JP Morgan Raises Bar for Greek Systemic Banks

Except for Eurobank, for which it retains the target price at €2.60, JP Morgan has increased its target prices for Alpha Bank to €2.50 from €2.20, National Bank of Greece to €8.40 from €8.10, and Piraeus Bank to €5.00 from €4.65

JP Morgan Raises Bar for Greek Systemic Banks

JP Morgan maintained its “overweight” recommendation for Greek banks, while raising its target prices, following revisions to earnings per share (EPS) estimates for the period 2023-2026.

Except for Eurobank, for which it retains the target price at €2.60, JP Morgan has increased its target prices for Alpha Bank to €2.50 from €2.20, National Bank of Greece to €8.40 from €8.10, and Piraeus Bank to €5.00 from €4.65.

JP Morgan sees significant improvement in the four Greek systemic banks’ trends for net interest income (NII), also revising its EPS estimates upward by an average of 5% for 2023 and 2024 and 8% for 2025.

Alpha Bank recently announced its ambition to achieve a >12% Return on Tangible Equity (ROTE) by 2025, targeting an increase in EPS with a cumulative annual growth rate (CAGR) of >20% between 2022 and 2025. JP Morgan values the 10% ROTE lower than the target, as it does not adjust capital for excess capital, indicating a potential increase to 11%.

JP Morgan expresses a preference for National Bank, citing high adaptability to higher interest rates, a stable deposit base, and a CET1 ratio of 17.9% in Q3 2023, projected to increase to >19% by 2025E, providing ample room for dividends from 2024 onward.

Eurobank is highlighted for having the highest normalized ROTE among the banks (13% by 2025) and a CET1 ratio of 16.4%, remaining steady and strong capital trajectory with a CET1 of 17.8% by 2025 after the merger with the National Bank.

Piraeus Bank, equipped with the necessary capital, has reduced non-performing exposures by >€20 billion since the end of 2020, aiming for an ambitious ROTE of 14% in 2023 and 12% in 2025. The bank targets the resumption of dividend payments from 2023 onwards, subject to regulatory approval.

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