DBRS for Greek banks: Strong profitability and improved credit profile

Ratings bureau DBRS gave a vote of assurance successful the prospects of Greek banks, citing their resilience, strong net and improved superior adequacy.

“The large Greek banks (Alpha Bank S.A., Eurobank S.A., National Bank of Greece S.A. and Piraeus Bank S.A.) reported combined nett profits of 4.3 cardinal euros successful 2024, up 18% year-on-year (YOY).

Higher nett involvement income (NII) and nett interest income, combined with outgo power and little provisions for non-performing loans (LLPs), supported the 2024 results. In addition, Eurobank’s acquisition of Hellenic Bank contributed positively to the results. The mean instrumentality connected equity (ROE) stood astatine 13% successful 2024, compared to 12% successful 2023,” DBRS pointed retired successful its caller report.

“Net involvement income yield remained resilient, chiefly owed to the summation successful firm loans, contempt the alteration successful involvement rates. At the aforesaid time, nett interest income accrued importantly successful 2024 and operating ratio remained astatine precocious levels.

Although the gross structure of Greek banks depends mostly connected NII, we estimation that recognition growth, combined with banks’ displacement to investments, plus absorption and security merchandise commissions (bancassurance), arsenic well arsenic the amended prospects of the Greek system compared to the European average, will lend to limiting the antagonistic impacts of little involvement rates, geopolitical tensions and threats to planetary trade,” it added.

The outgo of hazard (COR) fell successful 2024, driven by affirmative plus prime dynamics and sustained indebtedness growth, which led to further strengthening of hazard profiles.

Banking assemblage backing and liquidity remained strong. Capital buffers strengthened and superior prime improved successful 2024, providing greater strategic flexibility. While dividend organisation and stock buybacks stay a precedence for the contiguous future, Greek banks look to beryllium considering different options for superior utilization, such arsenic mergers and acquisitions (M&A).