Greek banks profits reached €2.6 billion in the first half of 2026, yet bad loans on their books rose to €6.2 billion over the same period. Both figures come from the Bank of Greece’s latest Financial Stability Review, published on 22 October.
Greek banks profits keep rising
According to the Bank of Greece, Greek banking groups posted after-tax profits of €2.6 billion between January and June, up 3.8% on the first half of 2025.
Interest and fees drove the result. Net interest income rose 5.6%, helped by loan growth and larger holdings of foreign government bonds. At the same time, net fee and commission income jumped 18.5%. Together, these core revenues grew 8.3% year on year.
Banks also set aside far less money for bad debts, with loan-loss provisions down 27.8%. On the other hand, operating costs rose 9.3% and trading gains fell. Overall, the sector’s return on equity stood at 12.1%.
Capital buffers eased slightly. The CET1 ratio fell to 14.8% in June from 15.4% in December 2025, while the total capital ratio slipped to 19.6% from 19.8%.
What the €6.2 billion actually means
The €6.2 billion figure is the stock of non-performing loans (NPLs) held on Greek banks’ own balance sheets, on a solo basis. Therefore, it excludes the legacy bad debts that banks have already sold or securitised, which loan servicers now manage.
That stock rose by €529 million, or 9.3%, from €5.7 billion in December 2025. As a result, the NPL ratio edged up to 3.4% of all loans from 3.3%.
According to the report’s detailed figures, reported by SKAI and Ta Nea, €1.7 billion of loans turned bad during the half-year. By contrast, only €388 million returned to performing status, and banks wrote off just €73 million.
Households felt the strain most. Household bad loans rose 14% from December, mainly in mortgages and, to a lesser extent, consumer loans. The household NPL ratio reached 8.6%. Business NPLs rose 5.4% to about €3.2 billion, with the sharpest increase among self-employed professionals and micro-businesses (12.5%). Meanwhile, bad loans to shipping companies fell 7.3%.
Even so, the central bank stresses that NPLs remain 94%, or €101 billion, below their March 2016 peak.
Are high interest rates part of the problem?
The Bank of Greece links part of the rise in bad mortgages to the recent legislative settlement for Swiss franc loans, as well as to bank initiatives targeting restructured mortgages of vulnerable households, Powergame reports.
However, borrowing costs are clearly climbing. The European Central Bank raised its key rates twice in 2026, by 25 basis points in June and again in September. Consequently, the average rate on new loans to Greek businesses rose to 4.5% in August from 3.7% in December 2025.
The report also points to sharply higher energy prices and inflation, which reached 3.8% in Greece in January–September. According to Powergame, the central bank flags two risks in particular: rising interest rates, and fast-rising property prices combined with accelerating mortgage lending. Neither threatens financial stability for now, but both could push more households and businesses into arrears.
Still, with Greek banks profits holding up, the Bank of Greece concludes that the sector remains resilient. “Current challenges leave no room for complacency,” it said, urging banks to keep supporting investment and growth through new lending.
The post Greek Banks Earn €2.6 Billion in Six Months as Bad Loans Climb to €6.2 Billion appeared first on Greek City Times.