Credit sector flies ever higher

Greece’s four systemic banks showed high profitability of 3.7 billion euros last year, against losses of €4.7 billion in 2021, while also recording one of the highest net interest margins among European banks. This follows from the consolidated comparative data for 2022 published by the Single Supervisory Mechanism (SSM) of the European Central Bank for all the banks it supervises, according to which the interest margin in Greece came last year to 2.14%, which is the third best performance in the eurozone.

The high interest margin is a consequence of the rise in interest rates on loans and the holding down of interest rates on deposits. Based on SSM’s data, the ranking is led by Spain with a corresponding index of 2.25%, followed by Slovenia, where the corresponding percentage is set at 2.17%.

Most banks in the eurozone have an interest margin below 2%, with the exception – besides Greece and Spain – of Austria with 2.08% and Estonia with 2.04%, while in countries such as Germany the corresponding percentage it stood at 1% and in France at 1.01%.

According to the comparative data the SSM published last week, in addition to performing well on the interest income front, Greek banks showed:

– The third best performance in return on equity (ROE) with an index that reached 14.43%.

– The fourth best performance in terms of return on assets (ROA) with the corresponding index standing at 1.20%.

– The best performance in the cost to income ratio, with the corresponding ratio being 36.9%.

– The second best performance in the loans-to-deposits index with 60.44% against 103.49% European average.

– The third worst performance in the capital adequacy ratio, with the corresponding ratio standing at 17.70% against 19.26% in the eurozone, and

– The worst performance in the index of nonperforming loans which – despite the progress made – stood at 6% from 2.28% in the eurozone.

In total, the interest income of the four banks amounted to €5.6 billion and represents 55.58% of organic income in 2022, from €5.3 billion in 2021.