The Bank of Greece posted the executive summary of its May 2025 Financial Stability Review, concluding that the main risks to financial stability in Greece are largely exogenous, driven by heightened geopolitical tensions and mounting trade protectionism. It expects the Greek economy to be affected mainly indirectly through a potential slowdown in global and European growth and weaker investor sentiment, while noting that Greek banks strengthened their fundamentals in 2024. The Review reports higher profitability, stronger capital and improved asset quality alongside continued high liquidity. Greek banking groups recorded profits after tax and discontinued operations of EUR 4.4 billion in 2024 (EUR 3.8 billion in 2023), supported by higher net interest and fee income and lower loan-loss provisions, partly offset by higher operating costs. On a consolidated basis, the Common Equity Tier 1 ratio rose to 15.9% and the Total Capital Ratio to 19.7% in December 2024, broadly matching Banking Union averages, while the non-performing loan ratio fell to 3.8% (from 6.7% in December 2023), mainly due to non-performing loan securitisations. Two special features cover the adjustment of the European Union macroprudential policy toolkit under Directive (EU) 2024/1619 (Capital Requirements Directive VI) and Regulation (EU) 2024/1623 (Capital Requirements Regulation III), and residential real estate-secured lending to natural persons in 2021-2024. The latter finds credit standards remained prudent and credit institutions largely complied with borrower-based macroprudential measures even before they took effect in January 2025, while the Review warns that slower euro area activity and a potential abrupt global repricing of financial assets could weigh on the outlook and underscores the combined use of microprudential supervision and macroprudential policy.

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