Goldman Sachs has placed Greek banks among its highest-conviction European banking picks for September and the final quarter of 2026, citing attractive valuations compared with other markets, particularly Spain.

The US investment bank described Greek lenders as a “top long rate sensitive” choice, meaning it expects them to benefit particularly strongly from the current interest-rate environment.

The central argument is the valuation gap between Greek and Spanish banks, with Goldman Sachs seeing similar underlying dynamics in the two markets while Greek lenders continue to trade at significantly lower valuations.

The bank said greater selectivity is now needed across European banking as valuations in markets including Spain and Sweden have risen substantially.

Goldman Sachs has placed Spanish lenders Sabadell and Unicaja among its leading short positions, describing them as expensive and effectively signalling a preference for Greece over Spain.

The positive view of Greek banks is also supported by their expected inclusion in the SX7E European banking index in September, which Goldman Sachs sees as an additional near-term market catalyst.

The broader European banking backdrop remains supportive, with earnings forecasts continuing to be revised upwards following second-quarter results.

Higher interest rates remaining in place for longer and strong shareholder returns are also supporting the sector, while European banks continue to trade at a discount to the wider equity market and US banks despite their recent gains.

For Greek lenders, Goldman Sachs sees three factors working together: favourable earnings momentum across European banking, substantially lower relative valuations than Spanish banks and the immediate catalyst provided by inclusion in the SX7E.

The combination puts Greek banks at the top of Goldman Sachs’ preferred choices among lenders that could benefit most from the prevailing interest-rate environment.