Morgan Stanley selects Eurobank and Alpha Bank shares for 2025, stating that the domestic banking system is the growth story of 2025 for the Central and Eastern Europe, Middle East and Africa (CEEMEA) region.

The house says the target values are:

• Eurobank: €2.61
• National Bank: €9.05 
• Piraeus: €4.96
• Alpha Bank: €2.11

THE TWO OPTIONS

"We maintained our outperformance versus market ratings on the four Greek banks until November last year, but with our economists expecting faster rate cuts and a final ECB rate at 1% as early as 2026, we have become more selective. For early 2025, Eurobank and Alpha Bank are our two picks with overweight ratings, while for the shares of National Bank and Piraeus Bank the ratings are now equal-weight," the US house explains.

EUROBANK

Analysts point out that there is a big upside for Eurobank, as the bank is growing, incorporates the value of Hellenic Bank in Cyprus and has greater earnings resilience compared to other banks. At the same time, it has less exposure to the risk of a decline in interest rate revenues as the European Central Bank has changed its monetary policy. 

ALPHA BANK

As for Alpha, Morgan Stanley notes that it has a price to tangible book value (P/TBV) of 0.5 times and thus has a RoTE of 10.6%. It considers management's dividend policy for 2024-2026 to be significant, placing it at 9.7%, while at the same time it has mitigated the hit to interest income. 

BANKING SYSTEM

Growth in the Greek economy, coupled with credit expansion and shareholder rewards, should lead to a rise in equities and a strengthening of the domestic banking system. At the same time, in 2025-2026, the average non-performing loans are expected to increase by 7%, while net interest income growth is expected to be 5% lower in 2025.