UBS upgrades its target price for Eurobank to €3 from €2.7 previously and maintains its buy recommendation while raising its earnings per share estimate, with a significant contribution to these estimates due to the full integration of Hellenic Bank. 

THE HELLENIC BANK

According to UBS, the stake in Hellenic Bank will reach 93.5% by Q2 2025 and 100% by Q3, and this will result in a reduction in the minority interest from €75 million in FY2024 to €39 million in FY2025 and zero from FY2026 onwards. This also results in an upgrade of the earnings per share estimate, which UBS expects to improve by 5.5% in 2025, by 8.3% in 2026, and by 9.5% in 2027.

THE Bulgari MARKET 

At the same time, the acquisition of Hellenic Bank, as well as the development of activities in the Bulgarian market, is expected to support interest income (NII), and there is the possibility of converting surplus funds into loans. It is estimated that NII will grow by 5% per annum over the period 2023–2026, reaching up to €2.6 billion by 2026, some 5% above management's business plan.

THE ESTIMATES

In terms of the CET 1 ratio, the report highlights that it will exceed the 17% level in the medium term, with a forecast that there will be an increase in dividends to shareholders in the coming years. The share buybacks included in the total payout also boost the earnings per share trend (40% of 2024 accruals and 30% of 2025 accruals).