ECB: Greek banks may pay dividend if conditions met

Bloomberg

The European Central Bank (ECB) wouldn’t object to a dividend payment if Greek banks prove they can fulfill all supervisory demands even under an adverse scenario, said Andrea Enria, head of the ECB’s Supervisory Board.
If the banks “are able to remain above all our supervisory tripwires, let’s say, requirements and buffers, including a payment of some distributions, we would not, in general, object” to a dividend, Enria said in an interview with Kathimerini newspaper.
The banking sector overall is in a much stronger position than it used to be, Enria said, adding, “the capital position of the banks is very strong.”

The ECB needs to be assured that the banks can be “sufficiently profitable to generate a sufficient amount of resources in the coming years to remunerate the shareholders and to maintain the capital trajectory on a safe path,” Enria said following a visit to Athens for meetings with bankers and policy makers.
Greece has exited a decade-long debt crisis that created a huge amount of non-performing loans. The country’s lenders have massively reduced the NPL ratio in the past two years, but there’s still some way to drop to European average.
The banking sector overall is in a much stronger position than it used to be, Enria said, adding, “the capital position of the banks is very strong.”
Enria also spoke on the benefits of bank mergers as a way to hasten a “radical rethinking of the business model” at a time the European banking sector still has “some excess capacity.”
“Banks which have pursued this avenue have sometimes also been very effective in reshaping their IT infrastructure, serving their customers better, and being more profitable,” he said.