Greek banks will show stronger growth than their European counterparts in 2025, driven by the increase in loans. Bank of America gives a buy recommendation for Eurobank, Piraeus Bank and Alpha Bank, while singling out the first in its banking top picks in the EEMEA category for 2025.
BY BANK
- Eurobank: €3.1 (upside 33%)
- Piraeus Bank: €5.3 (28%)
- Alpha Bank: €2.06 (21%)
LOANS AND INTEREST RATES
BofA expects Greek banks' non-performing loans to rise 7%-10% for the whole of 2024. While banks have not revised their loan growth forecasts for 2025–26, they are estimated to be upgraded, and it is noted that credit expansion in Greece remains a "bright spot" in Europe.
It is noted that 85%–90% of loans are floating rates and 75% of deposits are demand and savings deposits, which has been discounted given that the market expects ECB rates to reach 1.75%–2% in late 2025.
BofA makes the case for one of the highest dividend yields in the EEMEA region, with Eurobank and Ethniki expected to reach a 50% payout in 2024, with Alpha reaching the same point in 2025 and Piraeus in 2026. This implies a yield of 8%-10%, with a portion of this given through share buybacks.
COMMISSIONS
Regarding government measures on commissions, the hit to earnings is estimated at 1.5%–3.5% for 2025. BofA singles out Eurobank as the most profitable bank in Greece, with RoTE at the same or higher levels than Europe, as it is forecast at 15.5% for 2025 and 13.6% for 2026.
For Piraeus Bank, BofA notes that "normalisation" continues, while for Alpha Bank it says it is at the point of covering the lost ground of the 2024 underperformance.
