The four systemic banks (Eurobank, National Bank, Piraeus Bank, Alpha Bank) and the Bank of Cyprus are on track to exceed their profitability and net credit expansion targets. Maintaining the advantage of a higher corporate lending growth rate and a high net interest margin compared to European banks, combined with low deposit costs and strong efficiency, Greek and Cypriot banks are simultaneously developing digital banking services. At the same time, the acquisitions of insurance companies increased non-interest income in some cases by up to 32 to 39 percent, diversifying their profitability. Overall, the return on tangible equity of the banks ranges between 14.5 and 18.9 percent, at levels completely comparable to peer banks in southern Europe including Spain and Portugal. The differentiating factor compared to the past is that distributions to shareholders have simultaneously increased further to over 55 percent, resulting in the attraction of increasingly long-term investment capital, also driven by the upgrading of the stock exchange in Greece or the economy in Cyprus.
However, from recent nine-month results and analysts' questions regarding Greece and Cyprus, mild reservations were expressed by Eurobank and Bank of Cyprus management teams regarding the loan growth pace for 2027, as the high rates of the 2025 to 2026 period subside somewhat. On the other hand, forecasts for coming years indicate major investments in energy, infrastructure, and tourism that will offset the loss of Recovery Fund funds, which will continue to feed the economy for the next two years. The share of Recovery Fund loans relative to total loans stands at just 20 percent. A separate highlight of bank fee income is the growth of the asset and wealth management sector, which is gradually increasing both in Greece and in financial centers like Luxembourg through the creation of subsidiaries by Greek banks.
Eurobank
Eurobank reported the highest net profit at 1.16 billion euros, corresponding to a strong return on tangible equity of 16.9 percent. Due to its larger international presence in Cyprus and Bulgaria, the bank posted the highest credit expansion of 3.8 billion euros, up 10.5 percent. Interest income reached 2 billion euros and net fee income stood at 630 million euros. The CET1 capital ratio stood at 15.5 percent, non-performing exposures at 2.4 percent, and the cost-to-income ratio at 35.8 percent. The interim dividend amounts to 240 million euros or 5.99 cents per share, representing a 27 percent increase. For 2026 earnings, the target is to distribute 55 percent of profits.
Alpha Bank
Alpha Bank reported net profits of 766.1 million euros, corresponding to an improved tangible return of 14.5 percent and 15.5 percent in the third quarter. Net credit expansion reached 2.6 billion euros, up 13.1 percent. Interest income reached 1.3 billion euros while fee income increased by 32 percent to 483 million euros, reflecting the increased contribution of recent acquisitions. The CET1 capital ratio stood at 14.5 percent, non-performing exposures at 3.8 percent, and the cost-to-income ratio at 37.8 percent. The interim dividend amounts to 124 million euros and will be distributed in December. On an annual basis, the target is the distribution of 55 percent of profits.
Piraeus Bank
Piraeus Bank recorded a net profitability of 893 million euros with a return on tangible equity of 15.4 percent. Net credit expansion reached 2.2 billion euros, up 8 percent. Piraeus Bank recorded the highest increase of 39 percent in fee income, amounting to 679 million euros. The non-performing exposure ratio has decreased to 2 percent, the CET1 capital ratio stands at 12.9 percent, and the cost-to-income ratio at 33 percent, the lowest among Greek banks. The interim dividend will amount to 124 million euros or 0.10 euros per share.
National Bank of Greece
National Bank recorded net profits of 1 billion euros, corresponding to a return on tangible equity of 15.7 percent. Adjusted for excess capital, the return stands at 20.7 percent. Net credit expansion reached 2.2 billion euros, up 13 percent. Interest income reached 1.68 billion euros and fee income stood at 371 million euros. Non-performing exposures stand at 2.4 percent, the CET1 capital ratio at 17.5 percent, and the cost-to-income ratio at 34.4 percent. The interim dividend will amount to 230 million euros or 0.26 euros per share.
Bank of Cyprus
Bank of Cyprus reported net profits of 383 million euros for the nine-month period. The profits correspond to a return on tangible equity of 18.9 percent, the highest among Greek and Cypriot banks. Interest income reached 565 million euros and fee income stood at 137 million euros. Nine-month net credit expansion reached 2.4 billion euros, up 9 percent. Non-performing exposures stand at 1 percent, the capital ratio at 20.6 percent, and the cost-to-income ratio at 36 percent. The interim dividend amounted to 105 million euros or 0.24 euros per share, which has already been distributed. The annual target for the payout ratio is 70 percent plus an additional 20 percent.
Dimitris Pafilas
dpafilas@yahoo.com
www.bankingnews.gr
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