Opposition party PASOK has proposed imposing a one-time tax on Greek banks following their strong profit performance during the first nine months of 2024.
The performance of the four systemic banks – Alpha Bank, Eurobank, National Bank of Greece, and Piraeus Bank – has led to increased earnings forecasts and dividend payouts for the year. They are collectively projected to achieve net profits of €4.5 billion in 2025.
During the January-September period, the four banks recorded combined profits of €3.49 billion, a 22.66 percent increase compared to €2.85 billion during the same period last year.
This has led to accusations of profiteering, especially when other sectors or individuals struggle financially. Socialist PASOK, now Greece’s main opposition following the demise of SYRIZA, is calling on the government to impose a one-off levy on the banks’ profits.
PASOK leader Nikos Androulakis, in a post on social media on Tuesday, stated: “Now that the banks have entered a phase of strong profitability the time has come for a portion of these benefits for the banking system to also go to the Greek taxpayer.”
Androulakis noted that the Greek state had contributed more than 38 billion euros for the restructuring of the banking system, while it also handed over the management of the Recovery Fund loans to the banks.
“PASOK is undertaking a significant political initiative with the submission of an amendment for an extraordinary levy of 5 percent on bank profits. Profits that derive from the low deposit rates, high loan rates but also high fees and commissions for the citizens’ everyday transactions,” PASOK’s leader said.
Additionally, he made it clear that “the extraordinary levy does not only have a revenue-raising character. It primarily arises out of our strong political will to end the oligopolistic practices that make the everyday life of the Greek people difficult. A will that the New Democracy government lacks.”
Mitsotakis rejects tax on Greek banks’ profits
In Greece there is mounting public frustration over high bank fees, limited credit availability and deposit rates that lag significantly behind European averages.
Prime Minister Kyriakos Mitsotakis has reportedly ruled out imposing an extraordinary tax on bank profits.
Speaking at a conference organized by Morgan Stanley and the Athens Stock Exchange in London on Monday, the prime minister reportedly assured investors in a private meeting that his government has clear objectives for the banking sector and the means to achieve them. “Extraordinary taxation of banks is not one of those measures,” he was quoted as saying.
Despite ruling out extraordinary taxation, Mitsotakis underscored his government’s expectations for banks to play a more proactive role in supporting the economy.
He urged lenders to expand mortgage offerings, particularly those with fixed rates, to address the country’s housing affordability crisis. Currently, Greek banks offer fixed-rate mortgages starting at 2.9 percent, with substantial ancillary fees often discouraging borrowers.
The government is also pressuring banks to reduce transaction fees, which have become a significant source of public discontent. While some institutions offer bundled services with low monthly costs, many fees remain prohibitively high for routine transactions.
Rating of Greek banks upgraded
In September Fitch Ratings upgraded the credit ratings of Greece’s four systemic banks, the National Bank of Greece, Piraeus Bank, Alpha Bank, and Eurobank. This upgrade reflects the improved assessment of Greece’s operating environment, now rated at ‘BB+’.
Specifically, Fitch upgraded the credit ratings of the National Bank of Greece and Eurobank to BB+ from BB, and the ratings of Alpha Bank and Piraeus Bank to BB from BB-. All four banks have been assigned a positive outlook.
“We expect the Greek economy to continue to outperform the eurozone average. Paired with falling unemployment and the deployment of the country’s Recovery and Resilience Fund, this should support banks’ ability to capture profitable business opportunities,” said Fitch.
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