Greek banks are closely monitoring the ongoing conflict between the United States and Iran, as its potential economic fallout could disrupt their operational plans for the next three years. Bank executives emphasize that the duration of the conflict will largely determine its macroeconomic impact, which in turn influences profitability and strategic objectives.
A source from a major Greek banking group told media outlets that it is too early to provide definitive forecasts. “Everything depends on how long it takes for tensions to ease,” the source said, noting that current capital adequacy, liquidity, and profitability levels provide banks with a buffer against potential shocks.
Assumptions Behind Bank Plans
So far, major Greek banks, including Eurobank and the National Bank of Greece, have published projections for key financial metrics through 2028. These forecasts rely on several assumptions:
- Interest rates remain near current levels until the end of 2026, with only modest increases afterward.
- Economic growth exceeds the Eurozone average in all operating countries (Greece, Bulgaria, Cyprus).
- Inflation stabilizes slightly above 2%.
- Real estate prices continue to rise, though at a slower pace than in 2025.
- Unemployment declines, increasing disposable household income in Greece.
Potential Risks
Should the conflict persist, energy prices could remain elevated, fueling inflationary pressures. This scenario may prompt the European Central Bank to raise interest rates, affecting credit expansion plans and net interest income.
Higher costs and slower growth could also reduce disposable income and corporate profitability, increasing the likelihood of non-performing loans. Asset management operations, a major source of fee income, may be impacted if investors shift toward safer assets, reducing demand for mutual funds.
Impact on Dividends
If profitability forecasts are not met due to these risks, Greek banks may adopt more conservative dividend policies to maintain strong capital buffers, ensuring resilience in an uncertain global environment.
