Greek Banks: From zero to hero (Alpha, NBG and Eurobank stay BUY, Piraeus downgraded to HOLD)
We retain our positive long-term view on the Greek banks. We believe that the sector should benefit from the cyclical macro recovery over the next three-to-four years, leading to a gradual return to banking normality. In our view, by 2022E, the Greek banks should be able to clear a large part of the NPE book, stabilise and grow pre-provision profitability, and generate a ROTE of >7%. On the other hand, the Greek banks are up c.85% ytd and shares could take a breather in the short term, as multiples move closer to the depressed P/BVs of their SE European peers. Eurobank (BUY, price target (PT) EUR 1.2/share) remains our preferred play, due to its clear path to lowering arrears and generating ROTE.
Eurobank Ergasias and its subsidiaries are organized in the following reportable segments: Retail. which incorporates customer current accounts, savings, deposits and investment savings products, credit and debit cards, consumer loans, small business banking and mortgages; Corporate, which incorporates direct debit facilities, current accounts, deposits, overdrafts, loan and other credit facilities, foreign currency and derivative products; Wealth Management, which incorporates private banking services; Global and Capital Markets, which incorporates investment banking services; and International, which incorporates operations in Romania, Bulgaria, Serbia, Cyprus, Ukraine and Luxembourg.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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