kathimerini.gr
Greek Banks Accelerate Deferred Tax Liability Reduction
Greek banks plan to significantly reduce their deferred tax liabilities (DTC) starting in 2025, aiming for a 29% reduction annually tied to dividend distribution, a strategy facilitated by a 2024 agreement with the SSM allowing for higher dividend payouts.
- How did the agreement with the SSM impact the banks' dividend distribution policies and their ability to reduce DTC?
- This accelerated DTC reduction is driven by a 2024 agreement with the Single Supervisory Mechanism (SSM), allowing increased dividend payouts. In 2024, the four systemic banks reduced their tax liabilities to roughly €18 billion, with €12.1 billion of that attributed to regulatory capital, representing 51% of their Common Equity Tier 1 (CET1) capital.
- What is the primary goal of Greek banks regarding their deferred tax liabilities (DTC), and what is the timeline for achieving this goal?
- Greek banks aim to accelerate the reduction of their deferred tax liabilities (DTC), which constitute about half of their regulatory capital, starting in 2025. A 2024 agreement with the SSM allows for dividend distribution of up to 50% of profits, aiming to pay off DTC approximately seven years earlier than initially projected.
- What are the potential risks or challenges that could hinder the banks' plans to reduce their DTC, and how might these challenges impact their overall financial health and stability?
- The plan involves a significant reduction of DTC as a percentage of CET1 capital for major banks by 2027-2028, while maintaining high CET1 ratios and increasing dividend distributions. However, unforeseen circumstances, such as potential legal challenges or economic downturns, could affect these projections. The acquisition of Ethniki Asfalistiki by Piraeus Bank is expected to impact its DTC ratio, potentially lowering it to 25% by 2028.
Cognitive Concepts
Framing Bias
The article frames the reduction of DTC as a positive and largely unproblematic financial maneuver. The language used is optimistic and focuses on the success of the banks in achieving agreements with regulators. The potential risks or downsides of this strategy are not highlighted.
Language Bias
The article uses language that could be considered somewhat positive or optimistic in its description of bank actions. For example, describing the agreement with SSM as "unlocked" implies a positive outcome without considering potential downsides. Neutral alternatives could include describing the agreement as "reached" or "finalized".
Bias by Omission
The provided text focuses on the financial strategies of Greek banks to reduce deferred tax liabilities (DTC), and doesn't offer broader economic or social context. The impact of these strategies on the broader Greek economy or on bank customers is not discussed. This omission could limit a reader's understanding of the full implications of the reported actions.
False Dichotomy
The article presents a narrative focused on the reduction of DTC as a primary goal, without exploring alternative strategies or potential trade-offs. For instance, the implications of faster DTC reduction on investment or other bank activities are not considered. This implies a false dichotomy between DTC reduction and other strategic goals.
Sustainable Development Goals
The article discusses measures by Greek banks to reduce deferred tax liabilities (DTC), which represent a significant portion of their regulatory capital. Reducing DTC leads to increased capital available for distribution as dividends and investments, potentially promoting fairer distribution of wealth and reducing inequality among shareholders and stakeholders. This aligns with SDG 10, which aims to reduce inequality within and among countries.