Deutsche Bank: Greek Banks Outperforming Across Europe

Deutsche Bank remains bullish on Greek banks, raising its target prices across the board while reiterating its view that they are among the strongest performers in Europe. Despite a significant stock market rally, the German lender sees continued upside potential driven by robust fundamentals, strong capital returns, and solid loan expansion.

Revised Target Prices Reflect Strong Momentum

Deutsche Bank’s new price targets for Greek banks are as follows:

• National Bank of Greece (NBG): €13.40 (up from €11.85) – rating downgraded to Hold
• Eurobank: €3.85 (from €3.60) – Buy
• Alpha Bank: €3.85 (from €3.35) – Buy
• Piraeus Bank: €7.70 (from €6.65) – Buy
• Bank of Cyprus: €8.70 (from €7.35) – Buy

“Greek banks continue to offer strong value creation potential, with improving capital returns and sector-leading loan growth,” the report notes, underlining their favorable positioning despite the recent market gains.

Q2 2025 Results Beat Expectations

The second quarter of 2025 saw Greek banks once again surpass analyst forecasts, continuing the strong momentum from previous quarters. Key drivers included:

• Strong credit expansion (over 10% YoY, up to 15% for Alpha and Piraeus)
• Rising fee income
• Improving cost of risk estimates

The report emphasizes that Greek banks remain “off-trend” in a positive way compared to their European peers, with improving metrics and value creation not yet fully priced in by markets.

NII Pressures to Ease – Recovery Ahead

While net interest income (NII) remains under some pressure due to declining interest rates, Deutsche Bank expects a sequential recovery in H2 2025, supported by:

• Loan volume growth
• Lower funding costs
• Increased contribution from bond portfolios
• Easing of loan repricing impacts

NII is projected to grow year-over-year in 2026, with acceleration expected in 2027, placing Greek banks in a stronger relative position across the European banking sector.

Valuation and Capital Efficiency Drive Preference

Deutsche Bank highlights a compelling investment case, combining:

• High loan growth rates
• Attractive valuations (2026 P/E: 8–10x, P/TBV: 1.0x–1.3x for RoTEs of 12–14%)
• Excess capital buffers, supporting higher distributions and dividend potential

Despite recent outperformance, Greek banks still trade at relatively modest multiples, especially when compared to broader European peers.

Stock-Specific Views

• National Bank of Greece (Hold): While operational performance remains outstanding, the stock is now fairly valued near its upgraded price target.
• Eurobank (Buy): Maintains top preference due to structural resilience and upside potential beyond market expectations.
• Alpha Bank (Buy): Continues to offer value despite the rally, backed by improving fundamentals.
• Piraeus Bank (Buy): Progress in capital and profitability strengthens investment case.
• Bank of Cyprus (Buy): Delivers consistently strong results, reinforcing confidence in its strategic execution.

Still Europe’s Top Banking Play

Deutsche Bank reaffirms that Greek banks remain the most attractive investment option in the European banking sector, thanks to a rare combination of growth, capital strength, and reasonable valuations.

“Even after their strong performance, we believe Greek banks still have room to outperform, especially as capital returns continue to improve,” the report concludes.

Source: pagenews.gr