The National Bank of Greece’s first-half performance has exceeded initial expectations, prompting Beta Securities to upgrade its forecasts for 2026 following the group’s stronger-than-anticipated results and a more favourable interest rate environment.

In its report, the findings of which were shared by business outlet Newmoney, the brokerage said the bank reported underlying net profit of €661 million, excluding extraordinary items, while delivering a return on tangible equity (RoTE) of 15.5 per cent, surpassing the profitability target management had set at the beginning of the year.

A key factor behind the revised outlook is Beta Securities’ updated assumptions for European Central Bank (ECB) interest rates.

The brokerage has raised its forecast for the ECB’s deposit facility rate (DFR) to 2.25 per cent from 2 per cent, reflecting expectations that interest rates will remain higher than previously anticipated.

According to Beta, every 25-basis-point change in the deposit facility rate affects the bank’s net interest income by approximately €35m.

As a result, the brokerage has also increased its forecasts for net interest income and the net interest margin, despite ongoing pressure on lending margins.

The report also pointed to the bank’s continued strong lending performance during the first half of the year.

Performing loans increased by €2.1 billion since the beginning of the year, reaching €39.1 billion, while new loan disbursements climbed to €5.5 billion, representing an increase of 30 per cent.

Beta said this expansion was driven primarily by corporate financing, particularly in the energy, infrastructure, shipping and tourism sectors.

The brokerage added that the bank remains committed to its target of achieving net credit expansion of more than €3bn in 2026.

Beyond lending, the report highlighted continued growth in fee income, which increased by 10 per cent during the first half of the year.

This improvement was attributed mainly to the rapid expansion of investment products and wealth management activities.

Beta also expects the bank’s strategic partnerships with Allianz and Dromeus Capital to provide a significant boost to earnings from 2027 onwards.

According to the brokerage, these collaborations are expected to contribute around €80m to profitability in 2027 and more than €100m in 2028, while having only a limited impact on the bank’s capital position.

The report also drew attention to the bank’s strong capital base, describing it as one of its key competitive advantages.

With a Common Equity Tier 1 (CET1) ratio of 17.3 per cent, Beta said the bank continues to hold substantial excess capital.

The brokerage believes this provides sufficient flexibility to support further credit growth, maintain generous shareholder distributions and pursue additional strategic initiatives.

Against this backdrop, Beta considers it likely that the bank could announce an interim dividend during the fourth quarter, provided discussions with supervisory authorities are completed successfully.

Despite its upbeat assessment, the brokerage cautioned that investors should continue monitoring several factors that could influence future performance.

These include the path of ECB interest rates, the pace of credit expansion during the second half of the year, the absorption of Recovery and Resilience Facility funding, and the way management chooses to deploy its excess capital, whether through higher shareholder distributions or new strategic investments.