The evolution of key financial ratios and risk indicators of the Greek banking sector during the domestic sovereign crisis
School of Economics, Business Administration and Legal Studies, Executive MBA
The objective of this study was to determine and assess the historical evolution of key financial ratios and risk indicators of the four Greek systemic banks (Alpha Bank, EuroBank, National Bank of Greece and Piraeus Bank), before and during the sovereign financial crisis that initialized in 2009, in the aftermath of the global financial crisis. Based on financial data of 31/12/2015, these banks accounted for over 88% of the country’s banking assets and over 91% of the total customer deposits. The analysis employs, in annual frequency, selected financial ratios and specialized risk indicators, applicable specifically to the banking sector. The research period expands from 2004 to 2015, split in the pre-crisis (2004-2008) and crisis (2009-2015) years, as far as the domestic sovereign crisis is concerned. Moreover, the performance of the four domestic banks was compared to the average performance of a group consisting of 130 banks in Eurozone countries that are considered ECB-significant.
Our analysis revealed that the sovereign crisis led to a severe deterioration of almost all financial ratios and risk indicators for the four domestic systemic banks. Furthermore, in most cases the negative impact of the crisis on the domestic banks’ performance was significantly higher than that of other financial institutions of similar characteristics in the Eurozone.