Greek banks are increasing their risk-weighted assets at the fastest pace in Europe. At the same time, their dividends are growing much faster than the average. These are among the findings of a new Morningstar DBRS analysis of the capital adequacy of 40 European banks across 10 markets.
The sample includes Piraeus, Alpha Bank, Eurobank and National Bank of Greece.
According to the agency, Greek banks’ risk-weighted assets (RWAs) rose by 18% between the end of 2022 and June 2026. This was the largest increase among the markets in the sample, compared with a rise of around 10% for European banks overall.
DBRS attributes the increase to strong credit growth and acquisitions. This marks a change of direction from 2020–2024, when Greek banks, like their Italian and Portuguese counterparts, reduced their risk-weighted assets by cutting risk.
Dividends growing at nearly five times Europe’s pace
The same momentum is evident in dividends. Cash dividends from 2025 profits rose 36% year on year, the second-fastest increase in Europe after Germany’s (+42%). Across the sample, the increase was 8%, with European banks distributing a record of around €81 billion. In absolute terms, however, Greek dividends remain among the smallest in the sample, helping to drive the rate of increase.
The dividend payout ratio at Greek banks rose to around 37%, from 20% in 2023, as the sector returns to normal payout policies. It remains significantly below the ratios at Scandinavian banks (80%) and Italian banks (72%). DBRS’s figures cover cash dividends only and exclude share buybacks, so total shareholder returns are higher.
Capital buffer around the average
The average CET1 ratio at Greek banks stood at 14.9% in June 2026, down from the end of 2025. Across the sample, the ratio was slightly above 15%. The buffer above regulatory requirements was around 470 basis points, close to the European average of about 450 basis points.
DBRS singles out Greece and Italy as markets where capital buffers have declined over the past 12–18 months. Higher distributions and acquisitions offset strong profitability.
As for profitability, the average annualised return on equity at Greek banks was around 12.4% in the first half. This placed them in the middle of the European rankings.
They lagged banks in Spain (16.6%), the Scandinavian countries (14.3%), Italy (14.1%), Britain (13.8%) and Portugal, but were ahead of those in the Netherlands, Ireland, Germany and France. Greece was the only market where the ratio fell compared with 2022, when it exceeded 15%. The agency attributes this to one-off gains that year.
A positive development for Greek banks is the easing of Pillar 2 requirements (P2R) in 2026. Greece is among the countries with the largest reductions, although its requirements remain the highest among the markets examined by the agency.
DBRS notes, however, that overall capital requirements rose on average across Europe. The benefit of lower P2R was more than offset by an increase in capital buffers, mainly the countercyclical buffer.
For the European banking sector as a whole, DBRS expects distributions to remain high but grow at a slower pace. At the same time, credit growth, acquisitions and higher regulatory requirements will gradually constrain capital headroom.
The agency lists geopolitical uncertainty and a possible widening of sovereign bond spreads among the main risks. The impact of the latter is considered manageable, as most bond portfolios are measured at amortised cost.