CEOs from Greece’s top four banks converged in London at the Greek Investment Forum, organized by Morgan Stanley and the Hellenic Stock Exchange (ATHEX). In a pivotal meeting, talks focused on profit bolstering and dividend distribution, a focal point not visited in the past 15 years.

In private sessions with investors and panel discussions, systemic bank heads laid out their plans for business expansion and initiating policies rewarding shareholders. Anticipating an upswing in credit expansion next year, driven by increased disbursements and reduced early repayments, they linked these expectations to Greece’s improved macroeconomic environment and the eurozone’s expected interest rate normalization cycle in 2024.

The bankers emphasized the critical role of swiftly implementing actions under the Recovery and Resilience Fund, expecting robust demand. Asset expansion through new financing is predicted to bolster both net interest income and fee income, further propelled by activities in bancassurance, investment programs, and electronic banking. As a result, a double-digit return on equity, ranging from 13% to 15%, is foreseen for domestic banking groups over the next two years.

In response to potential monetary policy relaxation in 2024, the leaders indicated pre-emptive measures to counter related risks. Lower interest rates are anticipated to stimulate demand for new loans while slowing down early repayments by creditworthy clients, particularly businesses.

Addressing concerns about non-performing loans, executives noted that net inflows of new impairments are minimal and do not raise alarms. Optimism pervaded discussions about dividend distribution from 2023 profits, with talks with regulators in preliminary stages.
Eurobank and the National Bank of Greece plan to return 20%-30% of 2023 profits to shareholders, Alpha Bank targets 20%, and Piraeus Bank aims for 10%, representing a symbolic first step in rewarding shareholders.

Investor interest in positions within the four systemic banks was evident in the successful placement of 22% of the National Bank of Greece. The entry of UniCredit into the share capital of Alpha Bank further underscored positive sentiment. The disinvestment of the Financial Stability Fund by Piraeus Bank is expected to occur on favorable terms in early 2024.