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Goldman Sachs Puts Greek Banks Ahead Of Spain In A More Selective European Banking Market

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.

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.

Limassol Port Electrification Awaits Grid Connection And EU Funding

Plans to equip Limassol port with shore-side electricity are advancing at the technical level, but unresolved administrative procedures, a pending grid connection and the need to secure European funding continue to delay implementation.

The proposed shore-power system, also known as cold ironing, would allow vessels to connect to electricity while berthed, reducing reliance on onboard engines and cutting emissions and noise in the surrounding area.

Technical Studies Near Completion

Transport Minister Evi Tsolaki said work is progressing through the EU-backed DecarbonLim programme, which is preparing the technical assessment and feasibility study required before construction can begin. The ministry is seeking regular updates from the Cyprus Ports Authority on the studies’ completion timetable.

The initiative also involves Frederick University, Eurogate Container Terminal Limassol, DP World Limassol, the Electricity Authority of Cyprus, the Cyprus Transmission System Operator and Limassol Municipality.

Grid Connection Remains A Key Hurdle

Despite progress on the studies, construction cannot proceed until the project secures a connection to the national transmission network.

Tsolaki said the ministry has requested land from the Department of Lands and Surveys for an electricity substation. Once the site is allocated, the relevant applications can be submitted to the Cyprus Transmission System Operator to advance the grid-connection process.

Until these steps are completed, the project will remain in the preparatory phase, even if the technical studies are finalised.

European Funding Adds Urgency

The feasibility work under DecarbonLim will support an application for construction financing, Tsolaki said. A competitive European funding call is currently open, and the ministry intends to submit an application within the required timeframe.

The funding window has raised concerns in parliament. MP Fotini Tsiridou warned that further delays could undermine Cyprus’ chances of securing EU support, noting that similar port electrification projects elsewhere in the bloc have already received funding.

Speaking to Entrepreneurial Limassol, published by the Limassol Chamber of Commerce and Industry, Tsiridou said she had observed some progress but had yet to receive a formal response to her parliamentary question.

Environmental And Commercial Benefits

Tsiridou argued that shore-side electricity would deliver benefits beyond emissions reductions, including less noise and air pollution for residents near the port.

“Our port should not be disconnected from the rest of the city,” she said, describing shore-power infrastructure as both a necessity and a European obligation.

Across Europe, port electrification is increasingly linked to environmental performance and competitiveness. By allowing compatible vessels to switch off auxiliary engines while docked, shore-power systems can reduce local emissions and noise while supporting wider decarbonisation goals.

Construction Timetable Still Unclear

The Cyprus Ports Authority signed a contract with DBA S.p.A. in July 2025 for a comprehensive study of the system’s technical, economic and environmental requirements. The work was intended to establish the basis for installation and identify any necessary port infrastructure upgrades.

More than a year later, key steps concerning land allocation, grid connection and financing remain unresolved. No timetable has been announced for completing these procedures or submitting the final funding application.

Limassol’s shore-power project therefore remains between planning and implementation. Its next milestones are securing the substation site, progressing the transmission-network application and obtaining construction financing. Until these are in place, the port’s transition to shore-side electricity cannot move into the construction phase.

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