The resilience of the Greek economy remains a key pillar of the positive investment narrative for Greek banks, according to a new report by Jefferies, which maintains a buy recommendation for Alpha Bank, Eurobank, National Bank of Greece and Piraeus Bank.

The investment bank said Greek banks operate in one of the most attractive macroeconomic environments in Europe, adding that they continue to trade at a discount of around 15 per cent versus the wider European banking sector, which it sees as supportive of the sector’s valuation case.

In its report, the findings of which were shared by Greek business outlet Newmoney, Jefferies focused on recent economic data following Greece’s first quarter 2026 GDP figures, noting that the country continues to outperform the European Union in terms of growth.

Greece recorded real GDP growth of 2.1 per cent in 2025, compared with 1.4 per cent for the EU, marking the fifth consecutive year of outperformance versus the bloc.

The trend continued into 2026, with Greece posting 2.0 per cent year-on-year growth in the first quarter, compared with just 0.7 per cent across the European Union, according to the report.

Jefferies said the main drivers of expansion remain investment and private consumption, while the Bank of Greece forecasts GDP growth of around 2 per cent for 2027 to 2028, even after the completion of NextGenerationEU funding in 2026.

The report also referenced comments by the governor of the Bank of Greece, who said the country has shifted its focus from recovery to what he called “strategic acceleration”, with the aim of achieving long-term convergence with the European Union through closing the investment gap and avoiding past macroeconomic imbalances.

On the fiscal side, Jefferies highlighted Greece’s improved position, noting that it was one of only five European countries to record a budget surplus in 2025.

The surplus reached 1.7 per cent of GDP, compared with an EU average deficit of 3.1 per cent, while the primary surplus stood at 4.9 per cent of GDP.

For 2026, Jefferies expects Greece to maintain a strong fiscal position, forecasting a primary surplus of 3.2 per cent of GDP.

The bank also pointed to the government’s ability to introduce €0.8bn in support measures following the strong 2025 fiscal outcome, aimed at easing pressure from higher energy prices.

Between January and April 2026, the primary budget balance exceeded expectations by €2.9bn, reflecting stronger-than-anticipated revenues.

Debt reduction remains another key theme in the report. Although Greece’s public debt remains high at 146 per cent of GDP, compared with 89 per cent in the EU, Jefferies noted that the ratio has fallen significantly over time.

Greek debt has declined by 40 per cent since 2016 and around 60 per cent since 2020, supported by sustained growth and fiscal discipline.

Based on International Monetary Fund projections, Greece is expected to fall below Italy this year and below France by 2029, with debt projected to drop below 100 per cent of GDP by 2035.

For the banking sector, Jefferies said the most immediate benefit of the macroeconomic environment is reflected in credit expansion.

In April, total lending in Greece grew by 8 per cent, with business loans rising by 11 per cent, which the report identified as the main driver of credit growth.

Jefferies said these rates remain well above the European Union average, underlining stronger lending dynamics in Greece.

Investment activity also remains central to the outlook. Investment rose by 8.9 per cent in 2025 and is expected to increase by a further 8.8 per cent in 2026.

However, investment still accounts for only 17 per cent of GDP, compared with 21 per cent in the EU, suggesting further convergence potential.

Additional support is expected from the Recovery Fund lending programme, under which Greece is entitled to €18bn, of which €5.8bn has already been disbursed to final beneficiaries, alongside €3.9bn in bank co-financing.

Jefferies concluded that the combination of stronger growth, fiscal discipline, declining debt and robust credit demand continues to place Greek banks in a favourable position relative to their European peers.