Volume 28 Number 2, May – August 2026

UNDERSTANDING THE KEY DRIVERS OF NON-PERFORMING LOANS IN GREECE

Nikolaos Kalantzopoulos, Athanasios Mandilas, Stavros Valsamidis and Dimitrios Kourtidis

This study investigates the key factors influencing the evolution of non-performing loans (NPLs) in Greece, during and after the financial crisis, which severely affected the Greek banking sector. Greece documented the highest NPL ratio among the European countries, reflecting the economic effects of the crisis. Using data pertaining to the period from 2004 to 2018, regression analysis was applied to assess the influence of the macroeconomic and banking variables. The data were mainly derived from the Bank of Greece and the Hellenic Statistical Authority. The findings highlight a strong correlation between NPLs and the macroeconomic factors which significantly affected the Greek banking system. Addressing NPLs is a challenge, and effective resolution requires reversing the impact of the crisis and restoring growth in order to support the recovery of the banking sector. While focused on Greece, a broader Eurozone data analysis is suggested due to the fact that the EU economies are interlinked. While several studies have examined the determinants of non-performing loans in Greece so far, this study contributes to the topic by applying an extensive regression model and incorporating a broad range of variables.