Greek Piraeus Bank posts H1 loss on bond swap

Piraeus Bank, Greece's fourth-largest lender with a significant branch operation in Cyprus, on Wednesday reported a first-half net loss of 820 mln euros ($1.18 bln), hurt by an impairment charge from a planned Greek government bond swap.
The bank said before taxes it lost 1 bln euros in the first half after taking into account the impact of its participation in a voluntary debt exchange plan (PSI) aimed at relieving Greece's debt burden.
"The anticipated implementation of July's EU resolutions should lead to more sustainable public debt and a stabilisation of Greece's fiscal balance," Piraeus Chairman Michael Sallas said in a statement.
"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."
Troubled by sovereign debt downgrades, deposit outflows and rising loan losses in a deepening recession, Greek banks are exploring tie-ups to bolster their financial strength in a bid to regain access to wholesale funding markets.
On Monday Greece's second- and third-largest lenders Eurobank and Alpha Bank agreed to merge to form the largest bank in southeast Europe, sparking expectations of further deals in Greek banking.
Piraeus' net interest income grew by 6% year-on-year in the first half to 628 mln euros while it cut its operating costs by 4%.
It said deposits decreased 12% in the year-to-date to 26.4 bln euros as outflows continued to trouble the sector on worries over the debt crisis. Group net loans fell 5% to 36.7 bln euros.