GREECE Trends and Developments Contributed by: Paris Tzoumas, Zepos & Yannopoulos
Banking Market Trends in Greece Over the past year, the Greek banking and finance sector has been very actively engaged in the funding of domestic businesses and projects as well as direct foreign investments in the coun - try. This follows the full re-privatisation of the Greek banking system starting from late 2023, when the Hellenic Financial Stability Fund (the HFSF), the state-controlled Greek bailout fund (established in 2010 to safeguard the stabilisa - tion and, ultimately, the recapitalisation of the Greek banking system through the crisis years) sold its shareholdings in Eurobank, Alpha Bank and 22% of its shareholding in National Bank of Greece, followed by the disposal of its 27% stake in Piraeus Bank in 2024 and then a further 10% in National Bank of Greece. The active financ - ing of the Greek economy by banks in 2024 was also partly due to the fact that Greek businesses and projects were able to benefit from facility agreements that combined commercial tranches paid out by the banks themselves with tranches they could also disburse, being the main lend - ers to the Greek State, using cheaper capital made available to the State via Greece’s National Recovery and Resilience Plan (“Greece 2.0”’), approved by the Council and fully backed by the EU Recovery and Resilience Facility established by EU Regulation 2021/241. Non-performing loans and credits (NPLs) have dominated the Greek banking system for the last few years. However, following the massive deleveraging of Greek banks’ NPLs up to the end of 2023, there has been a gradual shift to the secondary NPL market and re-performing loans. Notwithstanding this development, in mid-December 2023, the Hellenic Asset Pro - tection Scheme (HAPS), or “Hercules Scheme”, was extended for a further 12 months to the end of 2024 to facilitate a few additional securitisa - tions originated from Greek systemic and non-
systemic banks to further reduce their NPLs. An important milestone in 2024 on the NPL front was the signing by PQH – the special liquidator for all credit and financial institutions under spe - cial liquidation in Greece – of sale and purchase agreements for three separate NPL portfolios (secured, unsecured and mixed) with an aggre - gate total book value of EUR4.8 billion entered into with private investors and comprising enti - ties managed or advised by Fortress Investment Group (UK) Ltd., Bain Capital Credit LP and Bracebridge Capital, LLC. Finally, the Greek banking system is currently adapting itself to the challenges posed by the current trends of digital transformation, cyber - security and risk management, following the recent enactment of relevant legislative tools at both EU and domestic level. The digitalisa - tion of Greek banks is accelerating, driven by evolving customer expectations, technological advancements, and the need for increased oper - ational efficiency. Traditional banks in Greece are increasingly investing in digital services, such as mobile banking apps, digital wallets, and online lending platforms in order to enhance customer convenience and competitiveness. The Greek banking sector’s push toward digi - tal transformation is part of a broader European trend toward modernised financial services, streamlined through digital tools, automation, and AI-driven solutions. Together with a fintech company, one of the Greek systemic banks has recently launched a fully digital bank which oper - ates without physical branches and provides a seamless, entirely online banking experience. This is not the only “neobank” in Greece, exem - plifying the shift toward agile, tech-driven finan - cial services. The digital-first banks are reshap - ing the Greek banking landscape, setting new standards for efficiency and accessibility, and
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