By Alkman Granitsas
ATHENS--Greece's Alpha Bank AE (ALPHA.AT), the country's fourth largest lender based on assets, Friday reported a 142.5 million euro ($188.3 million) net loss for the second quarter of the year as it continued to set aside hundreds of millions of euros for bad loans.
For the three months to June, the bank said it had set aside EUR479.1 million for non-performing loans as Greece continues to struggle through a sixth year of a deep recession, which has sent business bankruptcies soaring and unemployment rates to record highs.
However, the results, the first since the bank was fully recapitalized with help from the Greek state earlier this year, also showed some signs of improvement compared with the last year as the rate of new bad loans appeared to slow, while the cost of funding for the bank dropped sharply.
Net interest income--the difference between what the bank makes on loans and its borrowing costs--rose sharply to EUR412.8 million, compared with EUR316.5 million in the first quarter.
That increase mainly reflected Alpha's ability to resume borrowing cash from the European Central Bank, rather than the pricier lending facility at the Bank of Greece. In January, Greek banks were allowed to resume borrowing from the ECB after being effectively barred from doing so for the better part of a year pending their recapitalization.
At the same time, bad loans in the second quarter rose by EUR791 million--representing 31.8% of the loan book--compared with EUR943 million in the first quarter. In the first three months of the year, the bank had set aside EUR504.9 million for impaired loans.
The second quarter figures include the recent acquisition of Emporiki Bank--the one-time Greek branch of France's Credit Agricole SA (ACA.FR)--meaning they are not directly comparable to year earlier data.
In the first quarter, Alpha reported a net profit of EUR2.88 billion helped by a goodwill accounting charge from the Emporiki acquisition.
The acquisition of Emporiki took effect in February and is part of an ongoing merger process in the Greek banking sector.
Write to Alkman Granitsas at alkman.granitsas@wsj.com
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