The program of the visit to Athens by the head of the supervisory arm of the European Central Bank, Andrea Enria, is in full swing. Tomorrow he will meet with the executives of the General Directorate of Supervision of the Bank of Greece, with its governor, Yannis Stournara, the managements of the banks as well as the Minister of Finance Christos Staikouras.
The visit takes place after 2.5 years since the last time the President of the SSM was in Athens and comes at a time when the four systemic banks have achieved single-digit NPEs ratios, while recording record profits after several loss-making years.
Profits
The distribution of banking sector profits to its shareholders, a decades-old practice that was halted in the context of the financial crisis and the consistent recapitalization of the credit system, is back on the table of discussions between the banks and the Frankfurt-based Single Supervisory Mechanism (SSM). .
Both Eurobank and National Bank have declared their intention to distribute a dividend for the financial year 2022, in the wake of their high profitability indicators. The Supervisor, however, appears hesitant to recommend strengthening the capital ratios of Greek banks over the reward of shareholders, amid the current situation.
It is worth noting that the dividend is expected to be the main menu of issues that will be analyzed at the Bank of Greece by the representatives of the domestic banking scene, welcoming the head of the SSM.
Red loans
From there, Mr. Enria is expected to sound the alarm for the creation of new red loans due to inflation and the energy crisis, which lead to a decrease in citizens’ incomes and great difficulties for businesses. Indeed, in his last presence in the European Parliament at the beginning of December he characteristically stated that “underlying risks point to a possible deterioration in the quality of banks’ assets in the coming months”.
Divestment
In addition, the recent announcement of the State’s intention to proceed with a gradual divestment from the four systemic banks arouses the interest of SSM, which already participated in the Strategic Divestment, and as banking sources estimate, it will evaluate the suitability of prospective investors who intend to acquire shares of systemic banks.
Business plans
At the same time, the managements of the systemic banks are redefining their updated strategic goals for the next 3 years and it is estimated that the first data that emerges, in terms of the growth rates of the main economic figures as well as the most important challenges, will be presented during the meetings. It is considered certain that Mr. Enria will present his opinion on the business plans of the Greek banks.
Finally, Mr. Enria’s visit to Athens coincides with the execution of another pan-European Stress Test, the conditions and details of which are expected to be announced by the European Banking Authority (EBA) by the end of January. For their part, the managements of the Greek banks state – at every opportunity – that there is no cause for concern.
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