Bank of Greece: Prospects for Greek banks remain positive

The prospects for Greek banks remain positive, as strong fundamentals act as a counterbalance to increased uncertainty and external risks, according to the Financial Stability Review published on Tuesday by the Bank of Greece (BoG).

However, it is noted that a prolonged conflict in the Middle East could adversely affect the financial condition of businesses and households in Greece, as well as the quality of banks’ loan portfolios and their ability to meet credit expansion targets. Therefore, further strengthening of the financial system is a priority, and vigilance is required from all stakeholders.

Regarding developments over the past year, the report highlights that Greek banking groups recorded after-tax profits (including discontinued operations) of 4.7 billion euros, compared to 4.2 billion in 2024 euros. This increase was driven by higher non-interest income and lower loan-loss provisions. Negative contributors included reduced gains from financial transactions and higher operating expenses, mainly due to increased administrative costs.

Capital adequacy remained at a satisfactory level. Specifically, the Common Equity Tier 1 (CET1) ratio on a consolidated basis decreased to 15.3% in December 2025 from 16% in December 2024, while the Total Capital Ratio (TCR) edged down to 19.7% from 19.8%.

The quality of banks’ loan portfolios improved. In December 2025, the ratio of non-performing loans (NPLs) to total loans stood at 3.3% (down from 3.8% in December 2024), as credit expansion was accompanied by a reduction in NPLs. This is the lowest level since Greece joined the euro area and is now close to the average of significant banks in the Banking Union.

amna.gr