On a trajectory of strong profitability moved the banks the first 6 months of 2024. A stronger than expected first half that prompted bank management to revise upwards their guidance for 2024 profitability. They are now looking at a net result of 4.5 billion .euro cumulatively for 2024.

In particular, expectations for Greek banks are improving after the better-than-expected results they announced for the first half, notes Morningstar DBRS. The rating agency attributes the outperformance to better-than-expected resilience of net interest margin, which reflects slower rate cuts, a better deposit mix and a stronger pace of credit growth.

Higher income from core banking activities, discipline on the cost front and lower provisions for loan losses drove profitability in the first half, according to DBRS.

Oi four systemic banks reported total earnings of 2.3 billion, up 25% year-on-year.

OR Eurobankin the first half, recorded profits of 721 million (+5.4%), h National profits 670 million (+26%), h Alpha Bank profitability of 322.5 million euros (+6.5%) and its profits Piraeus they reached 563 million from 299 million in the corresponding period last year.

Interest income amounted to 4.197 billion euros. Ethniki announced interest income of 1,192 million euros (+13%), Eurobank 1,132 million euros (+8.6%), Piraeus 1,045 million euros (+11.76%) and Alpha Bank 829 million euros. euros (+6.4%).

Revenue from commissions reached 1,010 million euros. Ethniki announced commission income of 205 million euros (+15%), Eurobank 283 million euros (+4.7%), Piraeus 325 million euros (+11.76%) and Alpha Bank 197 million. euros (+13.7%).

The average gross NPEs ratio decreased to 3.5% at the end of June 2024 from 4.1% at the end of 2023. The average NPEs coverage level strengthened to around 68% from 66% in the same period. The NPL ratio for Eurobank decreased to 3.1% from 5.2% in the corresponding half of last year, for Piraeus to 3.3% from 5.5%, for National Bank to 3.3% from 5, 7% and for Alpha Bank to 4.7% from 7.6%.

Average annualized return on equity (ROE) stood at 14% in the half, marginally better than the corresponding period in 2023.

In particular, higher net interest income and fees supported revenue, despite significantly lower trading and other non-recurring income. Cost control helped offset inflationary pressures and higher spending due to digitization, DBRS analysts point out.

Risk costs decreased in the first half compared to previous years, although they remained at levels higher than the European average. The risk profile of Greek banks strengthened further, amid continued risk reduction and favorable trends in asset quality, it stressed.

Greek banks showed a good second quarter in 2024, with an improved bottom line, NBG Securities notes in its analysis.

As the analysts explain, the lower core earnings before provisions reflect higher deposit hedging costs, the expansion of the loan portfolio with new disbursements of more than 8 billion euros cumulatively, higher fee income and lastly, significantly lower trading income. Greek banks have maintained their strong capital and ample liquidity, which can continue to be invested in higher-yielding assets, NBG said.