Greece’s systemic banks will report their third-quarter 2026 results between 29 October and 4 November. We expect strong results across the sector, driven mainly by net interest income (NII), cost discipline and favourable asset-quality trends, according to a report by Axia-Alpha Finance.
Some upgrades to management guidance are also possible, although the scope for positive surprises is limited, given that in many cases our own estimates and market expectations are already higher.
We believe, the report’s authors write, that the results are unlikely to change investor sentiment in the short term. We are therefore maintaining our cautious tactical stance, despite valuations having become much more attractive.
Earnings momentum (P&L)
For the sector as a whole, pre-provision profits are expected to rise by 17% year on year to €1.98bn, while normalised net profit is forecast to reach €1.3bn, up 19% year on year.
Despite a slight decline from the exceptionally strong second quarter of 2026, profitability metrics are expected to remain healthy, with normalised RoTE forecast at 16.2%.
Total revenue is expected to rise by 15% year on year, driven by stronger core income, while remaining flat quarter on quarter as higher NII is expected to offset lower fee and trading income.
Operating expenses and the cost of credit risk are expected to remain broadly under control. For Alpha Bank, we use the market estimates compiled by the company itself.
Balance-sheet trends
Credit expansion is expected to remain strong year on year, with net loans up 10%. However, the quarterly increase is expected to be somewhat more modest than in previous quarters, at around 1% quarter on quarter according to our estimates, reflecting the seasonally weaker performance in the third quarter.
Deposits are expected to follow a similar trend, keeping liquidity comfortably within range, with the loan-to-deposit ratio (L/D) at 69%. The CET1 ratio is expected to improve marginally, thanks to organic capital generation and synthetic securitisations during the quarter, while the year-on-year decline mainly reflects non-organic actions taken over the period.
Investors focus on guidance
Management guidance upgrades were fairly modest last quarter, so investors can reasonably be expected to look for more this time. We believe the scope for significant surprises is limited, particularly as management teams do not usually discuss next year’s trends in detail at this point.
Investors may also reassess the outlook for credit expansion and fee income in light of a challenging international environment. Capital allocation decisions will also be in focus, given that from 1 January 2027 Greek banks will no longer need regulatory approval to distribute profits.
Positive long-term view, but tactically cautious
Since our last sector update (“Tactically Cautious, Structurally Long” – 25 September), Greek banks have lost around 14% of their market value.
They now trade at a P/TBV ratio of 1.35x and a P/E of 8.6x based on 2027 estimates, with RoTE above 16% and a dividend yield above 6.0%. Although valuations are now much more attractive, particularly given the positive medium-term earnings outlook, we prefer to maintain our tactically cautious stance because of external risks — volatility in bond markets and geopolitical developments — as well as the potential for investors to become more risk-averse as year-end approaches.
Greek systemic banks are expected to report another set of strong quarterly results for the third quarter of 2026, driven by stronger revenue, cost discipline and favourable asset-quality trends.
Revenue
The path of key interest rates is proving more favourable than initially expected, prompting asset repricing which, together with low deposit betas, is providing a significant boost to banks’ net interest margins (NIMs).
Credit expansion remains strong year on year, with net loans up 10%. However, the quarterly increase is expected to be somewhat more modest than in previous quarters, at around 1% quarter on quarter according to our estimates, reflecting the seasonally weaker performance in the third quarter. It is worth noting that some press reports point to an acceleration in retail lending, mainly driven by mortgages, although this remains to be confirmed.
As a result, we expect NII to rise by 4% quarter on quarter and 11% year on year to €2.26bn for the four systemic banks in the third quarter of 2026, with NIM improving by 3 basis points quarter on quarter to 2.48%. Fee and commission income (F&C income) is also expected to be somewhat lower than in the previous quarter, by around 7% according to our estimates, reflecting slower growth in business volumes as well as some one-off items in the second quarter.
Year on year, however, it is expected to rise by around 17%, driven by healthy organic growth and inorganic initiatives. Finally, trading and other income are expected to be somewhat lower quarter on quarter, as volatility in bond markets may affect trading gains in the third quarter.
Total revenue is therefore expected to reach €3.05bn, up 15% year on year and flat quarter on quarter.
Costs
Operating expenses are expected to rise by around 10% year on year, reflecting wage inflation, higher IT spending and integration costs, as well as the inclusion of acquired entities in many cases.
On a like-for-like basis, growth is expected to range from the mid to high single digits. Importantly, cost growth is expected to remain notably below revenue growth, leaving the sector’s cost-to-core-income ratio broadly contained at around 37%.
Asset quality
Underlying asset quality is expected to remain favourable. The sector’s non-performing exposure (NPE) ratio is forecast to remain unchanged at 2.7%, while the cost of credit risk (CoR) is expected to come in at around 50 basis points, comfortably within the target ranges set by banks for the full credit cycle and keeping the coverage ratio at a healthy 75%.
Regulatory capital and tangible book value
Regulatory capital ratios are also expected to remain strong, with average CET1 at 14.9% and a marginal quarter-on-quarter improvement, as organic capital generation, together with some synthetic securitisations, is expected to more than offset balance-sheet expansion and dividend accruals.
Tangible book value per share (TBV) is expected to remain broadly unchanged quarter on quarter, as all the systemic banks paid their final dividends during the third quarter.
One-off items
As for one-off items, we expect some charges related to the social contributions already announced and, potentially, additional provisions aimed at further de-risking balance sheets.
Profitability
Looking at sector profitability, pre-provision profits are expected to reach €1.98bn (up 17% year on year and flat quarter on quarter), reported net profit is forecast at €1.25bn (up 18% year on year and down 7% quarter on quarter), while normalised net profit is expected to come in at €1.3bn (up 19% year on year and down 1.1% quarter on quarter).
Despite the decline from the exceptionally strong second quarter of 2026, profitability metrics remain healthy, with normalised RoTE forecast at 16.2%.
Deposits
Finally, deposit momentum is expected to remain supportive, with deposits at the four systemic banks forecast to reach €278bn (up 9% year on year and 1% quarter on quarter), while the average loan-to-deposit ratio is expected to remain at a comfortable 69%.