NBG Securities has increased the target prices of Greek banks, considering that the sector continues to trade at a discount compared to its European counterparts.
Specifically, the new target price for Alpha Bank is set at 2.55 euros an increase from the previous 2.50 euros, for Eurobank the target price is 3.50 euros instead of 2.85 euros, and for Piraeus Bank at 6.25 euros up from 5.30 euros.
The higher target prices reflect an updated outlook based on the latest business plans presented by bank management teams and a 30-basis-point reduction in the equity risk premium (ERP).
Piraeus Bank remains NBG Securities’ top pick, as it is viewed as unjustifiably undervalued compared to its Greek banking peers.
NBG Securities projects net interest income (NII) for Greece‘s three systemic banks at 6.05 billion euros in 2025, reflecting a 2.8% annual decline, with net interest margins (NIM) expected to narrow to 2.3%, down by 23 basis points year-on-year.
However, significant support is anticipated from higher bond income, risk-hedging activities, and rising fees, which are projected to reach 1.7 billion euros in 2025—a 5.6% annual increase—despite government initiatives aimed at reducing costs for bank customers.
As a result, total core revenues in 2025 are estimated to reach 7.76 billion euros, a 1.1% annual decline. The contribution of NII to total revenues is expected to decrease to 77% by 2026, compared to 80% in 2023.
Factoring in operational cost optimization and reduced cost of risk (CoR), NBG Securities forecasts post-tax profits of 3.16 billion euros for 2025, a 5.8% year-on-year decline.
Furthermore, as Greek banks continue to build capital and accelerate the amortization of deferred tax credits (DTCs), dividend payouts are expected to rise to approximately 50% in 2025–2026, translating to a dividend yield (DY) of 7.5%–9.8%, with an average of 8.5%.