Ratings agency DBRS gave a vote of confidence in the prospects of Greek banks, citing their resilience, strong earnings and improved capital adequacy.
“The major Greek banks (Alpha Bank S.A., Eurobank S.A., National Bank of Greece S.A. and Piraeus Bank S.A.) reported combined net profits of 4.3 billion euros in 2024, up 18% year-on-year (YOY).
Higher net interest income (NII) and net fee income, combined with cost control and lower provisions for non-performing loans (LLPs), supported the 2024 results. In addition, Eurobank’s acquisition of Hellenic Bank contributed positively to the results. The average return on equity (ROE) stood at 13% in 2024, compared to 12% in 2023,” DBRS pointed out in its new report.
“Net interest income yield remained resilient, mainly due to the increase in corporate loans, despite the decrease in interest rates. At the same time, net fee income increased significantly in 2024 and operating efficiency remained at high levels.
Although the revenue structure of Greek banks depends largely on NII, we estimate that credit growth, combined with banks’ shift to investments, asset management and insurance product commissions (bancassurance), as well as the better prospects of the Greek economy compared to the European average, will contribute to limiting the negative impacts of lower interest rates, geopolitical tensions and threats to global trade,” it added.
The cost of risk (COR) fell in 2024, driven by positive asset quality dynamics and sustained loan growth, which led to further strengthening of risk profiles.
Banking sector funding and liquidity remained strong. Capital buffers strengthened and capital quality improved in 2024, providing greater strategic flexibility. While dividend distribution and share buybacks remain a priority for the immediate future, Greek banks appear to be considering other options for capital utilization, such as mergers and acquisitions (M&A).
