Positive reports from major international banks on Greek banks continue, following the strong figures announced in the first nine months of the year.

Bank of America (BofA) believes that the growth story is strong and now increasingly convincing. Which makes bank stocks more attractive. According to analysts, the reasons are as follows:

• There are very cheap valuations compared to other banks in Europe
• Shareholder rewards through dividends are constantly increasing, as bank managements has reported recently
• Credit expansion is being boosted by new loans
• Red loans are declining and non-performing loans are increasing
• Deferred taxes, which were also a thorn in the side of the SSM, will be amortised faster than forecast
• Although the ECB's interest rate cut will reduce net interest income, loans will rise and make up for the shortfall.

THE TARGET PRICES

With P/E at 5.0-6.5x for 2025E and P/TBV at 0.5-0.8x P/TBV vs. 12.5% average RoTE and 9% total return, the sector is attractive, analysts note, and give the following target prices:

• for Alpha Bank €2.06, with a 29% upside
• for Eurobank €2.84, with a 42% upside
• for Piraeus €5,32, with an upside of 38%
• for National Bank €8.44, with a margin of 15%

WHAT S&P SEES

For its part, S&P remains positive on the domestic banking system, stressing that banks will continue to show positive results in 2025. Their dividends, improving balance sheets, profits and credit expansion play a key role in growth, as does planning for the amortization of deferred taxes. Analysts also include the smoothing of risk costs and increased lending among the positives, which will support banks' performance in the future. 

QUALITY OF CAPITAL

However, in addition to the above, the quality of capital will also play an important role in upgrading the ratings of the systemic banks. Although the quality of the capital adequacy of the rating agencies is improving, it remains weak compared to other banks in Europe and the prospects for improvement remain low. Although the management's announcement of deferred tax amortization is positive, it will happen gradually and in small amounts. Finally, S&P stresses that there is positive organic capital generation that is improving.