Goldman Sachs has named Greek banks among its highest-conviction European banking ideas for September and the final quarter of 2026, arguing that their valuations remain compelling relative to peers, especially in Spain.
A Valuation Gap At The Center Of The Call
The investment bank described Greek lenders as a top long rate sensitive choice, a designation that suggests they should benefit disproportionately from the current interest-rate backdrop. In Goldman Sachs’ view, the key opportunity lies in the widening valuation gap between Greek and Spanish banks, even though the two markets share broadly similar underlying fundamentals.
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That gap is becoming more important as investors demand greater selectivity across European financials. Goldman Sachs noted that valuations in markets such as Spain and Sweden have moved materially higher, making it harder to find clear upside without paying a premium.
Spain Moves Into The Short Column
The bank’s caution is most visible in Spain, where it has placed lenders including Sabadell and Unicaja among its preferred short positions. By describing those names as expensive, Goldman Sachs is effectively signalling a preference for Greek banks over their Spanish counterparts.
At the same time, Greek lenders have a near-term technical catalyst on their side. Goldman Sachs expects them to be included in the SX7E European banking index in September, a move that could support flows and improve market visibility.
A Supportive Backdrop For European Banks
The broader sector picture remains constructive. Second-quarter earnings have continued to drive upward revisions to forecasts, reinforcing the view that European banks are still benefiting from a resilient operating environment.
Higher-for-longer interest rates remain supportive of net interest income, while strong shareholder returns continue to underpin investor appetite. Even after recent gains, European banks still trade at a discount to the wider equity market and to US banks, leaving room for further re-rating if earnings momentum holds.
Why Greek Banks Stand Out
For Goldman Sachs, the case for Greek lenders rests on three converging forces: improving earnings momentum across European banking, materially lower relative valuations than Spanish banks and the immediate catalyst of SX7E inclusion.
Taken together, those factors place Greek banks at the top of Goldman Sachs’ preferred list among lenders best positioned to benefit from the current rate environment.
