Laiki Bank has announced a €1.3 billion half-year loss, the result of heavy provisions for non-performing loans and an impairment of goodwill.
The news comes just two days after Bank of Cyprus posted a first-half net loss of €134 million on increased provisions for non-performing loans, and on the same day that Hellenic Bank announced a €14.9 million profit for the first half of the year despite the rise in provisions for non-performing loans.
Laiki Bank, the island’s second-biggest lender, which was part-nationalised in June after its regulatory capital was depleted from heavy exposure to Greek sovereign debt, said it increased provisions for non-performing loans to €885 million compared with €183 million in the first half of 2011.
The bulk, or €706 million concerned its Greek loan portfolio, Laiki said.
“The resulting coverage ratio for non-performing loans stands at the high level of 48% for the Group,” the lender said.
Laiki added that it had: “also proceeded to effect an additional impairment of goodwill and other intangible assets of €580 million, mainly from its activities in Greece, due to further deterioration of economic conditions in the country. This impairment has no impact on the Group’s regulatory capital position but increases the accounting loss attributable to shareholders to €1.3 billion.”
Excluding the impairment of goodwill and other intangible assets, the bank said its first-half losses reached €729 million versus €202 million in the first six months of 2011.
“It is worth noting that all the countries that the Group operates were profitable, with the exception of Greece,” the lender said.
On June 30, 2012 Laiki’s net loan portfolio stood at €23.1 billion, down 10% year-on-year 5.0% on a quarterly basis.
Its Cypriot loan portfolio reached €10.6 billion at the end of the first-half, up 3.0% year-on-year.
The lender’s portfolio saw a 21% drop, to €10.2 billion.
Laiki also saw a 22% drop in deposits to €18 billion “due to the adverse macroeconomic environment that prevailed especially in Greece.”

Cyprus weekly