Big banks resilient, growing

Greek banks have demonstrated resilience and robust performance in the first half of 2026, according to assessments by two major ratings agencies, Morningstar DBRS and Scope Ratings. The so-called "big four", Alpha Bank, Eurobank, National Bank of Greece, and Piraeus Bank, posted combined net profits of €2.4 billion during this period, marking a 2% increase compared to the same timeframe last year. When excluding extraordinary expenses, the rise jumps to 11%. This performance reflects strong fundamentals, durable profitability, and solid asset quality, despite ongoing global uncertainties. The first-half results indicate that these banks have maintained strong credit growth, healthy capital positions, and stable financing structures. Both agencies highlight that while external risks such as geopolitical tensions and economic volatility remain elevated, the Greek banking sector appears well-prepared to withstand potential shocks. Their ability to manage operating costs effectively has helped sustain operating profits, allowing them to either maintain or raise their full-year profit forecasts. One key factor contributing to improved performance is the rising net interest margin, driven by a combination of higher lending rates and effective cost control. Additionally, the banks have benefited from increased fee income, with Scope Ratings estimating that earnings from fees and other charges could constitute 25% of overall earnings in 2026, up from 23% in 2025. This shift underscores a broader trend toward diversification of revenue streams beyond traditional interest-based income. Despite the positive outlook, both agencies caution that banks may need to adjust their provisioning strategies for potential loan losses, particularly those arising from speculative investments made prior to the financial crisis. These include certain Swiss franc-denominated loans that proved unprofitable over time. However, neither agency reports a significant deterioration in the overall quality of the banks' balance sheets. Nonperforming exposure levels remain relatively low, ranging from 2.2% to 3.6%, according to Scope Ratings. The stability of the banking system has been further supported by European Union funding initiatives aimed at boosting infrastructure and private-sector investment. These programs have contributed to stronger corporate loan demand, reinforcing the banks' position in the economy. DBRS specifically highlights the role of EU-backed projects in stimulating business activity, which in turn supports sustained credit growth and strengthens the banks' financial health. The performance of the big four banks comes amid a broader transformation within the Greek financial sector. Over the past decade, regulatory reforms and recapitalization efforts have significantly strengthened the banking system's resilience. The current results suggest that these measures have had a lasting impact, enabling the banks to navigate challenging macroeconomic conditions more effectively than before. While the ratings agencies acknowledge the importance of maintaining vigilance against emerging risks, they emphasize that the structural improvements in the banking sector provide a solid foundation for future growth. The continued focus on prudent risk management, coupled with strategic investments in digital services and customer-centric products, positions the banks to capitalize on evolving market opportunities. The latest findings reinforce the view that Greek banks are not only surviving but thriving in a complex economic environment. Their ability to generate consistent returns, manage risks prudently, and adapt to changing conditions bodes well for their long-term prospects. As the second half of 2026 unfolds, the banks are expected to build upon this momentum, leveraging their strengths to drive further profitability and contribute to the country’s economic recovery.