Greek Banks: If you’re going through hell, keep going (Alpha, Eurobank, NBG and Piraeus stay BUY)
We retain our BUY ratings on all the Greek banks and expect 2019E to be a turnaround year for the sector, with substantial efforts to frontload NPEs, stabilise pre-provision profitability and preserve capital ratios. In our view, the Greek banks are moving out of the woods gradually and deserve better valuations, as the probability of a wipe out of the current shareholders has fallen substantially. We do caution, however, that the problems have not been resolved completely (NPEs remain high, coverage is tight, and the quality of capital is low) and the road ahead could be bumpy. In this volatile environment, we believe that Eurobank (BUY, price target (PT) EUR 1.0/share) stands out, with its clear path to lowering arrears and generating ROE.
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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