Cyprus, Greek banks shift focus from rates to growth after strong H1

Economy bankscyprusGreeceTop News Cyprus, Greek banks shift focus from rates to growth after strong H1 Relevant News Cyprus, Greek banks shift focus from rates to growth after strong H1 18 August 2026 New decree to target support for energy-poor households in Cyprus 18 August 2026 Cyprus drafts first law to regulate AI 18 August 2026 Theano Thiopoulou 18 August 2026 FacebookXWhatsAppEmailPrintViber Major Greek banks and Bank of Cyprus remain in a phase of strong profitability, credit expansion and high capital returns despite a gradual decline in interest rates, according to first-half 2026 results. The four systemic Greek banks posted combined profits of about €2.5 billion, rising to around €2.8 billion when Bank of Cyprus is included. The overall picture is that banks have now moved from a phase of consolidation into a phase of growth. Four main trends stand out: high profitability despite falling interest rates; rising loans, with business financing a key driver; a growing contribution from fees, reducing banks’ reliance on net interest income; and strong capital and high returns, allowing for larger shareholder distributions. Importantly, the results were not based solely on high interest rates. Credit expansion, fees, international operations and improved operating efficiency are starting to play a bigger role, which matters as the interest rate environment becomes less favourable for banks’ margins. Eurobank Eurobank Group posted €738 million in net profit, or €776 million on an adjusted basis, up 9.2%, with return on tangible equity (ROTE) at 16.6%. Core operating profit reached €952 million, with loans and international operations continuing to support performance. Eurobank’s net profit in Cyprus stood at €231 million for the first half of 2026, a slight annual decline of 7.7% compared with the same period last year, though it remained a key pillar of profitability for the wider group. Bank of Cyprus Bank of Cyprus also performed strongly. After-tax profit came to €252 million, up 7% year-on-year, with ROTE reaching 18.8%, beating its target for 2026. Net interest income remained essentially stable at €369 million despite lower interest rates. The impact of rate cuts was offset by growth in the loan and deposit portfolios, lower deposit costs and hedging activity. The bank’s performing loan portfolio reached about €11.4 billion, and the bank announced an interim dividend of €0.24 per share, worth about €105 million in total. National Bank of Greece National Bank of Greece Group posted profits of €661 million, up 3% year-on-year, with adjusted return on tangible equity at 15.5%. Strong credit growth and higher fee income allowed the bank to upgrade several of its targets for the whole of 2026. No figures were given for its operations in Cyprus. Piraeus Piraeus achieved €617 million in profit, marking a record half-year for profitability. ROTE came to 16%, while its loan portfolio grew by €1.8 billion, an indication that demand for financing remains strong. Alpha Bank Alpha Bank Group reported profits of €497 million, with normalised profits at around €500 million, up 6% to 6.5%, though no results were given for its operations in Cyprus. Fee income performed particularly strongly, while net interest income rose on the back of credit expansion. Credit expansion as the new driver The results suggest credit expansion is becoming the new key driver, with banking groups raising their targets. Banks are increasing lending, particularly to businesses, and fees are taking on greater importance. The gradual fall in interest rates is putting pressure on net interest income, so investment services, cards, insurance and other fee-based business are acting as a counterweight. Asset quality now carries far less weight as a concern, and capital is increasingly being converted into dividends. Bank of Cyprus’s interim dividend of €0.24 per ordinary share is up 20% year-on-year, with the bank targeting a total payout of 70% for 2026 and scope for an additional distribution. The dividend will be paid in cash in October 2026, with the payout ratio for the 2026 interim dividend set at 44% of first-half profit. Subscribe to our Newsletter Latest News New decree to target support for energy-poor households in Cyprus Cyprus drafts first law to regulate AI Fire service stretched thin as heavy rain floods Nicosia streets, tree falls on car Famagusta authorities bet on AI to boost wildfire detection Break-in at Lympia pharmacy sees cash stolen overnight Hormuz crossings rise slightly from weekend, remain in single digits, data shows Two students dead in Philippines school shooting including gunman, officials say Follow en.philenews on Google News and be the first to know all the news about Cyprus and the world.