ABank of Greece (BoG) report assesses the country’s financial stability and recovery are at risk from external factors linked to rising geopolitical tensions and the global resurgence of trade protectionism like tariffs.
The May 2025 Financial Stability Report highlights significant improvements in the Greek banking sector, as it continued to exhibit robustness in its fundamentals in 2024 with notable gains in profitability and capital adequacy.
The Bank of Greece report, which focuses on potential risks and the resilience of the banking sector, insurance companies, and other components of the financial system, warns that the Greek economy is likely to be indirectly affected by a potential slowdown in global and European growth.
Greece’s central bank is cautiously optimistic, noting that while the country’s financial system is in a stronger position compared to the past, global economic and political developments remain a key vulnerability.
According to the analysis, the banking sector’s strong showing was primarily attributed to a rise in net interest income and fee income, along with a reduction in provisions for credit risk. However, the gains were partially offset by a rise in operating expenses.
The report also highlights a notable improvement in capital adequacy ratios, largely due to internal capital generation and the issuance of capital instruments:
The Common Equity Tier 1 (CET1) ratio on a consolidated basis rose to 15.9% in December 2024.
The Total Capital Ratio (TCR) climbed to 19.7%, placing Greek banks in line with the euro area average (CET1: 15.9%, TCR: 20.0%).
These figures underscore the increasing stability and competitiveness of Greek banking institutions within the broader EU Banking Union, reflecting both effective management and improved macro-financial conditions.
Source: tovima.com
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