Moody’s has identified four key risks that could test the resilience of Greek banks over the coming months, warning that a renewed increase in bad loans, capital quality concerns, cyber threats and geopolitical uncertainty could undermine their otherwise strong financial position.

In an analysis prompted by the Bank of Greece’s latest Financial Stability Report, the ratings agency said the risks remained manageable for the six Greek banks it covers, which account for approximately 93 per cent of the country’s banking system.

However, it warned that a sharp rise in new non-performing loans, particularly if accompanied by an external shock, could put pressure on banks’ capital buffers.

The warning comes as new bad-loan inflows have already begun to accelerate in the first half of 2026, despite the overall non-performing loan (NPL) ratio remaining relatively low.

The most immediate concern is the deterioration in loan quality. During the first six months of 2026, €1.7 billion in previously performing loans were reclassified as non-performing, while only €388 million of existing bad loans returned to performing status.

Consequently, the total stock of non-performing loans increased by 9.3 per cent over the six-month period.

The NPL ratio reached 3.4 per cent in June, compared with 3.3 per cent at the end of 2025.

Pressure is particularly evident among very small businesses and small and medium-sized enterprises, where NPL ratios stand at 11.2 per cent and 4.6 per cent respectively.

By comparison, the corresponding ratio for large companies is just 0.9 per cent.

Borrowers could also face additional pressure from higher interest rates.

Following two European Central Bank (ECB) rate increases, the average interest rate on new loans to non-financial corporations rose by 84 basis points to 4.5 per cent at the end of August 2026, potentially making repayments more difficult for financially vulnerable businesses.

The second risk concerns the quality of banks’ capital, particularly their continued reliance on deferred tax credits (DTCs), which remain a significant component of Greek lenders’ common equity tier one (CET1) capital.

According to Moody’s, DTCs accounted for 36 per cent of Greek banks’ CET1 capital in June 2026, down from approximately 40 per cent at the end of 2025 as lenders accelerated their efforts to reduce their exposure.

The introduction of a 0.5 per cent countercyclical capital buffer from October 1, 2026, is also increasing capital requirements and reinforcing the need for banks to maintain adequate reserves.

Moody’s said future capital adequacy would depend on several factors, including lending growth, asset quality, banks’ ability to generate capital internally, dividend policies and the pace at which deferred tax credits are written down.

The third area of concern is cybersecurity and operational risk, with the agency warning that banks face increasingly sophisticated threats.

Cyberattacks involving artificial intelligence, greater reliance on external technology providers and geopolitical tensions are making stronger digital resilience increasingly important.

The agency also highlighted the growing incidence of social engineering fraud and authorised payment scams, in which customers are manipulated into approving transactions themselves.

The expansion of instant payments makes it more difficult for banks to recover stolen funds once transactions have been completed.

A serious cyber incident or fraud case could therefore result in both direct financial losses and significant reputational damage for lenders.

The fourth risk stems from macroeconomic and geopolitical uncertainty, particularly the potential impact of regional tensions, higher energy prices and disruptions to supply chains.

These developments could weaken corporate cash flows and reduce demand for lending, while also affecting the quality of banks’ assets and their profitability.

Despite identifying these vulnerabilities, Moody’s does not expect any significant deterioration across the four risk areas under its baseline scenario for Greece’s four systemic banks over the next 12 to 18 months.

The agency said strong profitability, adequate capital and comfortable liquidity continued to provide banks with substantial capacity to absorb potential losses.

Nevertheless, it cautioned that a more pronounced increase in new bad loans could interrupt the improvement in asset quality and slow capital generation.

Such a development could ultimately lead to a reassessment of banks’ credit ratings and outlooks.