Greek systemic banks are expected to show resilience to the double challenge of interest rate cuts and geopolitical tensions, according to banking sources and international financial institutions.
Piraeus Bank is expected to announce its nine-month results on Friday, followed by National Bank and Eurobank on Thursday, November 7. Alpha Bank is scheduled to announce its economic figures on Friday, November 8.
Analysts are focused on maintaining profitability in a monetary easing environment as well as on the challenge of credit expansion, dividend policy for 2025 and the faster depreciation of deferred tax – an issue that has emerged recently and is on the table with the Supervisor.
As for the sustainability of the record profits of 2.35 billion recorded in the first half of the year by the four systemic institutions, analysts expect their estimates for 2024 and 2025.
Credit expansion
As for credit expansion, although it shows signs of recovery according to banking sources, it is nevertheless focused on large business loans – such as Attiki Odos – which are not considered sustainable. However, as supervisory sources pointed out to “N”, the credit expansion is what will compensate for the loss of interest income due to the relaxation, therefore, it is crucial that the sector places emphasis on the utilization of EU funds through the Recovery and Resilience Fund and NSRF. At the moment, however, the same sources underlined, the data are not encouraging in terms of the dispersion of funding.
With regard to the ongoing discussion between the Bank of Greece and the supervised institutions for the fastest reduction of deferred taxation – on which a meeting was held on Thursday at the level of the Supervisor’s management and institutions – the Supervisor is awaiting the proposals of the four banks to utilize the highly profitable momentum in order to close the last “open front” left in the domestic sector by the financial crisis.
Distribution of dividends
Regarding the distribution of dividends in 2025 (from the profits of 2024), the four systemic banks have announced dividends of 30%-50%. However, they will be fixed after the Single Supervisory Mechanism’s (SSM) assessments of the resilience of their profitability as well as agreement reached on the faster reduction of the DTC – which will absorb resources from their profitability.
In any case, market sources explained that the leverage for the four banks is extremely high given that in the first half of 2024 they recorded a net profit increase of 26.7% – a momentum that will be difficult to maintain for the next six months. On the contrary, however, senior banking sources revealed to “N” that the results will exceed expectations “at all levels.”
