Greek banks showed further progress in their effort to reduce nonperforming loans in the first half of 2025, according to the data released on Friday by the European Central Bank.
However, the percentage of NPLs in Greece remains higher compared to the European average. At the same time, the Greek banks seem to have a fairly strong capital base in the eurozone, while they are lagging behind the competition in lending.
The percentage of bad loans fell to 2.73% in the second quarter of 2025 from 2.90% in the first quarter of the year. Moreover, Greek banks are more efficient than the European average based on return on equity.
The index of Greek banks stood at 13.2% at the end of the second quarter of 2025 compared to 10.11% in European banks.
At the same time, the Greek systemic banks (National, Piraeus, Eurobank and Alpha) which are on the SSM radar of the ECB’s supervisory arm appear to be among the most adequately capitalized in the eurozone as the relative capital adequacy ratio (CET1) increased to 16.09% from 15.88% at the end of the first quarter of 2025.
For European banks the same index stood at 16.12% from 16%. In addition, Greek banks appear to have granted far fewer loans compared to European banks. The loan-to-deposit ratio of Greek banks is only at 62.37% against 102.16% in the eurozone.