Athens, Greece. HSBC said Greek banks remain among the main beneficiaries of a more stringent European Central Bank monetary policy stance. The bank’s report projects interest rate increases in the second half of 2026 followed by a gradual policy reversal in 2027.
Rate outlook and balance sheet sensitivity
According to Greek business outlet Insider, HSBC has built into its macroeconomic models three interest rate hikes totaling 75 basis points during the second half of 2026, ahead of a gradual shift toward monetary easing in 2027.
Market strategists said Greek bank balance sheets remain highly sensitive to benchmark changes, supporting net interest income.
Funding structure and loan composition
The report attributed the underlying strength to the funding mix, stating that 45% to 60% of interest-bearing assets are funded by low-cost sight and savings deposits, while most local loan portfolios are based on variable floating rates.
Earnings and net interest income forecast changes
HSBC’s research team raised its average earnings per share estimates for systemic Greek lenders by 3% for 2026 and 5% for 2027, while keeping projections for 2028 largely unchanged.
It also increased structural forecasts for net interest income by 2% for 2026 and 4% for 2027.
Preferred stocks and valuation
Within the local banking sector, Piraeus Bank and National Bank of Greece were cited as set to receive the most significant upgrades due to higher balance sheet sensitivity to interest-rate benchmarks.
HSBC maintained a buy recommendation for all four systemic Greek institutions and named Piraeus Bank and National Bank of Greece as preferred stock selections, citing stronger earnings momentum and the investment appeal of future dividend distributions.
Greek banks were described as trading at about a 15% discount on a price-to-earnings basis compared with peers in Central and Eastern Europe, the Middle East, and Africa.
How do you expect projected ECB rate moves to affect Greek bank earnings and dividends?