Greek banking sector turns a corner, reaches key milestones

After years of crises, turbulence and painful recapitalizations, Greek banks have turned the corner and are now in one of the strongest positions they have been in decades. The latest data show that the country’s four systemic banks are posting strong profitability, high capital adequacy, steadily improving liquidity and, most importantly, expanding private sector credit to support Greek economic growth.

Late last year, the Greek banking system passed an important milestone: the collective loan portfolio surpassed €200 billion for the first time in almost a decade – and up from €155 billion just five years ago. Over that time, the banking sector shed some €80 billion in non-performing loans. Now, the bad debt ratio at Greek banks is just 3% – down from roughly 50% a decade ago.

With a core capital adequacy ratio averaging 15.2% – and a total capital adequacy ratio averaging almost 20% – the Greek banks have enjoyed a series of ratings upgrades, including this month by Fitch Ratings. Earnings have also been strong: in 2025, profit after tax increased by 12.8%, while the return on equity stood at 11.8%, exceeding the European average.

Investors have noticed. In the past year, Greek bank stocks are up more than 40%, with some analysts saying that the sector is due for further gains. “Strong earnings visibility, clean balance sheets and solid capital generation [are] underpinning a compelling re-rating case even under a more cautious macro backdrop,” notes Eurobank Equities in a research report.

With the support of EU financing tools for the post-pandemic recovery, the restored health of the Greek banking sector has allowed the banks to step up and resume lending. Two years ago, the annual net flow of credit to businesses more than doubled to €9.3 billion and continued to show robust growth in 2025. Consumer lending likewise, almost doubling on year in 2024 to €528 million. Now, mortgages are also recovering with housing loans to households showing positive growth in November 2025 – for the first time since 2010, according to Bank of Greece data.