After being urged by Bank of Greece Governor Yannis
Stournaras, the European Central Bank (ECB) is reportedly poised to let the country’s Big four
banks pay dividends when supervisors take it under consideration in June.
That was reported by POLITICO,
citing unnamed Greek banking sources who said the banks will be able to pay out
€840 million as the financial institutions have come back to big profitability.
The country’s banks had to be bailed out
with €50 billion during a 2010-18 financial and austerity crisis that also saw
them under a mountain of bad loans since sold over to collection agencies
hounding people to repay.
If approved, it would be the first time in
15 years that bank shareholders could cash in on their investments, another
Greek banking source also not identified told Pro Morning Central Banker (MCB)
Europe.
National Bank of Greece payouts will be
capped at 20-25% of the lenders’ 2023 profits, Piraeus Bank is expected to
return 10% of its profit to shareholders, Alpha Bank 20%, and Eurobank 25%, all
in line with the banks’ own guidance, the source said.
National Bank of Greece shareholders will
have to lower their expectations, as the ECB is only likely to let it pay out
25% of its profits, below the 30% the bank guided for in March.
The payouts of the four systemic lenders
will be smaller than for most of their European peers, as the supervisor still
has concerns about the quality of their capital. Around 40% of the groups’
capital is in the form of deferred tax credit (DTC), which the ECB sees as
lower-quality equity, said Business Daily Greece.
Earlier, Stournas told Yahoo Finance in an
interview in Frankfurt – the ECB’s home – that the recovery of Greek banks has
to be acknowledged. “It’s the time to allow dividends,” Stournaras said. “This
decision and the exact parameters will be taken later in the year — in June.”
“We all know the constraints, but nobody
can deny the huge improvement in the NPL (Non-Performing Loan) situation, the
profitability situation, the capital metric situation, the liquidity
situation,” he said. “The time has come for the supervisors to consider
allowing the shareholders of the banks to get some dividend.”
Original Story: The National Herald
Edition: Prime Yield