Deutsche Bank sees fresh inflows into Greek banks

Greek banks are preparing to enter the field of vision of major institutional investors, with Deutsche Bank forecasting fresh money after their inclusion in developed-market indexes and recognition of their strong capital positions.

The German bank says Greek stocks are poised for a structural shift. After years of attracting mainly investors focused on emerging markets, the normalization of Greece’s economy and banking sector could draw more traditional investors. Greece’s broad upgrade to investment grade by all rating agencies has already improved the eligibility of its stocks for index inclusion.

Three developments are expected to drive the change over the coming quarters. The four systemic Greek banks will become eligible for the pan-European STOXX Europe 600 and other developed European market indexes from Sept. 21, 2026. Deutsche Bank expects the immediate effect to be limited, but says passive inflows from developed-market benchmarks could reach several hundred million euros.

The larger milestone is expected in May 2027, when MSCI is set to upgrade the Greek market. FTSE Russell is also expected to reclassify Greece from an emerging to a developed market on the same day. The funds tracking these indexes are not large, so the direct impact may remain limited, but trading volumes in Greek banks are expected to receive a significant boost.

Because banks account for about three-quarters of the Greek market, the MSCI upgrade could help bring large new investors into the sector. Deutsche Bank cautions that net flows may not be entirely positive at first, as emerging-market investors could withdraw funds. Overall, it expects the changes to broaden Greece’s base of long-term institutional investors, even if the country retains only a very small position within the developed-market universe.