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UBS: “Buy” Rating for All Greek Banks – Strong Credit Momentum and Piraeus Seen as Most Undervalued

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Κώστας Καλλιαντέρης 12.08.2025 | 09:19 ΧΡΟΝΟΣ ΑΝΑΓΝΩΣΗΣ 2 '

Pagenews.gr / English Edition / UBS: “Buy” Rating for All Greek Banks – Strong Credit Momentum and Piraeus Seen as Most Undervalued

UBS has issued a bullish note on Greek banks, reiterating Buy ratings across the board and highlighting continued credit momentum, resilient profitability, and an expected gradual decline in cost of capital as key drivers for the sector.

In its latest comprehensive report, the Swiss investment bank points to strong credit expansion in Q2 2025, despite lower interest rates in the eurozone. It revises price targets upward for the systemic banks and singles out Piraeus Bankas the most undervalued stock in the sector, citing its highly attractive valuation.

Key Insights from the UBS Report:

Return on Tangible Equity (ROTE) for 2025 is forecasted to range between 11.6% (Alpha Bank) and 16.2% (Eurobank).
CET1 ratios remain solid, between 14.4% and 18.5%, supporting long-term stability and capital distributions.
Payout ratios are expected to range between 1.15% and 1.67%, bolstering the investment case.

Piraeus Leads on Valuation Metrics

UBS sees Piraeus Bank as the most undervalued among its peers, with an implied cost of equity at just 12.3% — one of the lowest in Europe. The stock is seen as offering the greatest upside, despite broader improvements in the sector’s fundamentals.

Eurobank, meanwhile, offers the highest upside among the more premium-valued banks, while National Bank of Greece (NBG) is praised for its capital allocation strategy, although much of its positive outlook is already reflected in current market valuations.

NII Pressures Easing

Despite a faster pace of rate cuts, UBS notes that net interest income (NII) contraction significantly moderated in Q2. Greek banks posted a modest -1.3% quarter-on-quarter drop in NII, versus -5% in Q1.

This resilience is attributed to stronger-than-expected credit expansion, allowing management teams to maintain full-year NII guidance for 2025.

Positive Outlook Maintained

UBS maintains that the Greek banking sector is positioned for sustained growth, backed by:

Robust credit demand
Strong capital buffers
Attractive dividend profiles
Supportive macro backdrop amid fiscal consolidation and recovery

The sector’s fundamentals, combined with low valuations relative to European peers, provide a compelling entry point for investors, the report concludes.

Source: pagenews.gr