Goldman Sachs has adjusted its estimates for the profitability levels and target prices of the shares of the four systemic banks against the backdrop of the new interest rate policy of the ECB. 

• Piraeus Bank: €5.40 from €5.90
• National Bank: €10.60 from €11
• Eurobank: €2.50 from €2.70 (excluding the impact of the recent consolidation of Hellenic Bank)
• Alpha Bank: €1.90 from €2

THE METRICS

The US investment house values Greek stocks using price-to-tangible book value (P/TBV) ratios:

• National Bank: 0.82 times 
•  Eurobank: 0.84 times
• Piraeus Bank: 0.66 times
• Alpha Bank: 0.5 times

Goldman Sachs maintains its estimates on asset quality trends, with the non-performing exposure (NPE) ratio at 3.6% for the third quarter. In H1, Greek banks outperformed on risk cost guidance, which they revised lower.

LOANS AND THE ECB

The negative 0.9% expansion in August lending is not a concern, as they estimate a 0.7% rise in September in Q3. Analysts are now incorporating into their estimates the house economists' revised estimates of eurozone-wide interest rates. The rating agency also said the ECB will cut interest rates by 25 basis points at each meeting until they finally reach 2% in June 2025. The US agency expects ECB interest rates to be as follows at the end of each year: - 2024: 3% (vs. 3.25% before) 2025: 2% (vs. 2.25%) 2026: 2% (vs. 2.25%)

LOWER ESTIMATES This translates into an average revision in net interest income of:

• 2024: 0%
• 2025: -5%
• 2026: -2% 
• 2027: -1%

and a revision to EPS (earnings per share) at the above times:

• 2024: 0%
• 2025: -6%
• 2026: -3%
• 2027: -1%

As a result, its projections for Greek banks' interest income in 2025 are lower by:

• 5% for Alpha Bank 
• 8% for Eurobank 
• 3% for National Bank
• 5% for Piraeus Bank