Greek banks continue to earn some of the highest lending margins in Europe, delivering above-average profitability even as they lag behind their regional peers in capital strength and loan quality, according to European Central Bank data.
Supervisory figures for the second quarter of 2026 show that Greece’s major banks reported an average net interest margin of 2.67%, compared with 1.54% across significant European banks supervised by the ECB.
The 1.13-percentage-point gap highlights the Greek banking sector’s ability to generate substantial income from the difference between interest charged on loans and interest paid on deposits and other funding.
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Greek lenders’ margins were more than double those of German banks, at 1.07%, and French banks, at 0.99%. They also exceeded Italy’s 2.05% and Spain’s 2.59%, although banks in Latvia and Slovenia reported higher margins.
The strong interest income translated into above-average profitability. Greek banks posted a return on equity of 12.29%, compared with the European average of 10.73%. That exceeded Germany’s 7.52% and France’s 7.41%, though it trailed Italy’s 14.94% and Spain’s 16.64%.
The figures underscore the transformation of Greece’s banking industry following the country’s prolonged debt crisis, when lenders struggled with mounting loan losses and severely weakened balance sheets.
Yet the latest data also reveal vulnerabilities. Greek banks reported a common equity Tier 1 capital ratio of 14.91%, below the European average of 16%. The closely watched measure indicates how much high-quality capital banks hold relative to their risk-weighted assets.
While the gap doesn't necessarily signal regulatory problems, it suggests Greek lenders have smaller capital cushions than many European competitors to absorb potential economic shocks.
Asset quality also remains a concern. Nonperforming loans accounted for 2.98% of Greek banks’ loan portfolios, compared with 2.17% across major European lenders. The Greek ratio exceeded Germany’s 1.84%, Italy’s 2.07%, France’s 2.55% and Spain’s 2.67%.
