Greek Banks' DTC Write-Off Boosts Ratings

Greek Banks' DTC Write-Off Boosts Ratings

kathimerini.gr

Greek Banks' DTC Write-Off Boosts Ratings

Greek banks' accelerated write-off of deferred tax credits receives positive ratings agency feedback, boosting their capital structures and paving the way for increased dividend payments.

Read original article in Greek
Greek
Greece
European UnionLabour MarketFinanceBankingRestructuringRatingsCapital
FitchS&PEurobankNational Bank Of GreeceAlpha BankPiraeus Bank
What corporate restructuring measures are some of the Greek banks implementing?
Eurobank, National Bank, Alpha Bank, and Piraeus Bank are all aiming to simplify their corporate structures by merging holding and operating companies. This follows the completion of asset quality clean-ups.
What are the anticipated benefits of this accelerated DTC write-off for Greek banks?
The faster DTC write-off will improve the quality of banks' capital, facilitating regulatory discussions about capital distributions and enhancing capital flexibility. While initially impacting regulatory capital ratios negatively, improved profitability will offset this.
What are the expectations regarding the profitability and capital generation of Greek banks in the coming years?
Fitch and S&P both expect Greek banks to maintain strong profitability in 2024-2025, allowing them to build additional capital buffers despite increased dividend distributions. The improved organic capital generation supports this expectation.
How are Greek banks accelerating the write-off of deferred tax credits (DTCs), and what is the projected timeline?
Greek banks are accelerating the write-off of deferred tax credits (DTCs), aiming for zero DTCs by 2032-2034, significantly earlier than initially planned. This move is viewed positively by rating agencies Fitch and S&P, as it improves capital quality and strengthens the banks' credit profiles.
How has the high level of DTCs impacted the banks' credit ratings, and how will the accelerated write-off change that?
The high level of DTCs hasn't been a major negative factor in bank ratings, but the accelerated write-off is still considered beneficial. The improved structural profitability of the banks will offset the negative short-term impact on regulatory capital ratios.