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Greek Banks: Positive Revenues Momentum and Cleaner Balance Sheets Drive FY22 Results; Funding Profiles are Solid

The commentary analyses the FY22 results for the four major Greek banks: Alpha Bank, Eurobank, National Bank of Greece, and Piraeus. The results show improved net profitability levels after years affected by de-risking, restructuring and COVID-19.

Summary highlights from the commentary include:

• Greek banks reported an aggregate net profit of EUR 3.7 billion in FY 2022 which compares to a net loss of EUR 4.7 billion in FY 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 non-performing 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 capitalisation improved after the previous impact of de-risking.

“FY 2022 results benefitted 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. “Capital buffers are sufficient to absorb unrealised losses on the fixed income securities at amortised cost, in the event these materialised due to any funding and liquidity stress after the collapse of SVB and Signature Bank in the US.”