Elias Xirouhakis (HFSF): Greek banks have entered the path of growth

The revised business plans of the banks reflect the significant growth prospects of the country’s economy for the coming years, he pointed out. Chief Executive Officer of the HFSF Mr. Elias Xirouchakis. He explained that this growth is expected to be based, inter alia, on the inflow of resources from the Recovery and Resilience Fund), the positive economic climate – the most favorable for the country of the last fifteen years (as of course this was formed before the serious geopolitical developments) and the significant investment activity of foreign investment funds that have highlighted Greece in the last 2-3 years as a very attractive investment destination in many sectors such as energy, infrastructure, real estate construction, etc.).

Consolidation

At the same time, according to Mr. Xirouchakis, the bank administrations have prepared and submitted a clear roadmap for the consolidation of their balance sheets with very positive and most tangible results in this direction, as shown by the announcements of the previous days regarding the results for the year 2021. The rapid improvement of their assets continues to surprise positively for all four banks. “We have seen the average Non-performing Exposure Index (NPI) for their domestic loan portfolios fall to around 11% on average (although for some banks the index is single-digit as early as 2021 with the aim of further converging with the average “European term, that is, to be formed in a low single-digit percentage, in the next period. It is useful to remind here that this index at the times we all want to forget had reached 49.1%”, he noted. is reflected in the balance sheets through the significantly lower risk cost that at the end of 2022/2023 which is expected to reach 60-70 basis points (from about 290 mbar on average in recent years), depending of course on the absorption rate and the coverage levels of each bank.

Free from the high percentages of non-performing loans inherited by the ten-year financial crisis, Mr. Xyrouchakis continued, they are now in a much better position to fully meet the key role they have for the development of the national economy. Consequently, the focus of the entire banking system is now clearly directed towards growth. The net credit expansion is expected to largely curb the pressure observed in recent years on net interest income, mainly due to the leverage of Non-performing Exposures, the ever-increasing intensity of competition and the particularly favorable conditions, which were observed until end of 2021, in the international bond markets (including corporate).

Recovery and Durability Plan

Greek banks, according to the HFSF, have made the appropriate preparations in order to make the most of the Recovery and Sustainability Plan and the other resources of the European Union, proceeding to the creation of internal infrastructure of products already offered to their customers in order to have the maximum possible utilization of the funds that are expected to flow into the country. “We hope, of course, that this will happen on the business side as well,” he said. other services (mostly consulting), where banks want and can play an important role.Commission revenues and convergence in this area with the corresponding European ones, is also a key target for Greek banks in the coming years.

Effectiveness

At the same time, they all try, utilizing a series of initiatives and actions, to achieve their cost optimization through the more efficient management of their operations, the significant enhancement of digital distribution channels and in general their digital capabilities, which they support with continuous and generous investments. in technology.

“In the right way”

In closing, Mr. Xirouchakis pointed out that “we are particularly pleased with the commitments of the administrations of the four systemic banks for increased organic and recurring profitability in the coming period, which will ensure and fully shield their long-term goal. “It will always be demanded not only by supervisors but also by the investment community itself, especially those with a long-term investment horizon. Greek banks now have, without the slightest doubt, entered the right path of healthy growth.”