The Greek banks emerged as “champions” once again in the Eurozone in terms of interest margin and bad loans, as shown by the latest data published today by the European Central Bank.

According to what concerns the second quarter of 2024, Greek banks continue to operate with interest margin 3.32% which it is among the highest in the Eurozone. Regarding bad loans, despite their large reduction that has been achieved in recent years, the red loan index (for the same period always) reaches 4.10% and is almost double the Eurozone average which is maintained at 2.30%.

In more detail, as shown by the ECB data, the interest margin of the Greek systemic banks was formed in the quarter of 2024 at 3.32%, while it is higher only in Slovenia 3.63%, in Lithuania 3.67% and in Latvia 3, 78%. On the contrary, the interest margin, i.e. the difference between the interest rates on deposits and loans in Belgium is only 1.41%, in Germany 1.07%, in Italy 2.31%, and in Portugal 2.96%.

Regarding the evolution of non-performing loans, a significant improvement is recorded as the relevant index has fallen from 5.70% a year ago (b half 2023) to 4.10%. However, it is almost twice (2.30%) the Eurozone average. Based on ECB data, Greek banks continue to have proportionally the most bad loans in the entire eurozone. Indicatively, it is stated that the relative index of bad loans is at 1.66% in Germany, at 1.64% in Belgium, at 2.67% in Italy and at 3.14% in Spain. In Cyprus the relative index has almost dropped to zero.

For the euro area as a whole, the non-performing loan (NPL) ratio excluding cash balances at central banks stood at 2.30% in the second quarter of 2024. The stock of non-performing loans (numerator) increased by 1.33 billion. euros to 356 billion euros, while the total of loans and advances (denominator) increased by 111.72 billion euros, to 15,456 billion euros, keeping the index stable compared to the previous quarter (2.31%).

Regarding the distribution of non-performing loans in the second quarter of 2024 by activity sector, the relative index was 3.57% for loans to non-financial companies (NFCs) (from 3.55% in the previous quarter and 3.38% before from one year) and to 2.23% for loans to households (from 2.24% in the previous quarter and 2.20% a year ago). The NPL ratio for loans to Non-Financial Enterprises (NFCs) secured by commercial real estate was stable at 4.61% (compared to 4.60% in the previous quarter), while for loans to households secured by residential real estate, the NPL ratio fell slightly to 1.58% (from 1.61% in the previous quarter).

The total percentage of non-performing loans that are in “Stage 2” (loans that show a problem in servicing them, but have not gone red) on all loans decreased to 9.45% (from 9.50% in the previous quarter) . The stage 2 ratio decreased to 13.57% for loans to MFIs and 8.80% for loans to households (from 13.60% and 8.84% respectively in the previous quarter)