Following years of restructuring efforts, Greece’s banks are preparing for a new era that will allow them to help finance the country’s economic recovery and transformation.

The country’s four major lending institutions, along with two of Greece’s smaller banks, have signed agreements with the government to help channel almost €1 billion in financing from the national Recovery and Resilience Fund into new projects that will help secure the country’s future in digital and clean energy technologies.

The agreement comes as the banks aggressively cut their stock of non-performing exposures, a relic of the financial crisis, and bring their ratio of bad loans within range of European averages. “2021 was a landmark year for the Greek banking sector characterized by the remarkable progress on balance sheet repair,” said Eurobank Equities Research in a recent note.

According to official data, the Greek banking system’s stock of NPEs fell to €20.9 billion at the end of the third quarter last year − equal to just over 10% of aggregate loans – from €60 billion a year earlier. Select Greek lenders have already achieved a bad loan ratio in single digits, representing an important milestone for the recovery of the sector.