“We reiterate our positive stance on the four systemic banks in Greece and Bank of Cyprus in this report,” analysts at Ambrosia Capital write in their analysis of the sector.
These banks’ shares have outperformed most European banks since the start of the year, thanks to stronger loan growth and higher fee income.
This has been supported by timely bolt-on acquisitions, which boost fee income, as well as the continued exploitation of low penetration rates in asset management and bancassurance.
We believe the pressure on the shares in recent weeks has been driven mainly by increased volatility in global interest rates, linked to expectations for AI-related growth — both the positive and negative scenarios —, rising geopolitical risks in the region, and increased risks associated with European sovereign bonds, centred on France.
In our view, upcoming elections in several European countries, including Spain, Italy, France and Greece, are also attracting greater investor attention, weighing on sentiment. Setting aside concerns about global and European growth, which would probably put downward pressure on ECB interest rates and, in turn, affect Greek banks and Bank of Cyprus relatively more because of their business models, we believe the fundamentals of these banks remain strong — a view we expect to be confirmed again by strong Q3 2026 results.
We maintain Buy ratings on all five banks
While we maintain our positive stance on all five banks, we believe Eurobank stands out thanks to its diversified business model, the pending completion of its acquisition of Eurolife’s life insurance business and the potential for its valuation to rise.
Our revised 12-month price target of EUR 5.85 implies 34% upside (excluding a 3.7% dividend yield). Greek banks and Bank of Cyprus trade at an aggregate 1.4x our 2027 P/TBV estimates, with a RoTE of 17.0% for 2028, compared with market estimates for Italian banks of 1.5x and 15.3%, and for Spanish banks of 1.7x and 18.8%. In this report, we update our model and price targets.
Alpha: Our 12-month price target is EUR 5.35 per share (up from EUR 3.90 previously), implying 23% upside (excluding a 3.1% dividend yield).
It is based on a target P/TBV multiple of 1.28x (up from 1.05x previously), with key inputs including a return on equity of 15.1% after payment of the AT1 coupon (adjusted for excess capital; 14.0% unadjusted, versus 14.3%/12.6% previously), a cost of equity of 11.9% (down from 13.7% previously) and a growth rate of 0%.
Eurobank: Our 12-month price target is EUR 5.85 per share (up from EUR 3.60 previously), implying 34% upside (excluding a 3.7% dividend yield).
It is based on a target P/TBV multiple of 1.86x (up from 1.28x previously), with key inputs including a return on equity of 20.3% (adjusted for excess capital; 18.4% unadjusted, versus 17.4%/15.8% previously), a cost of equity of 11.0% (down from 13.6% previously) and a growth rate of 0%.
National Bank of Greece: Our 12-month price target is EUR 20.00 per share (up from EUR 13.10 previously), implying 28% upside (excluding a 4.1% dividend yield).
It is based on a target P/TBV multiple of 1.82x (up from 1.39x previously), with key inputs including a return on equity of 20.0% (adjusted for excess capital; 17.5% unadjusted, versus 17.5%/15.0% previously), a cost of equity of 11.0% (down from 12.6% previously) and a growth rate of 0%.
Piraeus: Our 12-month price target is EUR 11.05 per share (up from EUR 7.35 previously), implying 13% upside (excluding a 5.6% dividend yield).
It is based on a target P/TBV multiple of 1.53x (up from 1.11x previously), with key inputs including a return on equity of 18.2% after payment of the AT1 coupon (adjusted for excess capital; 17.1% unadjusted, versus 15.2%/14.4% previously), a cost of equity of 11.9% (down from 13.7% previously) and a growth rate of 0%.
BANK OF CYPRUS: Our 12-month price target is EUR 12.65 per share (up from EUR 8.20 previously), implying 22% upside (excluding a 9.4% dividend yield).
It is based on a target P/TBV multiple of 1.94x (up from 1.47x previously), with key inputs including a return on equity of 23.1% after payment of the AT1 coupon (adjusted for excess capital; 18.2% unadjusted, versus 20.0%/14.8% previously), a cost of equity of 11.9% (down from 13.6% previously) and a growth rate of 0%.