Morgan Stanley has adopted a positive stance toward the Greek banking sector, initiating coverage of the systemic banks with an “overweight” rating for Alpha Bank, Eurobank, and Piraeus Bank.
The U.S. firm believes that the strong macroeconomic environment, ongoing credit expansion, and attractive valuations create room for further upside in the sector.
Morgan Stanley estimates that the Greek economy will continue to outperform the rest of Europe in the coming years, forecasting growth of 2.1% in 2026 and 2% in 2027. Domestic demand is expected to be the main driver of growth, supported by rising disposable income, public investment, the absorption of European funds, and foreign direct investment.
This positive environment translates into significant benefits for banks. The firm forecasts sustainable growth in business loans, a 3%-4% annual increase in deposits, a rise in fee income, and further improvement in asset quality. At the same time, Greek banks remain among the most interest-rate sensitive in Europe, a fact that supports their net interest income and profitability.
Despite the strong performance of bank stocks in recent years, Morgan Stanley believes that valuations remain attractive. As it points out, Greek banks are trading at a roughly 10% discount in terms of P/E ratio relative to the European banking sector for 2028, while offering higher growth in tangible book value and dividends, as well as returns on equity (RoTE) between 14% and 19%.
It ranks Alpha Bank, Eurobank, and Piraeus Bank among its top picks. For Alpha Bank, it sets a target price of €4.90, believing that the market has not fully priced in the prospects from increased commissions, recent acquisitions, and the potential for further corporate moves. According to the firm, the stock is trading at particularly attractive levels relative to its expected profitability.
For Eurobank, also with a target price of €4.90, Morgan Stanley highlights its diversified business base and exposure to rapidly growing markets such as Greece, Bulgaria, and Cyprus. At the same time, the acquisition of the insurance company Eurolife has significantly strengthened the diversification of its revenue sources.
The outlook is also positive for Piraeus Bank, for which it sets a target price of 11.3 euros. The firm characterizes the bank as the “safest” bet in the Greek economy, forecasting higher commission income relative to market estimates, thanks to growth in asset management, lending, and real estate income.
In contrast, Morgan Stanley maintains a neutral stance (Equal-weight) on National Bank of Greece, despite a target price of €17.20, which implies an upside potential of approximately 16%. As it notes, National Bank is the most conservative and defensive choice in the sector; however, it prefers banks with higher operating leverage and greater sensitivity to economic growth.
It remains neutral on CrediaBank as well, with a target of €1.16, estimating that the market has already priced in its strong growth prospects.
Finally, Morgan Stanley estimates that additional support for Greek bank stocks could come from the Greek market’s upgrade to developed status by the STOXX and FTSE indices in September 2026 and by the MSCI in 2027, a development expected to increase international institutional investors’ interest in Greek assets.