International financial services firm UBS says the valuation of the stocks of the National Bank of Greece (NBG) remains an appealing prospect for investors based on estimates although they have recovered from the lows of the fourth quarter of last year.
The Swiss bank notes that while underlying profitability is expected to decline as interest rates fall, it could increase over time as distributions rise, with ROTE projected at 18.8%, assuming a CET1 ratio of 14% by 2026.
In this context, UBS maintains its “buy” recommendation with a price target of €11.20.
Earlier this week, the National Bank of Greece provided key trends ahead of its February 28 earnings release. While lower interest rates have begun to impact net interest income (NII), as expected, a strong year in earnings allowed for additional one-off charges of approximately €120 million in the fourth quarter.
These charges include provisions for the Voluntary Exit Scheme (VES), in addition to ~€80 million in charges recorded over the first nine months, including the cost of stock placement.
UBS expects that the focus of the earnings report will be on the bank’s outlook and the updated business plan rather than on fourth-quarter trends. It is worth noting that the National Bank of Greece’s fourth-quarter results, like those of other banks, will be accompanied by an update to its medium-term business plan, extending the projections to include the year 2027.
Source: tovima.com
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