The “great joys” in the banking system, the dark Mrs. Buch and the sudden … love of moody’s.

Undoubtedly news from domestic banks and especially after the successful sale of the Piraeus package by the TCS has gained the attention of the domestic and international markets, lately. And not unfairly, if you stay in the “nomera” that concerns their profitability, but also the change of attitude of international investment interest in them. Of course, as Moody’s latest flattering report on Greek banks points out, the main cause of their profitability is due to the Greek depositors and the ECB’s… bluedom. In other words, the very large difference between the ‘cost’ of ‘renting’ of funds from deposits and ‘profit’ from the provision of these funds to corporate loans and overnight deposits to the ECB. The numbers recently released by TTE and stressed by Moody’s special emergency report are impressive. Specifically, the weighted average interest rate at which Greek banks lend (not so much to households but to enterprises involved in the major projects of the NSRF and the Recovery Fund) is 6.15%. And how much does that cost them in deposits? Just 0.53%, which means they work on the market with a net margin of interest (medium rate) “wins” 5.62%… You can’t find this elsewhere in the Eurozone. The respective margins between deposits and outstanding loans just over 5.8% in January, higher than the corresponding 5.67% of 2023, as Moody’s report emphasises. And is that a bad thing? If they can do it the benefit is very strong for their balance sheets and why not their dividends if they say OK, SSM. And this is where, like, the… difficulties start. Because SSM and the lady who replaced the liker in the Greek banking system Italian Andrea Enria, clapping about the unprecedented as they recall improving the domestic banking system, as within a few years after the largest in the history of the system (!) public debt restructuring worldwide. To remind us again that the “cost” of survival of Greek banks through the millstones of restructuring has hit in many places both the public and private sectors. Tens of billions of euros lost to state “recapitalisation”, tens of billions of euros “deleting” capital from insurance funds reserves, etc. And yet they followed as expected huge volumes of ‘red loans’, which needed special tools to discharge their balance sheets through the ‘hero’ Hercules I and II and III, as well as the special treatment from the public through the ‘postponed tax’ that was baptized in ‘own funds’. And with Hercules he “cleaned” most of the Npls and Npes, (the “copros” was not lost, he just went to other fields and was named … fertilizer), but some of them are still pending for clearing. Also the notorious ‘postponed taxes’ at some point must be paid, says SSM. And when is the best time to pay, if not now, when depositors still allow such high profitability, SSM insists. Yeah, but what about the dividends they expect how and how the shareholders just heard of profits? And especially a category of strong shareholders who expect that and how to repay, at least a part of their investment “loss” to date. “They shout” rather than unfairly, the well-known foreign investors who supported the banks’ administrations to get this far… Does SSM say dividends or improve equity? And it gives – unofficially – the answer, that it wants to see even greater improvement in equity and to clean up outstanding situations such as deferred taxes, because the international environment has begun to re-enter a phase of high turbulence. Somewhere the balance has to be found answer the high standing banking executives, because these old and… miserable shareholders may lose their patience and their good words to date. The prices that have recently begun to “sell” the TCS seem to put many of these old shareholders in temptation… So at least it is heard from some “sacred” corners of the banking system. These are heard by so-called “careful” investors in the HA and take a step back until the horizon is clear. It seems that the environment becomes particularly interesting in the banking system, both within and outside Greece. And will one say and who cares about what happens in the banking system except for the big players on the field to make it such a big deal? It is not exactly so because what Moody’s will do in mid-March and the other Assessment Houses in 2024 with Greek debt in terms of upgrading or “freezing” until further notice, have much to do with whether the capital “upgrade” of Greek banks, systemic and non-. Let us not forget that the upgrade to investment grade was only able to take its first step when Hercules I and II showed in practice that they could work on the bank balance sheets. If that hadn’t happened, the non investment grade would still be with us… So be careful what we say and what Mr. Henria’s successor hears, the very strict – by temperament – Mrs. Claudia Buch.