UBS sees a significant rise in Greek bank shares, while UBS says that capital distributions to shareholders may exceed management forecasts. Analysts stress that the domestic banking system is supporting the Greek economy's recovery story, while the risk versus reward is attractive. UBS says banks are well positioned to benefit from the Recovery Fund's capital and finance the growth of the Greek economy.  

LOAN GROWTH

The Swiss bank expects a strong corporate and business funding cycle and an 8.7% annual growth in non-performing loans over the 2023-2026 timeframe. Loan growth is offsetting the peak in interest rates, while red loans have fallen significantly and credit risk is now low.

Great ECONOMIC GROWTH

Analysts forecast that the Greek economy will grow faster than the Eurozone average, boosted by investment, Recovery Fund capital, and bank financing. 

TARGET PRICES

Specifically, UBS gives:

• a target price of €2.74 for Eurobank (upside 38%), with analysts pointing to the acquisition of Hellenic, geographical diversification in Cyprus and Bulgaria, high profitability and capital flexibility as positives. The negatives include higher funding costs.
• target price at €11.20 for Νational Bank (upside 56%), which is singled out as a top pick for the quality of its exposure to the recovery story, high profitability, strong capital position, good credit quality and the potential for capital distribution beyond the relevant plans
• target price at €5.70 for Piraeus Bank (upside 50%), and is described as a top pick for its rerating potential, its remarkable recovery story and good profitability, noting however that its capital position is weaker 
•  target price at €2.32 for Alpha Bank (upside 45%), with UBS noting that the bank is a leader in corporate lending, with its capital boosted by the UniCredit deal in Romania, but it has lower profitability, a lower net interest margin but high capital distribution prospects relative to its capitalisation