Catalysts Supporting the Narrative of Greek Banks

Stable involvement rates, recognition expansion, and dynamic buybacks acceptable the signifier for higher profits and enhanced distributions

Greece’s four systemic banks are expected to instrumentality to an upward trajectory, leveraging positive macroeconomic and regulatory signals for the coming years. A cumulative 181-basis-point driblet successful the mean quarterly Euribor since Q1 2024, coupled with the ECB’s stabilization of involvement rates, creates an perfect situation for profitability successful 2026–2027.

Stable rates and profitability

The stabilization awesome from Frankfurt, arsenic highlighted by Christine Lagarde, indicates that the ECB’s argumentation is astatine a bully point and that the disinflation process is mostly complete. Analysts task rates to stay astir 2% until the extremity of 2026, with a gradual summation toward 3% from 2027 onwards, driven by rising wages and tightening labour supply.

At the aforesaid time, the strengthening of the euro has helped mitigate inflationary pressures, portion EU–US commercialized relations stay stable, with an mean existent tariff astatine 16%. The deposit complaint dispersed betwixt the ECB and the Fed remains elevated (237 bps vs. a 86-bps average), creating a favorable situation for Greek banks.

Net involvement income backmost connected track

One of the key catalysts for Greek banks is the resumption of nett involvement income growth. From Q2 2025, the complaint of diminution slowed for Eurobank, Piraeus, and National Bank, with a affirmative rebound expected for Eurobank and Piraeus successful Q3. Alpha Bank already experienced betterment earlier owed to little sensitivity to falling rates.

Repricing of performing loans, recognition expansion, hedging strategies, and M&A activity (e.g., Hellenic Bank–Eurobank, AstroBank–Alpha) are expected to supply further momentum. JP Morgan projects net involvement income growth for Alpha Bank astatine 6% successful 2026 and 13.2% successful 2027, with akin affirmative outlooks for Eurobank, National Bank, and Piraeus.

Credit enlargement and involvement margins

Strong credit growth remains a cornerstone of the concern narrative. By July 2025, Greek banks reported annual 11% maturation successful caller performing loans, versus astir 3% for European peers. The CAGR for performing loans is projected astatine 8% successful the coming years, with involvement margins expected to stay high, astir 3.2%–3.23% successful 2026–2027.

Mortgage lending remains limited, with yearly disbursements astir €1 billion, compared to a pre-crisis highest of €15 billion. Banks expect a gradual summation to €4–5 cardinal implicit the adjacent fewer years.

Payouts, buybacks, and EPS growth

Greek banks are moving to increase payouts, targeting 50%–60% of 2025 profits. Eurobank and Alpha Bank purpose for adjacent higher distributions. Dynamic share buybacks are besides supporting EPS maturation (CAGR), with analysts forecasting 6%–8% maturation successful 2026–2027, and perchance up to 15% for Alpha Bank and 8% for Piraeus.

Greek banks commercialized beneath European peers, with P/TBV astatine ~1.1x and adjusted P/E astatine 8.7x for 2025 and 7.9x for 2026, versus 9.9x and 9.2x for Eurozone banks.

Capital spot and M&A arsenic maturation levers

Strong capital buffers and faster amortization of deferred taxation credits (DTCs) enable some integrated and inorganic growth, higher payouts, and strategical moves with regulators (SSM). M&A enactment and excess superior utilization further heighten profitability and distributions, creating a coagulated instauration for the adjacent 5 years.

Source: pagenews.gr

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