The current situation of Greek banks, the great distance they have come in recent years, and their prospects in the demanding and challenging domestic and global economic environment, was discussed today by the Chairman of the Board of Directors of the Bank of Greece. The President of the Board of Directors of the National Bank of Greece and the Hellenic Banking Association Mr. Gikas A. Hardouvelis, at the conference “Risk Management & Compliance 2024” organized by Boussias events at the Athens Concert Hall.
Mr. Hardouvelis noted that banks internationally have a comparatively smaller capitalization size compared to technology giants. However, their systemic importance is high due to their higher leverage and multifaceted presence in the economy.
Compared to the US, European banks have comparatively smaller capitalisation. This is largely because the European banking sector is fragmented due to the absence of a banking union and the higher cost of the supervisory framework. As far as Greece is concerned, the relative size and capitalization of the banking sector is smaller than its European counterparts.
He went on to say that over the past decade Greek banks have significantly improved their position and financial ratios, driven by the recovery of the Greek economy. He said that the non-performing loans (NPL) ratio has shrunk significantly to single digits, while there is room for further improvement towards the European average. Moreover, the capital adequacy ratios of Greek banks are strong and very close to the European average, while liquidity ratios are well above the minimum requirements and the European average.
In the latest 2023 stress tests, the 4 Greek systemic banks were ranked 5th, 12th, 13th, and 19th out of 109 systemic banks, which ranks our country as the 4th best country in terms of banking system stability in the EU-27 and 1st in Southern Europe.
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