Greek banks' profile is solid, their capital base and the quality of their assets improved, while their revenue growth is up significantly, DBRS said in a report on the country's four systemic banks (Alpha Bank, Eurobank, National Bank and Piraeus Bank).
More specifically, the credit rating agency said that Greek banks reported an aggregate net profit of 3.7 billion euros in 2022 which compares to a net loss of 4.7 billion in 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, DBRS said.
"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 Constanzo, vice president from the DBRS Morgningstar Global Financial Institutions team. "Capital buffers are sufficient to absorb unrealised losses on the fixed income securities at amortized cost, in the event these materialised due to any funding and liquidity stress after the collapse of SVB and Signature Bank in the US," the credit rating company said.