Greek banks ride a wave of optimism
Euromoney, is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024
Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

Greek banks ride a wave of optimism

This year’s dovish turn in global monetary policy is difficult for most eurozone lenders, but it’s propping up Greek banks, spurring demand for NPL sales; but if these banks return to normality and grow their loan books, negative rates could still end up causing them pain.

Kyriakos Mitsotakis_780

Business confidence has soared after the election of a new centre-right government led by Kyriakos Mitsotakis

After more than a decade of struggle, Greek bankers are at last daring to believe that – this time – their country and financial sector has begun a recovery that lasts.

While the sector in Europe has struggled to recoup its 2018 losses, Greek bank shares have risen by about 50% this year. And to listen to the banks, this is just the beginning. After all, their shares still trade at a discount to book value of about 60%, compared with typical discounts of around 15% across Europe.

By the early 2020s, Greek banks think they will reach a similar rate of return on equity as their European peers, something approaching 10%.

Gradually, interest in the country and its banks is beginning to spread beyond the hedge fund community – and it’s no longer all about the risk Greece poses to the international economy.

“Investors feel we have turned a corner,” says the head of investor relations at one of the big four Greek banks.

Gift this article