Greek banks took center stage in discussions during the Goldman Sachs conference held in London between Nov. 18 and Nov. 19. The primary focus of the conference was the broader sector of the Central and Eastern Europe, Middle East, and Africa (CEEMEA) region.
Goldman Sachs’ reports reveal that banks with lower absolute valuations, namely Piraeus and Alpha bank, were of greater focus of attention during investor meetings compared to other credit institutions.
Another key topic of discussion with investors was the upgrade of medium-term guidance for the 2025-2026 period by several banks, as well as the new forecasts based on a scenario of lower-than-expected ECB interest rates.
Goldman Sachs claims that investors were primarily interested in the issue of deferred taxation, expecting that the announced accelerated depreciation of Deferred Tax Credits (DTC) would help Greek banks raise dividend payout ratios more quickly.
In this context, it was noted that investors are differentiating their positions in Greek banks based, first of all, on the sensitivity of the net interest margin (NIM) to interest rate cuts, secondly on the normalized organic capital generation in the medium term, and furthermore, on capital allocation priorities.
It should be noted that on Oct. 22, Goldman Sachs made a slight downward revision of its profit forecasts for Greek banks, following the European Central Bank’s rate cut on the17th of the same month.
Goldman Sachs’ new forecast now anticipates the ECB’s interest rate at the end of 2024, 2025, and 2026 to be 3%, 2%, and 2%, respectively, compared to its previous prediction of 3.25%, 2.25%, and 2.25%.
