Next year will belong to the country’s banks, as according to the presentations that their officials have been making to foreign investors in view of the share capital increases, 2015 will see positive credit expansion, a reduction in nonperforming loans and strong profits.
Provided that the estimates for the country’s economic rebound prove correct, 2015 will be the first year of clear growth for local lenders after the start of the credit crisis in 2008 and the country’s fiscal derailment in 2010.
This week, with the completion of National’s share capital increase, a very intense period for domestic banks came to an end, as within just a few weeks they drew an estimated 10 billion euros in capital and cash from international markets.
In recent weeks the officials of Alpha, Piraeus, Eurobank and National toured the United States, Asia and Europe ahead of their capital-boosting processes and identified great investor interest that was later illustrated in the purchase of shares and bonds.
There are three main fields that bank officials expect major progress in next year:
Profits: This year will be the year of stabilization for banks. National and Alpha are expected to show a positive balance while Piraeus will have a marginal net result. Eurobank will be the only systemic lender to post losses. In 2015 all banks will show significant profits, at a growing rate, while from 2016 onward earnings are expected to reach high levels.
Credit expansion: On an annual basis 2014 will see a 3 percent contraction in the issue of credit, as the first half of the year will be negative, the third quarter will show stability and the October-December period will witness a small increase in the loans balance.
Nonperforming loans: Banks expect bad loans to culminate this fall. Depending on the course of gross domestic product, banks estimate that either the last quarter of 2014 or the first of 2015 will see the level of NPLs begin to decline. A reduction in bad loans is crucial for the sector as it will release resources for the funding of the economy and boost earnings.