Athens, Greece. Greek banks, including some operating in Cyprus, moved closer in line with European peers in the opening months of 2026 after restoring capital adequacy and recording some of the strongest profitability levels in Europe. Sector data and central bank and supervisory reports showed continued strength in profitability, liquidity and capital buffers, alongside improving asset quality.
Performance against European averages
A recent European Central Bank report, highlighted by Greek business outlet Newmoney, showed that Greek banks continued to outperform the European average across several indicators, including profitability, efficiency and liquidity.
Return on equity increased by 8.73 per cent in the first quarter, compared with 4.7 per cent in Europe, indicating stronger earnings momentum. Organic profitability reached 4.82 per cent, compared with 2.77 per cent for European systemic banks.
Efficiency and liquidity indicators
Efficiency metrics also remained stronger than the European average. The cost-to-income ratio stood at 36 per cent, compared with 55 per cent in Europe, while profitability levels were 11 per cent versus 10 per cent across the euro area.
Liquidity indicators also showed an advantage. The loans-to-deposits ratio was 65 per cent, compared with 102 per cent in Europe, while liquidity coverage reached 189 per cent, compared with 154 per cent.
Bank of Greece assessment
The Bank of Greece, in its latest monetary policy report, also reported further improvement, citing sustained capital strength and operational resilience.
Return on equity stood at 10.7 per cent, remaining well above the euro area average despite credit expansion and capital distribution to shareholders. The Common Equity Tier 1 ratio reached 14.9 per cent, while the total capital ratio remained close to 20 per cent, indicating the sector’s capacity to absorb external shocks.
