Greek banks are resilient in the crisis

LAST UPDATE 17:15

Optimism for the Greek economy, for the significant reduction of red loans, but also the necessary moves to finance the real economy was expressed by the heads of the four systemic banks, at the Moneyreview Banking Summit conference. The panel on the Greek banking system was attended by the CEOs of Eurobank, Mr. Fokion Karavias, Alpha Bank, Mr. Vassilis Psaltis, Piraeus Bank, Mr. Christos Megalou, and the National Bank, Mr. Pavlos Mylonas.

Pavlos Mylonas – National Bank

The conditions prevailing as a result of inflationary pressures, but also of the war in Ukraine, contribute in such a way as to reduce the growth expectations for the current year, from the previous 4% to 2.5-3% with based on current data, according to the CEO of the National Bank, Pavlos Mylonas. He estimated that achieving a growth rate of 8% in 2021, combined with the strengthening of all indicators, strong exports, but also the fall in unemployment, will help to recover a significant part in the two years 2023-2024 of previously expected growth. The non-performing loans (NPLs) of the National Bank amount to 2 billion euros today, an element that creates optimism for its future course in the market. Regarding the rate of distribution of financing to companies, Mr. Mylonas argued that the question “Why there is no more funding” is wrong, as the corresponding “Why there is no more investment by companies?” . The small size of the companies and the often slow pace of reaction and transformation of the State and its institutions contribute negatively to this.

Christos Megalou – Piraeus Bank

The CEO of Piraeus Bank, Christos Megalou, appeared optimistic about the growth prospects of our national economy, despite the intensely problematic international environment, emphasizing that the initial estimates may speak of achieving growth of more than 5% and with the updated data being around 3-4%, nevertheless moving 1.5-2% above the prevailing Eurozone average. Critical factors in this direction are expected to be the unhindered, as well as continuous financing of companies, the maximum utilization of the resources of the National Recovery Plan, but also other existing financial tools. Piraeus Bank has managed to reduce its exposure to non-performing loans (NPLs) from 44% to 12.5% ​​today, while by the end of 2022 it intends to move in single digits. At the same time, in the first quarter of this year there is no significant increase in the creation of a new generation of NPLs. Regarding the level of Piraeus Bank’s financing to businesses, Mr. Megalou stressed that in 2021 the target had been set at 5.7 billion euros, but managed to disburse loans in excess of 6.5 billion euros. This year, too, there is restrained optimism for an even better course.

Vassilis Psaltis – Alpha Bank

Alpha Bank CEO Vassilis Psaltis bases the positive outlook for the Greek economy on three pillars, as he estimates that tourism will develop at a very positive growth rate this year, the disbursements resulting from the National Recovery Plan are already taking place normally, and Private consumption – which accounts for 70% of our GDP – is expected to increase, as during the two-year pandemic crisis there has been a significant increase in savings funds. At the same time, he stressed that the systemic banks are entering the new crisis with clearly stronger balance sheets than at any other time in the past, and consequently they can maneuver under more positive conditions. In the two years 2020-21, the provision of about 40 billion euros by the State to support every aspect of the national economy (businesses, banks, employees, households), and then the auxiliary financing by the banking system, contributed to Alpha Bank managed to reduce its exposure to NPLs from 56% to 13% at the end of last year, while the goal of achieving a single-digit percentage of non-performing loans will become a reality within the In the first half of 2022, Mr. Psaltis believes that fiscal easing will continue, which will lead to substantial support for the financial strength of businesses and households. on a positive level, giving more importance to investment funds and secondarily to raising funds traffic.

Fokion Karavias – Eurobank

The economic environment in which our country is called to operate may be distinguished by a series of emerging challenges and obstacles, which will inevitably have a negative effect on the course of development, but the picture will remain manageable, according to the CEO of Eurobank. Fokion Karavias. Regarding the effort of our country to recover the investment level, Mr. Karavias points out that the conditions at the present time period are not favorable, however, intensification of efforts and coordination of all stakeholders is required from the government, the Bank of Greece, commercial banks and individual institutions, in this direction. In fact, he estimated that the recent upgrade of our country by DBRS is a positive news-indication for the future. Regarding the reduction of the exposure of systemic banks to non-performing loans (NPLs), the CEO of Eurobank described it as “impressive”, praising both the domestic financial system and the State that took care of the appropriate decisions. at the same time, he was skeptical about the possibility of a new wave of NPLs, depending on the current market data, as they emerge primarily from The commitment of financial institutions to increase their lending balances in order to boost their profitability is expected to contribute to the further increase in moving figures. plans by e companies that will contribute to the transformation of the productive model of the country.

Emerging challenges

The focus of the banking system is clearly directed towards supporting the development of the national economy, financing business investment projects, according to the CEO of the Financial Stability Fund, Ilias Xirouchakis. The improvement of the banks’ efficiency contributes to this reality, by simultaneously reducing the Non-performing loans (NPLs) and the general consolidation of their financial data, as well as the utilization of the National Recovery Plan (RRF).

THE Professor of Economic Analysis at the Athens University of Economics and Business, Nikos Christodoulakis He stressed that the domestic banking system over the past decade has managed to survive constant uncertainties, challenges and crises, an element that will seem valuable in dealing with any economic consequences of the Russian invasion of Ukraine. One thing to look out for is the uniformity that systemic banks display, as it acts as a barrier to the required leap forward. Something that can be achieved, by specializing in specific and unexplored aspects of the Greek economy, the search for value-added factors, but also the assumption of higher investment risks.

THE Financial Advisor of the Bank of Greece and Senior Fellow of Harvard Kennedy School, George Chouliarakis noted that inflation is already high and will remain so, however it is not going to trigger new inflation expectations. What remains to be clarified is the effect that the necessary contraction in monetary policy may have and the transition from an accommodative policy that has prevailed for several years to a tighter monetary logic. The possibility of Russia going bankrupt in the near future due to a number of side effects that will be caused in the international economic environment, should be taken into account in the various scenarios being considered today. At the same time, he stated that he was confident in the development and service of the Greek public debt.

The new banking environment

There are three factors that it identifies in relation to the challenges for the banking environment Nikos Christodoulou, Partner, Consulting Leader, Deloitte Greece.

As he stressed, “the customer has changed behavior, it has become demanding”, while “technology enables competitors to enter the competition very quickly”.

He noted that “banks are facing challenges, such as payments”, saying “they need to look at stores, how to turn them into organic profitability. He described data management as” an additional challenge for banks “.

Asked if the banks have won, he said “the answer is yes. Their portfolios have been largely consolidated. They are able to go to the Greek economy the next day.”

Asked to comment on the developments in relation to the digital transformation, Deloitte stressed that every 2 years it evaluates the digital maturity of the banks, adding that “Greek banks score very well – they have taken important steps”.

Continuing on the next day for digital maturity, he stressed that there are two major challenges: 1) Mobile banking which is just as important as web banking and 2) Sales through digital channels.

Deloitte has done a study on “The Bank of 2030” and commenting on it, pointed out that “the main conclusion is that the big banks will maintain a significant market share”, adding that we are going to “platforming” where there are distinct roles.

Read also:

* F. Karavias (Eurobank): These are the effects of the crisis

* Piraeus Bank: Net credit expansion of 1.3 billion euros in 2022

* Vassilis Psaltis (Alpha Bank): The 5 goals for 2022 and dividend from 2024

* P. Mylonas: These are the goals of the EIB for the three years