The “strong results” announced by the four major Greek banks Moody’s comments with its analysis.

As he states, the Alpha Bank (Ba1/Ba2 positive, ba3), the Eurobank (Baa3/Ba1 Positive, ba2), the National Bank (Ba1/Ba2 Positive, ba3) and n Piraeus Bank (Ba1/Ba2 Positive, ba3), announced “strong” figures for 2023 which were supported by high lending rates, relatively low impairments, while at the same time they were able to further reduce non-performing loans and maintain comfortable funding and liquidity. Non-performing loans have fallen, converging more towards the average of major EU banks.

In addition, it states that the Non-Performing Exposures (NPEs) continued to decline last year, reducing the average NPE ratio to 4.1%, down from 6.2% in 2022 and from a high of 49% in December 2016 (note that the corresponding European average is 2.3%).

However, the company estimates that this year the banks they will find it difficult to achieve a significant reduction in Non-Performing Exposures in the wake of high interest rates, although he predicts that the downward trend will be maintained.

Referring to the capital strengthening of the four systemic banks, Moody’s emphasizes that it was higher than the minimum requirements. The average Common Equity Tier 1 (CET1) capital ratio stood at 15.7% in 2023, compared to 13.8% in 2022, although Moody’s preferred tangible common equity (TCE) ratio is expected to move significantly lower due to Deferred Tax Credits remaining high.

Commenting on the improved profitability of the four systemic banks, the company notes that it was mainly based on net interest income, which in total recorded an impressive 51% increase.

Finally, regarding deposits, Moody’s estimates that they are supported by the comfortable financing and liquidity available to the four major banks.