Greek lenders’ profile is solid, says DBRS

Greek banks’ profile is solid, their capital base and the quality of their assets improved, while their revenue growth is up significantly, DBRS Morningstar said in a report on the country’s four systemic banks (Alpha, Eurobank, National and Piraeus).

The credit rating agency said that Greek banks reported an aggregate net profit of 3.7 billion euros in 2022 which compares to a net loss of €4.7 billion in 2021.

Revenues in 2022 reflected improvements in all streams, including net interest income (NII), net fees, and other income.

Cost management remained sound despite inflationary pressures.

Loan loss provisions and cost of risk were down markedly in 2022, and asset quality improved further in the year, driven by de-risking, low new nonperforming exposure (NPE) inflows and higher new loans.

Their ample, growing and mostly granular deposit bases provide Greek banks with a rather stable, albeit moderately diversified, funding mix.

Liquidity was sound and capitalization improved after the previous impact of de-risking, DBRS said.

“2022 results benefited from higher revenues, lower operating expenses and reduced credit costs. The faster repricing of loans than deposits has contributed to increase NII to date; however, we expect this to reduce due to higher funding costs,” said Andrea Costanzo, vice president from the DBRS Morningstar Global Financial Institutions team.