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Hellenic posts Q1 loss on bad loans, Greek sale

Hellenic Bank posted a €31.7 million loss in the first quarter, taking a hit from higher provisioning for bad loans and from the sale of its Greek business as part of an international bailout for Cyprus.

Hellenic was one of three Cypriot banks which sold their Greek branches to that country’s second-biggest lender Piraeus Bank in March under a deal brokered between Cypriot authorities and international lenders to ring-fence the Cypriot banking system and prevent its chaotic bailout spilling over to Greece.

Hellenic, in which the Church of Cyprus is a major shareholder, said it booked a €10.2 million loss from the sale of its Greek unit in a deal valued at €29 million.

The total cost for Piraeus of acquiring the Hellenic, Popular Bank and Bank of Cyprus Greek operations was €524 million.

Cyprus was forced to wind down Laiki and slash uninsured deposits over €100,000 in Bank of Cyprus in return for €10 billion in aid from the European Union and International Monetary Fund.

Unlike Laiki and Bank of Cyprus, Hellenic was not exposed to the restructuring of Greek sovereign debt which blew a hole in the other banks’ balance sheets.

However it said on Friday that group provisions for non-performing loans more than doubled to €56.4 million from €24.1 million a year earlier, reflecting a deteriorating economic environment.

“The developments which followed the Eurogroup meeting of March 25 created a new economic environment in Cyprus which has changed the banking landscape. Inevitably the bank was and will be affected by this,” Hellenic said.

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