Dividend to climb to 50% in three years
Greek banks are starting to adjust their dividend policy to the European average, with the approval of the European Central Bank’s Single Supervisory Mechanism of the dividend distribution for last year, for the first time in 16 years.
The dividend policy of the four systemic banks for 2023 came between 10% and 30% of profits, starting from a low base compared to the European average, which is close to 50%. The forecast is that in 2024-2026, the payout ratio will be gradually formed at the level of 50% with a gradual escalation in the next three years, depending on the policy of each bank.
Maximizing the objectives for the three-year period will be under the SSM’s monitoring: It will be asked to give its approval every year, evaluating the capital adequacy of Greek banks, which is close to the eurozone average, the difference being that the quality of their supervisory funds includes a high rate of deferred tax.
The message to banks, as SSM member Kerstin Af Jochnick recently put it, is that “their medium-term capital planning must take into account adverse scenarios which are still possible,” warning of significant challenges still facing European banks.
