. the expected sale of the subsidiary bank in Egypt and the issue of a convertible bond of €250 mn will maintain Core Tier I and the Group’s total capital adequacy ratio at the level of 10% and 11% respectively.
H1 2011 Financial Results
Net interest income (NII) amounted to €628 mn, +6% y-o-y. In Q2’11 NII was €319 mn which was the best quarter for the Group historically.
Net commission income amounted to €100 mn at the same level as H1’10, while commercial banking commissions amounted to €87 mn increased by 5% y-o-y.
Net revenues increased by 7% y-o-y and amounted to €781 mn.
Operating costs decreased by 4% y-o-y at €403 mn with operating expenses decreased both in Greece by 5% and abroad by 2%.
Group’s personnel expenses decreased by 3% y-o-y at €195 mn, and -4% y-o-y in Greece. General administrative expenses were reduced by 7% y-o-y at €159 mn and -9% y-o-y in Greece.
Pre tax and provision profit amounted to €372 mn increased by 19% y-o-y, which enables the Group to both cover current high loan provisions and ensure its capital adequacy ratios.
Provisions amounted to €371 mn increased by 38% y-o-y corresponding to 192 bps on average loans (137 bps in H1’10), as a result of the deteriorating economic environment especially in Greece (estimated GDP in H1’11: -7.5% y-o-y).
Pre tax result was -€1,004 mn in H1’11 post PSI, while after tax attributable to shareholders amounted to -€820 mn.
Volumes as of June 30th 2011
Net loans amounted to €36.7 bn, down 3% y-t-d.
Deposits reached €26.4 bn decreased by 12% y-t-d as the outflow trend of deposits continued in Greece (Piraeus Bank and Greek market deposits: -10% in H1’11 excluding deposits of the Greek government)
Loans in arrears above 90 days (IFRS 7) stood at 9.6% in H1’11. The provision coverage ratio stood at 46.4%. The coverage ratio was 110%, when tangible collaterals are taken into account.
The Group’s total equity stood at €3.3 bn incorporating the impact from the participation in the PSI. Regulatory capital amounted to €3.5 bn.
The capital adequacy stood at 9.5%, Tier I at 8.6% while Core Tier I at 8.2% (including preference shares of the Greek state).
(capital.gr)
Piraeus Bank, confirmed Wednesday that it had borrowed money from a special liquidity fund, ELA, established by the country΄s central bank, according to Dow Jones Newswires.
"We have accessed the ELA," Piraeus Bank Managing Director Alex Manos told analysts in a conference call.
The ELA is a special facility provided by national central banks that isn΄t backed by the ECB, but must have ECB approval, while the cost of using the ELA is higher than the cost of borrowing from the ECB.
Losses of €820 mn due to PSI
Piraeus Bank reported pre tax result was -€1,004 mn in H1’11 post PSI, while after tax attributable to shareholders amounted to -€820 mn.
According to an announcement, the bank’s planned initiatives that have already been announced, i.e. the expected sale of the subsidiary bank in Egypt and the issue of a convertible bond of €250 mn will maintain Core Tier I and the Group’s total capital adequacy ratio at the level of 10% and 11% respectively.
Michalis Sallas, Chairman of the Bank, commented:
“Developments over the past weeks have created a more positive environment in Greece. Importantly, the anticipated implementation of July’s EU resolutions should lead to more sustainable public debt and stabilisation of Greece’s fiscal balance. This, combined with further strengthening of the banking sector through consolidation and foreign investment, we believe will drive the Greek economy into a new period.”
Stavros Lekkakos, CEO, said:
“The Group’s organic profitability improved in H1’11, despite the unfavorable market conditions. The pre tax and provision profit amounted to €372 mn compared to €312 mn in H1’10 increased by 19%. This was mainly contributed by the increase in net interest income by 6% at €628 mn and the reduction of operating costs by 4% y-o-y at €403 mn (-5% in Greece). The Group’s steadily increasing organic profitability enables the Group to maintain its capital adequacy ratios at a satisfactory level and to further strengthen its balance sheet.”
Piraeus Bank’s Participation in PSI
The implementation of the resolutions of the European Summit which took place on 21.07.11 is combined among other things, with the successful outcome of the Private Sector Involvement-PSI programme for the refinancing of Greece’s debt. In relation to this PSI programme, Piraeus Bank has recognised an impairment charge, the exact amount of which will be finalised upon the completion of the programme. This impairment charge, which represents an accounting and not an actual loss, had a €0.8 bn after tax impact on the Bank’s results for Q2’11.
With Piraeus Bank’s participation in the PSI programme, almost all the current Greek Government Bond (GGB) portfolio will be exchanged with new bonds guaranteed in terms of their principal with AAA class rated securities. Upon the implementation of the PSI programme, the Group will hold GGBs of €62 mn total value. Furthermore, based on the expected yield of the new bonds, net interest income will be strengthened by at least €50 mn annually in the following 30-year period.
With regards to the impact in the Group’s equity, the planned initiatives that have already been announced, i.e. the expected sale of the subsidiary bank in Egypt and the issue of a convertible bond of €250 mn will maintain Core Tier I and the Group’s total capital adequacy ratio at the level of 10% and 11% respectively.
H1 2011 Financial Results
Net interest income (NII) amounted to €628 mn, +6% y-o-y. In Q2’11 NII was €319 mn which was the best quarter for the Group historically.
Net commission income amounted to €100 mn at the same level as H1’10, while commercial banking commissions amounted to €87 mn increased by 5% y-o-y.
Net revenues increased by 7% y-o-y and amounted to €781 mn.
Operating costs decreased by 4% y-o-y at €403 mn with operating expenses decreased both in Greece by 5% and abroad by 2%.
Group’s personnel expenses decreased by 3% y-o-y at €195 mn, and -4% y-o-y in Greece. General administrative expenses were reduced by 7% y-o-y at €159 mn and -9% y-o-y in Greece.
Pre tax and provision profit amounted to €372 mn increased by 19% y-o-y, which enables the Group to both cover current high loan provisions and ensure its capital adequacy ratios.
Provisions amounted to €371 mn increased by 38% y-o-y corresponding to 192 bps on average loans (137 bps in H1’10), as a result of the deteriorating economic environment especially in Greece (estimated GDP in H1’11: -7.5% y-o-y).
Pre tax result was -€1,004 mn in H1’11 post PSI, while after tax attributable to shareholders amounted to -€820 mn.
Volumes as of June 30th 2011
Net loans amounted to €36.7 bn, down 3% y-t-d.
Deposits reached €26.4 bn decreased by 12% y-t-d as the outflow trend of deposits continued in Greece (Piraeus Bank and Greek market deposits: -10% in H1’11 excluding deposits of the Greek government)
Loans in arrears above 90 days (IFRS 7) stood at 9.6% in H1’11. The provision coverage ratio stood at 46.4%. The coverage ratio was 110%, when tangible collaterals are taken into account.
The Group’s total equity stood at €3.3 bn incorporating the impact from the participation in the PSI. Regulatory capital amounted to €3.5 bn.
The capital adequacy stood at 9.5%, Tier I at 8.6% while Core Tier I at 8.2% (including preference shares of the Greek state).
(capital.gr)
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