Greece’s banks have spent years rebuilding their balance sheets after a financial crisis that nearly broke the system. Now S&P Global Ratings is asking what could break them again.
The ratings firm has examined three potential shocks: simultaneous defaults by several large corporate borrowers, a downturn across shipping, tourism and energy, and a sharp repricing of corporate debt as cheap borrowing is refinanced at higher rates. None is S&P’s base case, and its overall view of Greek banks remains positive.
The exercise nevertheless exposes an unusual vulnerability. Greece’s four systemic banksoften lend to the same large companies. Their 20 biggest borrowers represent 12% to 18% of gross loans - the highest concentration in the European Union.
S&P estimates that simultaneous defaults by three midsize companies among the banks’ 10 largest borrowers could cut common-equity Tier 1 capital ratios by 1.5 to 2.3 percentage points, assuming 45% losses on exposures after credit-risk mitigation. Under a harsher 60% loss assumption, the hit rises to 2.0 to 3.1 points, equivalent to roughly €4 billion ($4.7 billion) across the system.
Defaults by the three largest borrowers could erase as much as four percentage points of CET1 capital at individual banks. S&P says the lenders could absorb such losses because their capital cushions above regulatory requirements approach 10 percentage points.
Sector concentration presents another risk. Shipping, tourism and energy account for roughly 45% of corporate lending at Greek banks, compared with around 17% across the EU. That leaves lenders unusually sensitive to global freight rates, tourist arrivals and energy prices, though less exposed than European peers to property.
A severe downturn across all three sectors - assuming 25% of loans default with 50% losses - could cost the banking system about €4.8 billion and reduce CET1 ratios by 2.4 to 3.6 percentage points.
Still, today’s banks bear little resemblance to those that enteredGreece’s debt crisis. Bad loans have fallen sharply, profitability has recovered and major lenders have regained investment-grade ratings.
Greek companies are healthier, too. Only 8.8% have interest coverage below one times, according to S&P, compared with 24% in Spain.



























