kathimerini.gr
Greek Banks: Strong Profitability and Improved Asset Quality Forecast
Moody's and Deutsche Bank analysts forecast continued strong profitability for Greek banks in 2025-2026, driven by high recurring income, reduced impairments, and robust loan growth; NPEs are nearing EU averages, and capital ratios remain comfortably above minimum requirements.
- How have the Greek banks managed to reduce NPEs, and what is the projected impact of lower interest rates on their future performance?
- The strong performance of Greek banks is attributed to high interest rates on loans, increased loan disbursements fueled by corporate demand, and lower impairments. Moody's projects continued strong profitability in 2025-2026, albeit with some margin compression from lower interest rates. The improvement in NPEs is due to loan restructuring, increased lending, and securitizations of small NPEs.
- What are the key factors driving the positive outlook for Greek banks' profitability, and what are the immediate implications for the financial sector?
- Moody's and Deutsche Bank analysts express strong optimism for Greek banks' prospects. Moody's highlights sustained profitability driven by high recurring income and reduced impairments, with net interest income (NII) rising by approximately 6% year-on-year in 2024. Non-performing exposures (NPEs) are nearing European norms, falling to around 3% at the end of 2024 from 4.1% in 2023.
- What are the long-term implications for the Greek banking sector, considering the current positive momentum and the potential challenges in the wider European context?
- Greek banks' capital ratios remain comfortably above minimum supervisory requirements, supported by strong profitability and organic capital generation, with the average CET1 ratio at 16.5% in 2024. Deutsche Bank notes that Greek banks exceeded expectations in 2024, displaying robust profit growth and exceptional loan and fee activity, positioning them for strong European growth.
Cognitive Concepts
Framing Bias
The headline and introductory sentences highlight the positive outlook of analysts, immediately setting a positive tone. The consistent emphasis on strong profitability and improving NPE ratios reinforces this positive framing. This could influence readers to perceive the Greek banking sector more favorably than a balanced presentation might allow.
Language Bias
The language used is largely positive and enthusiastic, using terms like "ισχυρή κερδοφορία" (strong profitability), "μοναδικό story αξίας" (unique value story), and "εξαιρετικά επίπεδα δραστηριότητας" (exceptional activity levels). While accurate reflections of the reports, these terms lack the neutrality expected in objective reporting. More neutral alternatives could include 'high profitability', 'significant value', and 'high activity levels'.
Bias by Omission
The analysis focuses primarily on the positive assessments of Moody's and Deutsche Bank, potentially omitting counterarguments or negative perspectives on the Greek banking sector. While acknowledging limitations of space, a broader range of viewpoints would enrich the analysis.
False Dichotomy
The article presents a largely positive view of the Greek banking sector's prospects, without fully exploring potential downsides or challenges. This could lead to an overly optimistic interpretation.
Sustainable Development Goals
The article highlights strong profitability and growth in the Greek banking sector, contributing to economic growth and potentially creating more job opportunities. Improved NPE ratios and increased lending also indicate a healthier financial environment, supporting economic stability and development. The increase in lending to the corporate sector further stimulates economic activity.