S&P revises three Greek banks’ outlook to positive

S&P Global Ratings has upgraded the outlook for three Greek banks, citing the continued improvement in credit conditions despite increased risks.

As the rating agency pointed out, Greece’s economic growth, combined with the steady strengthening of the private sector and the continued reduction in non-performing loans, could further reduce credit risks for local banks over the next 12-18 months, which is expected to strengthen the ability of Greek banks to generate profits.

At an individual level, Greek banks have also made significant progress in improving their capitalization and the resilience of their business models, the rating agency said, and therefore revised its ratings outlook for Eurobank, National Bank and Piraeus Bank to positive from stable.

Greece’s economic prospects support banks’ asset quality

We project that GDP growth will average 2.2% a year over 2026-2027, fueled by investment and private consumption. Thereafter, we forecast that economic expansion will slow as the lending through the Recovery and Resilience Facility begins to wind down. Economic momentum has supported banks in their efforts to converge toward EU peers in terms of asset quality. The pace of their improvement has been spectacular–the non performing exposure (NPE) ratio fell to 3.3% as of Sept. 30, 2025, from a peak of 51% at the end of 2016. We also consider the performance of new lending since 2018 to be encouraging. There have been limited inflows of NPEs and banks’ cost of risk (including costs related to sales and transactions) dropped to about 50-60 basis points by end-2027. This suggests a reduction in banks’ risk appetites and that underwriting standards have improved.