Piraeus Bank to reduce bad loan exposure ratio to below 6% in 2023

A man walks past a Piraeus Bank branch in Athens

ATHENS (Reuters) - Piraeus Bank, Greece's fourth-largest lender by market value, said on Monday that it will cut its non-performing exposures (NPEs) ratio to below 6% of its loan portfolio in 2023.

Greek banks have been working to reduce a pile of non-performing credit, the legacy of a decade-long financial crisis that shrank the economy by a quarter. They haven't distributed any dividends for many years.

Under a business plan for 2022-2025, unveiled last year, Piraeus aimed to decrease its NPEs ratio to 3.0% by 2025 and possibly start paying out dividends from 2024 onwards.

Piraeus Chief Executive Officer Christos Megalou told an analysts' call on Monday that the decision on dividends will be examined at the end of the year.

"We will be assessing the situation as we come closer to those days. We estimate that we will be well above the supervisory guidance," he said.

The bank targets earnings per share above 0.45 euros ($0.48) this year, up from estimated earnings per share of 0.27 euros for 2022.

Piraeus, which is 27% owned by the country’s HFSF bank rescue fund, said it expects a cost-to-income ratio of below 42% this year. It aims to reduce the ratio to below 40% by the end of 2025.

($1 = 0.9211 euros)

(Reporting by Lefteris Papadimas; Editing by Angeliki Koutantou and Sharon Singleton)