Greek banks step up efforts to broaden shareholder base

Greek banks are seeking to capitalise on a series of recent positive developments, with their management teams stepping up meetings with foreign investors.

The Athens Stock Exchange’s return to developed-market status will affect the four systemic banks as they will be included in the FTSE All-World and STOXX Europe 600 indexes, broadening their potential investor base. On Tuesday, Moody’s upgraded the outlook on the credit profiles of Eurobank and National Bank of Greece, changing the outlook on their long-term deposit ratings to positive from stable and that on their senior unsecured debt ratings to stable from negative. The agency kept the respective ratings at Baa1, linking the moves to its recent change in the outlook on Greece’s sovereign rating.

Following the recent developments, a significant increase in the participation of developed-market investors, who had not previously considered Greece part of their investment targets, has been recorded. Meanwhile, Greek banks participate in meetings with investors showcasing their strong profitability, solid capital buffers and the prospect of higher shareholder distributions.

The four systemic banks have confirmed that they will pay interim dividends from their 2026 earnings, with the payments expected to total at least €600 million in the final two months of the year. This represents another significant return of capital, following around €1.1 billion paid in cash earlier this year from 2025 earnings. Management teams have set distribution targets of around 55% of 2026 earnings, while further increases in payouts in the coming years will depend on profitability, capital generation and regulatory requirements.

The next phase

The key issue in investor meetings, however, is what comes next. At Bank of America’s financial services conference in London, investors are seeking answers on whether strong credit growth can be sustained after the Recovery Fund is completed, as well as on the outlook for mortgage lending and competition in corporate financing. They are also focusing on the new mix of growth and profitability following a period of strong support from European funds.

Bank management teams argue that credit growth is no longer dependent solely on the Recovery Fund, as projects already approved continue to be implemented, while expected investment activity, a return to positive growth in mortgage lending and the use of European financing tools are creating a new pipeline. Net credit expansion at the four systemic banks reached around €8.5 billion in the first half, with full-year 2026 estimates pointing towards €15 billion.

Eurobank’s investor feedback is indicative, with the bank’s management holding around 60 meetings with investors in London. In addition to credit growth, investors are focusing on fee income, particularly insurance and wealth management, spreads, deposits, capital and acquisitions, while interest in artificial intelligence investments is also increasing. Growing fee income is a key pillar of the banks’ new strategy, with net fees and commission income at the four systemic banks reaching around €1.4 billion in the first half, up 23% year-on-year.

The interest-rate outlook is also back in focus, with investors assessing the sensitivity of net interest income, the evolution of spreads and competition for deposits. Expanding fee income is therefore becoming increasingly important, reducing banks’ reliance on the path of monetary policy for earnings growth.

Piraeus Bank faced similar questions during its recent meetings in New York. In addition to the sustainability of credit growth, investors focused particularly on the integration of Ethniki Insurance, cross-selling opportunities, the recovery in mortgage lending, corporate lending margins, the sensitivity of net interest income to interest rates and future distributions.

A recent meeting between Deutsche Bank and Alpha Bank’s management highlighted the continued strong momentum, demand for loans from the Greek economy and the absence of any material deterioration in asset quality, alongside pressure on corporate lending margins, retail fees and operating costs.

The renewed investor interest is not limited to the banks’ performance, however, with foreign investors also pointing to the limited depth of the Greek equity market, where much of the interest is concentrated in banking stocks. The positive story about Greek banks is therefore unfolding at a time when they are being called upon to meet the higher expectations associated with developed-market status, amid rising uncertainty in global markets, as inflationary pressures and the prospect of higher interest rates darken the autumn outlook.

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