Two of the biggest Greek banks posted first-quarter losses Wednesday owing to weaker earnings and higher provisions to cope with a long recession that has also forced them to find new capital. National Bank of Greece (NBG) reported a net loss of 537 million euros ($666 million) "due to the marked negative impact of trading income in Greece and the 47 percent increase, on an annual basis, in the group's provisions."
The country's fourth-biggest bank Piraeus Bank posted a loss of 80 million euros before tax in the same period, also citing big provisions it was forced to set aside against potential financial shocks from Greece's debt crisis. In March, Greek banks participated in a landmark debt restructuring, part of a broader international bailout agreement involving the EU's Financial Stability Fund (EFSF) that aimed to rescue the economy from collapse.
The restructuring cut Greece's sovereign debt by 107 billion euros, inflicting heavy losses on private lenders such as NBG and other banks that are now in turn receiving EFSF funds to recapitalise them. The four biggest Greek banks received a first share of 18 billion euros of this aid on Monday. NBG received 7.43 billion euros, Piraeus Bank 4.7 billion, Eurobank 3.97 billion and Alpha 1.9 billion, said an official of the Hellenic financial stability fund, the Greek body charged with distributing the loans.