UBS is positive about Greek banks in a report published by UBS with its estimates for the European banking sector in 2025. The analysts recommend "buy" for all four Greek systemics, ranking Ethnik Bank among their European top picks. 

CAUTION IN EUROPE

UBS stresses that investors are very cautious about the outlook for European banks over an 18-month horizon, due to the reduction in interest rates and the ECB's change in monetary policy. Which will reduce their interest income and profit margins. However, the firm's estimates call for total returns of 25% on European banks, 30% above European stock market returns, which are expected to lose -5%. 

CHANGE OF SCENERY IN GREECE

As far as the domestic banking system is concerned, UBS takes an even more positive stance. It says nine-month figures were ahead of forecasts, while their revenues are showing resilience and there are strong credit expansion trends. This is due to an increase in business loans, and the banks' portfolio mix has also become more qualitative and balanced. 

THE DEFERRED TAP

On the banks' disclosed plans to accelerate deferred tax amortization, analysts call it a "catalyst" for their growth, as DTCs are expected to be zeroed out over a decade. With faster DTC amortization, the potential for large capital distributions increases, with banks already increasing payout commitments in 2024 and aiming to raise them to 50% in 2025. 

TARGET PRICES

Overall, analysts note that Greek banks are among the cheapest, both in Europe and emerging markets, based on P/TNAV vs. ROTE. Note that UBS sets target prices:

€11.2 for International Bank (upside of 50%)
€5.7 for Piraeus Bank (+47%)
€2.4 for Alpha Bank (+47%)
€2.8 for Eurobank (+23%)

NATIONAL BANK

UBS distinguishes the National Bank as a standout in Europe. This is because it has strong liquidity, a constantly expanding portfolio of healthy loans, and is described as 'the most profitable bank in Greece with a strong capital base and less exposed to the risk of interest rate cuts'. Indeed, analysts expect that ETE will make larger capital distributions than it has forecast.