We are updating our estimates for Piraeus ahead of the announcement of its third-quarter results on 30 October, Goldman Sachs writes in a research note. We expect a significant quarter-on-quarter increase in net interest income (NII), driven by higher Euribor rates and business-volume growth (our estimates put NII 3% above consensus), as well as a sequential improvement in the CET1 ratio and strong profitability (ROTE of 15%). We highlight the following key trends for the quarter:
Net interest income and fees
We forecast an increase in NII of around 7% quarter on quarter, supported by growth in lending volumes, higher three-month Euribor (which has risen sequentially and currently stands at around 2.6%, compared with about 2.0% at the start of 2026, as the repricing of the loan portfolio is taking place rapidly, albeit with a short lag) and one extra day in the quarter compared with the previous one.
We estimate total NII of €2.09bn for the year, the analysts write, slightly above guidance of €2.0bn, given the favourable interest-rate environment and business volumes (corporate lending in Greece was growing at an annual rate of more than 9% in August) and higher average ECB interest rates, which offset the ongoing compression of corporate loan margins.
Our estimates for fee income, at around €880m for 2026, are also above the annual target of about €850m, as we forecast strong performance across all fee-generating business areas.
Operating expenses and cost of risk
We estimate that quarterly operating expenses will be broadly in line with VA consensus, with the cost-to-income ratio at the low end of the 30% range. We include an expected €25m contribution to the “Marietta Giannakou” programme to renovate school buildings in the third quarter, while we estimate that the underlying cost of risk will be broadly in line with guidance (our estimates put the underlying cost of risk (COR) at 56 basis points for 2026, before it improves to around 40 basis points by 2028).
Capital and distributions
We forecast the announcement of an interim dividend of around €120m in the third quarter, payable in the fourth quarter (note: last year, the interim distribution was made through a share buyback of around €100m).
We expect the CET1 capital ratio to reach 13.0% in the third quarter and 13.1% at year-end, up from 12.8% at the end of the second quarter of 2026, as sustainable net profitability is partly offset by the accounting assumption of a 57% payout ratio (alongside the accelerated amortisation of deferred tax credits — DTCs) and organic growth in risk-weighted assets (RWA) resulting from credit expansion.
We are raising our price target to €12, from €11.75 previously, following changes to our estimates, the analysts conclude. We value Piraeus using a price-to-earnings (P/E) multiple of 10.25x, with equal weighting (50% each) of our 2027 and 2028 EPS estimates. Our rating is “Buy”.