Greek Banks Aim for €10 Billion Loan Expansion Despite Rate Cuts
As Greek banks navigate the challenges of a reduced interest rate imposed by the European Central Bank (ECB), their strategic goals now notably include a robust expansion of their loan portfolios to sustain profitability. Despite the bleak climate of lower interest rates, these banks have ambitiously set targets to bolster their credit offerings, anticipating significant growth in the coming years. Notably, Greek bankers recently set a clear objective during an investment conference in London: a substantial €10 billion in new loans by the year 2025.
Focusing on maintaining high profitability levels through credit expansion, the four systemic banks—Piraeus Bank, Eurobank, Alpha Bank, and National Bank of Greece—are projected to exceed €6 billion in net credit expansion for 2024 alone. This tenacious pursuit of growth is backed by achievements from January to September 2024, where there was already a cumulative increase of €5.7 billion in loans. Furthermore, there is a fervent outlook that credit growth will reach between €7 billion and €8 billion by the end of the year, as the economic recovery in Greece and increased corporate lending play a pivotal role in this ambitious drive.
International agencies have acknowledged the positive influence of Greece’s economic recovery on the banking sector, emphasizing the significant benefits of rising corporate lending. Hence, Greek banks are leveraging these favorable conditions to significantly expand their loan portfolios, seeing this strategy as a fundamental driver of profitability in a low-interest-rate environment. The clear trend of robust credit expansion adopted by Greek banks indicates a proactive approach to counter the impacts of the ECB’s interest rate cuts by focusing on lending growth to secure future profitability.
