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Economy

Greece’s Eurobank Sees Profits Jump 69.4%, Rising Through 2026

ATHENS – After offloading bad loans to collection agencies and receiving €50 billion ($54.62 billion) in state bailouts, Greece’s banks have returned to profitability, with Eurobank’s revenues rising 69.4% in 2023 to €1.47 billion ($1.61 billion).

The bank projects revenues to reach €1.6 billion ($1.75 billion) by 2026. “In a lower interest rates environment, Eurobank aims to generate resilient returns to shareholders, which will be further enhanced by the full integration of Hellenic Bank in Cyprus,” it stated.

Eurobank also announced that the payout ratio will gradually increase to about 50% of profits in 2026, up from about 25% this year, according to Reuters. Greek banks have been actively reducing their pile of non-performing credit.

Greek banks faced turmoil during the 2010-18 economic and austerity crisis, burdened by a mountain of bad loans resulting from significant pay cuts, tax hikes, pension reductions, and layoffs.

Bad loans were sold off to so-called vulture collectors, who continue to pursue debtors for repayment, acquiring non-performing loans at a fraction of their value and escalating interest rates to recover their investment.

The non-performing exposure ratio decreased to 3.5% at the end of 2023, down from 5.2% in 2022. Net interest income reached €2.17 billion ($2.37 billion) in 2023, marking a 47% annual increase, driven by high interest rates and a recovering Greek economy.

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