Newsletter September,2023,09


Also in this issue:

Greek banks poised for rapid recovery, new role in financing growth

Greece’s four major lenders – National Bank of Greece, Eurobank, Piraeus Bank and Alpha Bank – have entered a new era with strengthened balance sheets and a favorable business environment that will position them to help finance the country’s future economic growth.

In the past year, strong profits, sharply reduced bad loans, and a helpful interest rate spead have put a new spotlight on Greek banks. The four lenders could soon resume paying dividends after more than a decade, and are on track to exit the special government support program that represents the last vestiges of the country’s sovereign debt crisis.

Earlier this month, DBRS Morningstar, one of the four rating agencies the European Central Bank recognizes in its Eurosystem operations, returned Greece to investment grade status. This means that Greek banks will now be able to better leverage Greek bonds as collateral with the ECB for refinancing operations. While, also this month, ratings agencies Moody’s and Fitch both upgraded Greece’s four systemic banks, reflecting their improved operating environment.

Investors have noticed: investment banks JP Morgan, HSBC and Morgan Stanley all have an overweight stance on Greek bank stocks. And since the start of the year, the Athens stock exchange banks index is up 65%, helping to support a broader market rally in Greek equities.