Growth seen in bank loans, economy but Greece must reform - CEOs

The heads of Greece’s four systemic banks have forecast a strong recovery for the country’s economy after the pandemic, with growth rates higher than the European average in coming years due to funds from the Recovery Fund and the resurgence of loans from the financial system.

The positions of CEOs from National Bank, Piraeus Bank, Eurobank and Alpha Bank , on the panel on "The Greek Capital Market and the Banking Sector: Outlook & Prospects" of the 10th Greek Investment Forum, organized by the Athens Stock Exchange and the Hellenic-American Chamber of Commerce, reflect the change in mood of the Greek economy and the banking system, in two ways:

1. As far as the economy is concerned, the debate is shifting from defense tactics amidst the pandemic to growth with the Recovery Fund being the main lever, fuelling investments.
2. In regards to the banking system, concerns about non-performing loans from the previous crisis are gradually easing and bankers are focusing on the key role that the banking system should play in financing the economic recovery and the utilization of resources of the Recovery Fund.

Reforms crucial

National Bank CEO Paul Mylonas also stressed the importance of Greece keeping up reforms, adding that there are four main pillars of changes that should be implemented.

According to Mylonas, the government has identified, through the Pissarides report, the key areas in which it is necessary to carry out reforms in coming years. As he pointed out, while Greece has already implemented several reforms in recent years, there are others that are necessary to increase inflows of investment capital.

The first field concerns reforms that will strengthen the competitiveness of Greek products. Another very important area relates to the shadow economy which continues to be a large part of economic activity, weighing it down. The third necessary reform concerns the efficiency of the public sector and the need to boost digital services. Finally,. Mylonas stressed the need to reform the judicial system in order to achieve faster delivery of justice.

Asked about the profitability of banks and how it can be further strengthened, Mylonas stressed that the key is not only the ideas and directions that we all know and follow, but also the way we will develop and implement them.

For Greek banks in particular, the CEO referred to the prospect of recovering non-performing exposures, to the digitization of services as well as the development of deposit and bank insurance products, which may lead to a double-digit increase in commission income. He also referred to the utilization of the large amount of data collected by banks and gives them a competitive advantage in offering new services.

He added that National Bank has been implementing a comprehensive transformation program for the past three years, which is proving to be extremely successful and, in combination with other measures, such as reducing problem loans, is making a significant contribution to improving its financial performance.