Piraeus Bank posts higher Q1 profit on strong net interest income

ATHENS (Reuters) - Piraeus Bank, Greece's third-largest lender by market value, reported higher quarterly net earnings on Friday on strong net interest income.

The bank, which is 27% owned by the country's HFSF bank rescue fund, reported net earnings of 180 million euros ($198.7 million) in the first three months of the year, compared with a profit of 170 million euros in the last quarter of 2022.

Net interest income in the first quarter rose to 420 million euros from 407 million euros in the fourth quarter, benefiting from the favorable interest rate environment.

Piraeus Bank's book of so-called non-performing exposures (NPE), or bad loans, continued to shrink to a ratio of 6.6% of its total loan book at the end of March from 6.8% in December. It aims to cut that to below 6.0% by the end of the year.

The bank lifted its earnings per share target to about 0.55 euros this year from a previous estimate of 0.45 euros.

Piraeus CEO Christos Megalou said in a press release that the bank had also upgraded its target for return over tangible book to 12%. He added that he is planning for a 10% dividend payout from 2023 profits.

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 have not distributed dividends since 2011.

($1 = 0.9057 euros)

(Reporting by Lefteris Papadimas; Editing by Jan Harvey)