The SSM is focusing its 2024 bank audits on three pillars. Along with the interest rate risk, the supervisor of the systemic banks focuses on two more issues: cyber security and the course of restructured loans, which is extremely important for Greek banks.
The first and main audit that the SSM conducts in European banks concerns the interest rate risk, which may change the data of European credit institutions as well as their plans for profit returns to their shareholders.
In Greek banks, the interest rate risk audit has already begun, aiming to record how much the profits of credit institutions will be affected amid the imminent reduction of interest income.
According to a recent report by Naftemporiki, the profits of the banks (systemic) are expected to be affected by 600 million euros in the next two years, and the Greek banks are looking for other sources to replace these incomes. However, they believe that the credit expansion to be achieved by the drop in interest rates, the development of activities abroad and higher commissions in sectors such as cards and real estate, could guarantee extremely high levels of profitability.
However, the SSM seems to want to put a brake on the maximalist plans of European banks to distribute high dividends to shareholders. The Greek banks have talked about dividends which will range between 10%-25% although based on their prospects they may move even higher.
In Greece, the audits are even more targeted, since bank funds contain deferred taxation. In Eurobank, the deferred tax represents 47% of the bank’s funds, in Alpha and National Bank 58% and 76% in Piraeus Bank.
Despite the fact that the supervisor cannot prevent Greek banks from proceeding with the distribution of dividends amid high profitability, more conservative policies are recommended.
