European Central Bank to issue verdict on banks’ dividends

Greece’s four major banks have until the end of the month to submit their capital plans for the next three years to the Single Supervisory Mechanism (SSM) of the European Central Bank, based on which the request for the distribution of 2023 dividends of 10-30% will be assessed.

The total amount of dividends to be distributed by Eurobank, Alpha, National and Piraeus is estimated to approach 840 million euros, from total net profits of €3.6 billion last year, with significant variations depending on the bank, both in absolute size and as a percentage of profits.

The ECB will allow Greek banks to make the first payments to their shareholders, Bloomberg noted on Thursday, confirming the information so far, based on which the request will meet a positive response from the supervisor’s side.

However, as noted in the relevant publication of the agency citing a source with knowledge of the matter, the final amount will be lower than what the banks have requested, clarifying however that the final decisions have not yet been made. 

When asked about this in an interview with the Mononews website, the head of the Bank of Greece, Yannis Stournaras, noted that “the SSM will ask for assurance that everything is taken into account, that is, the liability for the deferred tax credits (DTC), the uncertainty about the future, and the need to have cushions.”

Based on the timetable, the formal requests to the SSM will be submitted in the second fortnight of April and the final decisions by the supervisor will be made in June. 

However, the four systemic banks have already announced their intentions for the distribution of dividends both for the previous financial year and for the next three years, which foresee the distribution gradually of up to 50% of the profits. 

Especially for 2023, the banks have taken into account the impact that the distribution of a dividend of 10% to 30% will have on their supervisory capital.

The bank with the highest dividend for 2023 is Eurobank, with some €335 million to be distributed (25% of profits). Over €300 million will be distributed to National Bank shareholders (25-30% of profits), followed by Alpha, which will distribute €122 million (20% of profits), and Piraeus with €80 million (10% of profits).