"Greek bank stocks represent an opportunity for investors after the recent correction," JP Morgan said in a new report. Analysts stress that now the domestic banking institution is "changing levels" as it accelerates the amortization of deferred tax liabilities and prepares for higher dividend distributions to shareholders. The report comes after Piraeus Bank announced the figures, highlighting that they show that the banks are strengthening their capital position and recording stable and sustainable profitability. 

EXPECTATION

Analysts stress that "the latest announcements signal the capital return strategy that banks are pursuing", predicting that payout increases will exceed 10% in 2025, reaching the European average. A further reason for recommending buying the shares is that valuations are attractive, with P/E at 5.4 times for 2025 and P/TBV at 0.6 times for a 12.1% ROE ratio and high earnings distribution potential.

THE OPPORTUNITY

The recent correction represents, according to JP Morgan, a buying opportunity. As the US bank points out, the sector has underperformed since March compared to Europe and the Middle East & Africa region. The reason is the oversupply of equities as well as the change in monetary policy by the European Central Bank. However, Greek banks' profitability is strong and EPS for 2024 and 2024 are revised up by +29% and +27%, respectively, compared to +13% and +12% for European banks.  SHARE

BUYBACKS 

Finally, JP Morgan points out that buybacks are an advantage, as each 10% payout in the form of share buybacks adds 2.1% to 2025 EPS. If the commitments of the banks' managements are implemented, this translates into a 4.1% to 4.6% increase in EPS next year alone.