The board chairman of the National Bank of Greece and the Hellenic Bank Association, Gkikas Hardouvelis, on Monday spoke about the current state of Greece's banking system and the great distance Greek banks have covered in recent years, as well as their future prospects in the demanding and challenging domestic and global economic environment.

In the latest stress tests of 2023, the four Greek systemic banks were respectively ranked 5th, 12th, 13th, and 19th among 109 systemic banks, which places Greece as the fourth best country in terms of the banking system's stability in the EU-27 and the first in Southern Europe, he said.

Hardouvelis was addressing the "Risk Management & Compliance 2024" conference organised by Boussias events at the Athens Concert Hall.

He noted that banks internationally have a comparatively smaller capitalisation size compared to the giant technology companies. However, their systemic importance is high due to their higher leverage and multifaceted presence in the economy. Compared to the US, European banks are comparatively less capitalised. This is largely because the European banking sector is fragmented due to the absence of a banking union and the higher costs of the supervisory framework. As far as Greece is concerned, the relative size and capitalisation of the banking sector is smaller compared to the corresponding European ones.

Hardouvelis also stated that Greek banks have in the last decade significantly improved their position and financial figures, guided by the recovery of the Greek economy. As he explained, the index of non-performing exposures (loans) has shrunk significantly to a single-digit percentage, while there is room for and further improvement towards the European average. In addition, the capital adequacy ratios of Greek banks are strong and very close to the corresponding European average, while the liquidity ratios far exceed the minimum requirements and the European average.

Bank profitability can be maintained at high levels due to increased bank operations in an economy that is continuing to grow, he said.