The European Central Bank (ECB) gave Greek banks the green light to reinstate dividend payments this week after 16 years.

The move, which came after the request of the country’s three major banks, reflects the continued recovery of Greece’s banking sector, which has gone through three recapitalizations and nationalizations following the decade-long debt crisis that hit in 2008.

Goldman Sachs, JP Morgan and Jefferies welcomed the news, which they claim will “unlock” Greek banks’ share potential.

Over the last few years, Greek banks managed to lower non-performing exposure (NPE) ratios from 45% in 2016 to under 6%.

According to Reuters, Greece’s – top banks – Eurobank, National Bank, Piraeus Bank, and Alpha Bank – reported a combined profit of approximately 3.5 billion euros in 2023, driven by high interest rates and robust economic growth. They now aim to distribute dividends amounting to 30% of their 2023 earnings.

Meanwhile, the European Central Bank (ECB) has lowered interest rates by 25 basis points at its June meeting on Thursday. The move was expected by the markets after previous signals from policymakers in Frankfurt. The decision aims to ease the monetary policy restrictions following nine months of stable rates.