The Greek systemic banks (National Piraeus Eurobank and Alpha Bank) widened their interest margin (difference between interest rates on deposits – loans) in the third quarter of the year according to the official data of European Central Bank.

Despite the pressure that the domestic banks have received in order to close the gap between the interest rates on deposits and loans, the data published today by the ECB certify that not only have they not complied with the instructions, but they have moved in the opposite direction.

Specifically, in the third quarter of 2023, the net interest margin of Greek banks widened to 3.20% from 3.13% in the second quarter.

The development keeps domestic credit institutions in one of the highest positions among the rest of the Eurozone. Indicatively, the Baltic banks operate with a higher interest margin than that of the Greek banks (Estonia 3.77%, Lithuania 3.55%, Latvia 3.90%). In contrast, the interest rate spread (always for the third quarter of 2023) was 2.10% in Italy, 3.16% in Portugal, 1.13% in Germany and 0.89% in France.

Otherwise, Greek banks showed an improved picture in the third quarter of 2023, according to ECB data, as they strengthened their capital base, further reduced bad loans, and increased their profitability ratios.

Specifically the core CET1 capital ratio increased to 14.27% from 14.26% and the TIER 1 capital ratio increased to 14.96% from 14.95%.

On the balance sheet consolidation front, progress is recorded as the ratio of non-performing loans fell to 4.15% from 4.63%.

At the same time, loans that are in Stage 2 (i.e. just before going into arrears) were reduced to 10.25% from 10.75% respectively.

Regarding bank efficiency ratios, the return on equity of Greek banks increased to 12.89% from 12.71 and the return on assets ratio reached 1.23% from 1.19%.