A possible deal between Piraeus Bank and CVC for the acquisition of Hellenic General Insurance has attracted the interest of international companies. Swiss bank UBS estimates a 4% upside impact on Piraeus Bank's earnings per share in 2026 in the event of a 70% takeover of Hellenic General Insurance by the CVC fund.

The firm maintains a target price of €5.7 and a "buy" recommendation on the stock, while underlining that Piraeus Bank is one of the top picks. "Piraeus Bank's share appears as one of the cheapest stocks in Europe among the stocks we cover and also shows a good valuation picture among Greek and European banks, as it is trading at a price-to-earnings (P/E) multiple of only 5 times for the year," the Swiss house points out.

GOLDMAN SACHS

Goldman notes that taking into account the expected impact of the acquisition by around 150 basis points on the CET1 ratio, its forecast for the group's CET1 ratio will fall from 15.6%/16.4%/16.7% in 2025/26/27 to 14.1%/14.9%/15.2%. This would imply a safety margin in the CET1 ratio of over 300 basis points, compared to the minimum required CET1 level set by the regulator.

THE OUTPUT

This is a significant capital buffer, equivalent to €1.1 billion of capital in 2025 or approximately 21% of Piraeus' capitalization (based on the share price on 5 February 2025). In its view, these capital buffers will be sufficient for Piraeus to maintain the 30%/40%/50%/50% dividend payout ratios it has calculated for the period 2024-27.

AUTONOMOUS

Autonomous notes that Piraeus expects a significant capital consumption from the deal (150 bps CET1), which could be mitigated by the implementation of the Danish Compromise, while management does not mention any change in capital distribution plans to shareholders. The indicated price implies approximately 1.5x price to Tier 1 share capital and 8.4x P/E based on Hellenic General Insurance's pro forma financials for 2023. If approved by regulators, he expects that leveraging Piraeus' capital through a likely enhancement deal would be a reasonable strategy.