Rating agency Jefferies upgraded the target prices for three Greek banks, following the May 21 elections.
According to the report, Greece is one step away from obtaining investment grade, while the expected increase in revenues from tourism will give impetus to other sectors, especially the domestic banking sector.
Target prices
The first choice of Jefferies is National Bank, with the agency’s analysts recommending a buy and the forecasts for the price – target rising to 7.30 euros from the 6.50 of the previous estimate.
They are followed by Eurobank and Piraeus, where the house recommends holding and slightly raises the forecasts for target prices. For Eurobank, the new price is 1.70 euros. from 1.65, while for Piraeus 2.70 euros from 2.50.
On the contrary. Jefferies is cautious on Alpha Bank, mainly due to the higher risk than collateral and recommends underperform, with a target price of 1.10 euros.
Interest rates
Interest rate hikes have already started to affect bank assets due to the high percentage of floating rate loans. The best performances in this area are recorded by Ethniki and Piraeus.
Red loans
Meanwhile, the American house makes a special reference to the red loans of the banks, highlighting the positive signs, as the credit institutions have managed to reduce their non-performing loans, to a point much lower than their forecasts. And in this area, Jeffries notes the best position of Ethniki compared to the other three banks.
Points of caution
Jefferies, beyond the optimistic estimates, draws the attention of the banks to two key points, stating that they should be the main priorities of the administrations.
One point, is the risks, where banks should take appropriate measures to reduce them, and the other, equally important, are the margins and betas of the deposits. The international house points out that the banks have the ability to cope with these two critical issues, with the National Bank being in a strong position compared to the rest of the banks.
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