“The time has come again for Greek banks to be able to once again distribute part of their profits to shareholders, both to reward existing investors and to attract new ones,” said, among others, the Deputy Governor of the Bank of Greece, Christina Papakostantinou , in the ECB’s Supervision Newsletter.

She assured that the capital adequacy of Greek major institutions has greatly improved in recent years, thanks to high profitability, the consolidation of their balance sheets and other capital strengthening actions. Therefore, the major Greek banks have the capital buffers they need to meet their credit expansion targets.

As she explained, Greek systemic banks prepare for dividend distribution in 2024, after more than 10 years since the start of the Greek public debt crisis.

Since 2014, when the SSM Single Supervisory Mechanism began to operate, a restriction had been imposed on Greek banks not to pay dividends. This is a qualitative requirement under the Supervisory Review and Evaluation Process (SREP) to ensure that banks maintain sufficient capital to absorb losses associated with a reduction in the stock of non-performing loans (NPLs). The decision on dividends in 2024 is expected to be issued in June and will likely take into account the determined and sustained efforts of Greek banks to reduce their large stock of NPLs.

He added that the Greek banking market is characterized by a high degree of concentration, as the four important banks hold 96% of the total assets of the banking sector, therefore any increase in the activity of fintech companies and other non-banking institutions will be welcome, because it will strengthen product offering and will provide alternative sources of financing as well as investment opportunities.

Regarding the increase in loans argued that all Greek banks have set ambitious targets for their credit expansion. Over the next three years, credit to the economy is expected to be supported by funds available through the loan arm of the EU’s Recovery and Resilience Facility. However, accelerating credit flows to households and SMEs is a critical condition for achieving the of these ambitious goals.