By Leonidas Stergiou
Energy crisis and geopolitical developments have eroded estimates for growth, which, however, is projected to move between 3-4% this year, with inflation at 7%. However, the dynamics of the Greek economy will be based mainly on tourism revenues, which this year could reach 18-19 billion euros.
These are the basic assumptions on which the business plan 2022-2025 of Piraeus Bank has been based, which was recently presented by its CEO Christos Megalou. The bank’s scenarios also envisage an increase in interest rates by the ECB at the end of 2022 from -0.50% to zero.
According to Mr. Megalou, in the first quarter the impact of the war and the reduction of disposable income on the market and the banking system was not obvious. On this basis, no worrying increase in red loans is expected. For the next years until 2025, it is projected to maintain the same growth rate as inflation at 2%.
However, despite the increase in interest rates by the ECB, Mr. Megalou noted that a corresponding increase in loan interest rates is not expected, as at the same time the lending spread will be limited. However, net interest margin income will increase due to enhanced credit expansion.
In terms of dividends, the basic scenario predicts a dividend distribution in 2025 from the profits of the year 2024. The distribution rate is set at 35%. However, the case of dividend distribution a year earlier is foreseen, ie in 2024, with a distribution of 20% of the profits of 2023.
The increase in profits is based on interest income, on the increase of income from commissions and asset management and bancassurance, but also on the creation of a digital bank and reduction of operating costs, which include voluntary exit programs for the reduction by 3000 people by 2025.
Source: Capital
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