Greek banks maintain their upward trajectory in terms of profitability, albeit with reduced momentum compared to the first quarter of 2025 and the last quarter of 2024. The second quarter 2025 results to be presented by the four major banks between July 30 and August 1 (in order: Piraeus, Eurobank, National Bank, and Alpha Bank) are expected to confirm this trend, according to Nena Malliara’s report in “Sunday Afternoon.”
Banks: interest income under pressure from ECB decisions
Interest income will play a central role in shaping results, expected to decline due to interest rate cuts implemented by the European Central Bank. Alpha Bank is an exception to this rule, expected to show an increase in interest income thanks to its lower sensitivity to interest rate changes.
An additional negative impact on banks’ interest income will arise from the dollar’s decline, particularly for those maintaining significant exposure to shipping. This sector is directly affected by tariffs imposed by Donald Trump’s administration.
Credit expansion, the main pillar for banks’ interest income
Despite the slowdown, credit expansion continues to be a key pillar of interest income for banks. However, lending rates are expected to be lower, as banks have already achieved impressive expansion in business credit in previous quarters.
According to the latest data from the Bank of Greece for May, the annual growth rate of financing to non-financial enterprises reached 17.4%, compared to 17.2% in the previous month.
Factors affecting credit activity
The expected slowdown from current high levels is linked to specific factors:
• Exhaustion of major investment programs from the Recovery Fund
• Maturation time for new investment projects awaiting financing
• Increase in syndicated loans abroad due to credit line expansion
Limited inflows of non-performing exposures are expected in banks’ loan portfolios, though this does not signal deterioration in asset quality. As banking executives clarify, this trend reflects preventive loan arrangements aimed at early problem avoidance.
Positive performance in commissions and trading
An upward movement is expected in commission income, mainly in the wealth management sector, which benefited from the favorable climate in the Stock Exchange and international markets. This positive environment also benefited Greek banks’ placements in international bonds, generating significant non-recurring income from trading.
Corporate moves in analysts’ spotlight
Analysts will focus particularly on strategic moves undertaken by the four major banks and their impact on balance sheets. Characteristic examples include Eurobank’s acquisition of Hellenic Bank and Alpha Bank’s enhanced cooperation with Unicredit.
Simultaneously, progress will be evaluated on ongoing actions, such as Piraeus Bank’s planned acquisition of National Insurance and National Bank’s plans to utilize its high surplus.
International forecasts for the Greek banking sector
Analysts from international houses emphasize Greek banks’ superior performance compared to the European sector. Their estimates place return on tangible equity at approximately 14% for the five-year period 2025 to 2029.
Foreign analysts also forecast satisfactory prospects for profit distribution, further reduction in non-performing exposure ratios by 3% this year and 2% in the 2026-2029 period, healthy CET1 capital ratios in the 16% to 17% range, and strong lending growth with an annual rate of 8% for the 2025-2027 period.
