Greek banks boost capital reserves, report €2.3bn profit in first half of 2024

The capital reserves of Greek banks have been further strengthened, though the quality of these funds remains weak, according to a report by the international credit rating agency Morningstar DBRS.

In its report, the agency mentioned that Greek banks—including Alpha Bank, Eurobank, National Bank of Greece, and Piraeus Bank—reported a combined net profit of €2.3 billion for the first half of 2024.

This amount represents a 25 per cent increase when compared to the same period last year.

The report also highlighted that higher net interest income and net fees bolstered earnings in the first half of 2024, despite significant declines in trading profits and other non-recurring revenues.

What is more, the agency also pointed out that cost control measures helped offset inflationary pressures and increased expenses related to digitalisation.

“The sector’s liquidity continues to be supported by large, growing, and stable deposits,” said the agency.

It also made note of increasing activity related to capital issuances, despite ongoing repayments of central bank funding.

Additionally, DBRS observed that the cost of risk decreased in the first half of 2024 compared to previous years, although it remains above the European average.

“Higher core revenues, cost discipline, and lower provisions for bad debts led to higher profits in the first half of 2024,” said Andrea Costanzo, Vice President of European Financial Institution Ratings at Morningstar DBRS.

“Stronger-than-expected performance in the first half of the year sets higher expectations for 2024,” he added.

Costanzo explained that this is “primarily due to the greater-than-anticipated resilience of net interest margins, reflecting the slower decline in interest rates, as well as the improved deposit mix and credit growth rate”.