Forecast: Robust Profitability of €4.7 Billion for Greece’s Systemic Banks in 2025

The systemic banks of Greece — National Bank of Greece (NBG), Eurobank, Alpha Bank, and Piraeus Bank — demonstrated strong profitability in their Q2 2025 results, with forecasts pointing toward full-year net earnings of approximately €4.7 billion, approaching the €5 billion mark.

Strong Credit Expansion Driving Earnings

Banking credit operations remain exceptionally strong, with credit expansion estimates surpassing €13 billion by year-end. This robust activity is being powered by both corporate lending — notably due to RRF (Recovery and Resilience Facility) funds — and external loan portfolios, particularly for Eurobank.

systimikes trapezes

Credit Expansion Forecast (2025): €13–14 billion net new loans

While corporate credit has surged, mortgage lending appears subdued, held back by high property prices and weakened household incomes.

Dividends Reflect Confidence and Capital Strength

All four systemic banks declared interim cash dividends, aligned with international practices, underlining strong earnings and capital buffers.

Dividend Payout Ratios (Interim 2024):

• NBG: €260 million (20% of profits)
• Piraeus Bank: 10% of profits
• Dividend Yield: Between 1.2% and 2.4%

The National Bank of Greece left open the possibility of distributing a final dividend that could exceed 60% of total annual earnings.

High share prices have led some banks to temporarily pause share buyback programs, which may resume later in the year.

Interest Income Resilience

Despite expectations of rate cuts in September, banks report strong and stable net interest income (NII) due to the structure of deposits:

• 80% of household savings deposits in Greece are held by NBG.
• Deposit base: Heavily skewed toward sight and savings accounts with zero or minimal yield, preserving interest margins.
•  Forecast for ECB rate cuts: No drop below 1.5% expected.

High Profit Momentum Supported by Interest and Fee Income

Greek banks are seeing a profit surge fueled by resilient net interest income and increased fee and commission income.

• Projected 2025 Total Profits: €4.7 billion
•  YoY Profit Growth: Significant uplift over 2024 results
•  NII Contribution: Over 70% of total income in some banks

The better the banks perform on interest income, the stronger their profit outlook for 2025.

Capitalization, M&A Outlook, and Strategic Focus

All four banks reported robust capital ratios, with NBG again posting the strongest capital adequacy metrics.

CET1 Ratios (Q2 2025):

• NBG: 17.5%
• Eurobank: 16.2%
• Alpha Bank: 15.8%
• Piraeus Bank: 15.1%

Mergers & Acquisitions (M&A) Strategy: Diversified Paths

• NBG: Continues to explore M&A, but offers limited disclosure for now.
• Alpha Bank: Pursues strict investment criteria, requiring
  • >15% return on equity (RoE)
  • Positive EPS contribution within 2–3 years
  • No disruption to dividend policy
• Eurobank: Focused on banking, insurance, and asset management, mainly outside Greece.

   Particular interest in Bulgaria, amid banking market consolidation.

• Piraeus Bank: Prioritizes the completion of the National Insurance deal and stabilizing capital via Danish compromise instruments.

Conclusion: Stability and Sustainable Growth

Greek systemic banks are entering 2025 with momentum, backed by:

• Strong credit expansion
• Resilient interest income
• High dividend capacity
• Healthy capital levels

This marks a return to normalcy, strengthens shareholder value, and reaffirms long-term trust in the Greek banking system.

Source: pagenews.gr