Banks’ high profit potential
JPMorgan research notes latest sector moves, raises share price target for three of the ‘big four’
JPMorgan remains positive about the prospects of Greek banks in a research report reflecting their second-quarter results.
Analyzing the profile of each of the “big four” banks (Alpha, Eurobank, National and Piraeus), the US bank notes the catalysts that could unlock more value and profits for shareholders.
On Alpha Bank, JPMorgan believes that key to its development is the expected conclusion of a series of transactions with Italy’s UniCredit. These involve the merger of their respective subsidiaries in Romania, the acquisition of a majority stake (51%) in AlphaLife and the availability of UniCredit portfolio management and insurance products, and the acquisition by UniCredit of the remaining 9% share in Alpha still held by the Financial Stability Fund.
JPMorgan notes Alpha shares’ relative underperformance so far given a lower return on tangible equity (ROTE), a higher percentage of nonperforming exposures and lower provision coverage. Given this, it reduces the target share price to €2.30 from €2.40, but notes its high core equity tier 1 (CET1), that indicates prospects of high returns, has not yet been taken into account by investors. JPMorgan forecasts CET1 at 17.5% in 2026 and ROTE at 9.5%.
On Eurobank, the research notes that the great catalyst is the completion of the Hellenic Bank acquisition. It raises the share price target to €2.80 from €2.40 and estimates 2026 ROTE at 13%, with the average from 2024-2026 at 15%. Despite the acquisition, Eurobank’s CET1 will average 17% from 2024-26, providing room for higher dividends and likely share buybacks.
JPMorgan expects the Financial Stability Fund to divest itself from the remaining 18% stake in National Bank. With this in mind, it raises the share price target to €9.70 from €8.40. Expected CET1 for 2026 is 18.2% and ROTE, 13.2%.
On Piraeus Bank, JPMorgan notes the steep reduction in NPEs – more than €20 billion since 2020 – and net 2023 profit reaching €1 billion in 2023, a ROTE of 17%. It thus raises the price target to €5.90 from €5.35.
