ECB to approve Greek banks’ request to resume dividend payment after 16 years, sources say

By Thomson Reuters Jun 5, 2024 | 8:00 AM

By Lefteris Papadimas

ATHENS (Reuters) – The European Central Bank is expected to approve a request by Greek banks to resume the payment of dividends after 16 years, four bankers told Reuters on Wednesday, a further sign of the sector’s rebound.

The Greek banking sector is returning to normality after three recapitalisations that led to their nationalisation in the previous decade, when the country was rocked by a financial crisis that broke out in late 2009.

In recent years, banks have cut their Non-Performing Exposure (NPE) ratios to below 6% from 45% in 2016 and have reduced state participation. They have turned profitable and want to distribute dividends worth up to 30% of the 2023 profits.

Their business plans, which include the dividend distribution request, were submitted to the ECB earlier this year.

Senior bankers told Reuters that the ECB will respond positively in the coming days to their request.

“We don’t expect any obstacles over the distribution of dividends, we expect to get the green light from the ECB in the coming days,” one of the bankers told Reuters on condition of anonymity.

An ECB spokesperson declined to comment.

Greece’s four biggest lenders — Eurobank, National Bank, Piraeus Bank and Alpha Bank — have announced total profits of about 3.5 billion euros in 2023 supported by high interest rates and strong economic growth.

“We expect strong net profits for this year too, particularly if the ECB’s interest rate cuts are fewer than initially expected,” a second banker told Reuters, echoing the view that the ECB was expected to approve the dividend payment request soon.

Two more bankers with knowledge of the issue added that Greece’s strong economic rebound and high yields were helping boost profits.

(Editing by William Maclean and Hugh Lawson)