Financial Stability Review: October 2025
22/10/2025 - Press Releases
- Risks to financial stability in Greece remain mostly exogenous, associated with geopolitical tensions, mounting trade protectionism and a potential sharp repricing of financial assets in global capital markets.
- In the first half of 2025, Greek banks further improved their fundamentals and enhanced their resilience to potential shocks.
The Executive Summary of the Financial Stability Review was posted today on the Bank of Greece website. The Review is published twice a year by the Financial Stability Directorate.
The Review examines developments in the macroeconomic and financial environment, assesses the risks to and the resilience of the banking and insurance sectors, as well as of the other sectors of the Greek financial system, and discusses the functioning of financial market infrastructures (i.e. payment systems, central securities depositories and central counterparties).
The present Financial Stability Review focuses on developments in the banking sector over the first half of 2025 and also includes two Special Features:
(a) Special Feature Ι presents the methodology and results of the EU-wide stress test conducted by the European Banking Authority (EBA). The stress test assesses banks’ resilience to different types of risk under an adverse scenario.
(b) Special Feature ΙΙ presents the main technical challenges and weaknesses of the standardised credit-to-GDP gap in the context of assessing cyclical systemic risks and calibrating the countercyclical capital buffer rate in European countries.
In the first half of 2025, Greek banking groups’ profits after tax and discontinued operations amounted to EUR 2.5 billion, against profits of EUR 2.4 billion in the first half of 2024. Profitability benefited from the significant growth of net fee and commission income and gains on financial transactions, while a negative impact came from a small decline in net interest income and a rise in operating costs and impairment charges.
The capital adequacy ratios of Greek banking groups remained high. In particular, the Common Equity Tier 1 (CET1) ratio on a consolidated basis fell marginally to 15.8% in June 2025, from 16% in December 2024, and the Total Capital Ratio (TCR) rose to 20.4%, from 19.8% in December 2024, standing very close to the average for significant institutions in the Banking Union.
Banks’ asset quality improved. In June 2025, the ratio of non-performing loans (NPLs) to total loans in Greece stood at 3.6%, against 3.8% in December 2024. This is the lowest level of the NPL ratio since Greece joined the euro area.
The main challenges ahead stem from uncertainty and risks in the international environment. The domestic banking sector has solid fundamentals and is much better placed than in the past to withstand potential shocks. However, a deterioration of international financial conditions could have adverse effects on economic activity, with an indirect impact on the domestic banking sector. Therefore, enhancing the robustness of the financial system is a key priority, while vigilance is required of all stakeholders.
Link:
Executive Summary of the Financial Stability Review - October 2025