Greek banking sector recovers but some risks remain

Significance Greek banks will serve as an important conduit for distributing funds from the EU’s Recovery and Resilience Facility (RRF) to the real sector of the Greek economy. Impacts Improved access to international capital markets will allow banks to tap bond markets for funding. The substantial stock of non-performing loans held within and outside the banking system will act as a brake on new loan issuance. Banks’ dividend payments will support share valuations and improve sentiment on the Athens Stock Exchange. The health of the domestic banks is an important factor for future rating upgrades of Greek sovereign credit rating.