ECB Expected to Greenlight Greek Banks' Dividend Payments

credit Bank of Greece

According to four bankers who spoke to Reuters on Wednesday, the European Central Bank (ECB) is anticipated to grant approval for Greek banks to resume dividend payments after a 16-year hiatus, signalling further recovery for the sector.

The Greek banking landscape has been gradually returning to stability following three rounds of recapitalization, which resulted in their nationalization during the previous decade amidst a severe financial crisis that erupted in late 2009.

In recent years, Greek banks have made significant strides in reducing their Non-Performing Exposure (NPE) ratios from 45% in 2016 to below 6%. Moreover, they have successfully diminished state ownership and returned to profitability, prompting them to seek approval for dividend distributions amounting to up to 30% of their 2023 profits.

Their proposed business plans, which encompass the dividend distribution request, were submitted to the ECB earlier this year.

Senior bankers, speaking anonymously, expressed confidence that the ECB would provide a positive response to their request in the coming days, citing expectations of no obstacles in the dividend distribution process.

An ECB spokesperson declined to comment on the matter.

Greece's four major lenders - Eurobank, National Bank, Piraeus Bank, and Alpha Bank - collectively reported profits of approximately 3.5 billion euros in 2023, buoyed by robust economic growth and elevated interest rates.

Bankers anticipate continued robust profitability for the current year, particularly if the ECB's interest rate adjustments align with expectations. This further supports the notion that the ECB is likely to approve the dividend payment request imminently. Additionally, Greece's robust economic rebound and high yields are expected to contribute positively to banks' profitability.

No Comments Yet

Leave a Reply

Copyright Greekcitytimes 2024