Greece’s Eurobank Takes EUR664 Million Hit From Bonds

 
   By Stelios Bouras 
   Of DOW JONES NEWSWIRES 
 

ATHENS (Dow Jones)–EFG Eurobank Ergasias SA (EUROB.AT), Greece’s second-largest lender by assets, said Monday it will write down EUR664 million on its holdings of Greek government bonds as part of a debt swap program, a discount of about 16.7% to their face value.

The write down resulted in a second quarter net loss of EUR661 million, the bank said in a statement. Without the adjustment for the participation in the bond swap program, Eurobank’s profit for the second quarter would have been EUR3 million, above market expectations.

According to analysts, Eurobank was expected to report second-quarter net profit of EUR250,000, without taking into account the impact of the bond swap program.

Net interest income for the three month period was EUR515 million, beating forecasts of EUR505 million. “In the second quarter of 2011, amid a particularly adverse environment, our group generated operating profits with a substantial contribution from our operations in south-eastern Europe, where our results show a strongly upward trend,” said Eurobank Chief Executive Nikos Nanopoulos.

Earlier Monday, Eurobank confirmed that it plans to merge with the country’s third-largest lender, Alpha Bank SA (ALPHA.AT) in a EUR7 billion deal to create Greece’s largest bank.

-By Stelios Bouras, Dow Jones Newswires; +30-211-0104827; [email protected]


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