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Greece's Eurobank reports surge in 2022 profit as economy improves

A man walks outside a Eurobank branch in Athens

ATHENS (Reuters) -Eurobank, Greece's largest lender by market value, reported that profit quadrupled last year on the back of higher net interest income and lower provisions for impaired loans.

The bank, which is 1.4% owned by the country's HFSF bank rescue fund, reported a net profit of 1.33 billion euros ($1.41 billion) versus 328 million euros in 2021.

Greek banks are benefiting as the country's economy rebounds from a decade-long debt crisis and the COVID-19 pandemic. It expanded by 5.9% last year on higher consumer spending, strong tourism and investment.

Eurobank's net interest income grew by 17.4% year on year in 2022 to 1.55 billion euros, driven by higher rates, lending and its international business.

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It said it will start paying a dividend out of its earnings next year, for the first time since the debt crisis, with the planned payout ratio seen at around 25%. The bank initially planned to distribute a dividend this year.

"The amount earmarked for dividend distribution (in 2023) will be used in an optimal way to bid for the 1.4% HFSF stake through a share buyback scheme," said Eurobank's Chief Executive Fokion Karavias.

The HFSF fund has spent about 40 billion euros ($43 billion)to recapitalise Greece’s four largest lenders during the country's decade-long financial crisis, receiving shares in exchange.

HFSF holds a 40.4% stake in National Bank of Greece, 27% in Piraeus Bank, 9% in Alpha and 1.4% in Eurobank.

Eurobank's non-performing loan exposure (NPE) ratio fell to 5.2% at the end of December, from 6.8% at the end of 2021, with the stock of bad loans declining to 2.3 billion euros, from 2.8 billion euros at the end of 2021.

($1 = 0.9452 euros)

(Reporting by Athens newsroom; Editing by Kirsten Donovan and Susan Fenton)