Greek banks change page and attract international investment funds

The Greek turn page, as the cycle of recapitalizations in the Greek banking system closes. Banks pass into the private sector, as there remains the sale of 18% of the National Bank of Greece, which is planned to take place in the summer, on the other hand 70% in the Bank of Attica. At the same time the banking industry enters a period with a view to serious profitability and with a dividend promise after over a decade. The improved resilience of the banking sector, the good performance of the Greek economy and the recovery of the investment tier have led to an increase in investment disposal, allowing the HFSF to almost complete its divestment from systemic banks The performance of Greek banks attract high investment interest, with systemic banks as a “magnet” of international investment funds, having raised bids of more than EUR 25 billion through the divestment process, but also through bond issues. Placement in the National and Piraeus Nationals gathered the high interest of the international investment community, giving “a vote of confidence” to the Greek banking system and the Greek economy in general. The success of the allocation of the share ratio of Piraeus’s TSW (27%) can now be recorded as a benchmark for both Greek and European data. The total amount collected in the international and Greek books totaled 10.7 billion and even the maximum range of 4 euros. At the same time the largest historical privatisation through secondary placement with the price level reaching 1.35 billion euros is recorded. In the case of the National Bank, the 22% divestment of the EFSI raised 8 billion with the total price of EUR 1,067 billion. The successful cycle of the EFSF’s divestments by systemic banks began with Eurobank and Alpha Bank. Eurobank purchased 1.4% of the EFSF’s share at the price of EUR 1,80 per share, with the total gross income of the EFSF from the transaction amounting to EUR 93.7 million. Alpha Bank became the second fully privatized bank, as the HFSF accepted the one single offer, that of UniCredit for its purchase of around 9% against 293.48 million ECU. The increased interest of foreign portfolios in Greek banks is also reflected by their strong presence in their latest bond issues. The National exit to the markets through a 5-year senior preferred bond issue raised bids over 2.4 billion over 200 investors overtaking the issue by more than 4 times. The publication of Piraeus (10 years of Tier 2 bond), was overtaken more than three times by raising funds over 1.8 billion with the participation of more than 145 institutional investors. The Eurobank 10-year bond auction was completed 6 times, while the bids reached 1.8 billion ECU. The sizes of 2023 The net profits of the four systemic banks in 2023 amounted to 3,645 billion euros reduced by 2.38% annually. In 2022 the profitability of the four systemic banks had formed EUR 3,734 billion, after tax, against losses of EUR 4.8 billion in 2022. The National Bank presented in 2023 net profits of €1,106 billion from 1,120 in 2022, Alpha Bank profits of 611, 3 million (+65.9%), Eurobank of €1,140 billion from 1.347 billion and Piraeus profits of 788 million from 899 million in 2022. The four systemic banks in 2023 showed net interest revenues of 8,093 billion euros, 2.717 billion euros more than the 2022 use (+50.54%). The National Bank achieved net interest income of 2,263 billion (+65%), Piraeus 2,003 billion (+48.04%), Eurobank 2,174 billion (+46.09%) and Alpha Bank of 1.653 billion euros (+40.9%). At the same time net commission revenue for the four banks amounted to EUR 1.845 billion from EUR 1.715 billion in the previous year (+7.58%). Banks continued to reduce the index of non-performing exposures (NPEs) the previous year. Regarding the NPEs index, the National reduced the index to 3.7% of loans from 5.2% in 2022, Eurobank to 3.5%, from 5.2%, Piraeus to 3.5% from 6.8% and Alpha Bank to 6.0% from 7.8%. The dividends The banks now have the ability to reward their shareholders by announcing that they will proceed to distribution of dividends after over a decade, provided that the “green” light is also given by SSM, which is expected to happen within April. Eurobank CEO Fokion Karavia estimated a dividend distribution of about 9 cents per share and distribution of at least 25% of 2023 profits. Alpha Bank CEO Vasilis Psaltis announced the distribution of 25% dividend on an annual basis in 2024-2026, while for this year he reiterated the commitment to distribute 5 cents per share from the profits (20%) of 2023 under the authority of the Supervisor. In Piraeus, the management “sees” a dividend distribution of 10% of the profits of 2023, 25% of the profits of 2024 and 50% of the profits of 2025 and 2026, while the National will ask the Supervisor to approve a dividend of 25-30% of the profits of 2023. SOURCE: RES-BE