Piraeus Bank remains one of UBS’s six top picks, with the investment bank maintaining its price target of €6.70 per share. UBS forecasts that European banks will be re-rated to a price-to-earnings multiple of 10x over the next 12 to 18 months, up from the current 8.8x, narrowing the P/E discount to the broader market to its historical average of 25%. The outlook implies a total return potential of around 20%.

However, UBS cautions that in the short term, the sector appears vulnerable to risk-off sentiment if broader geopolitical or financial issues emerge. The investment bank notes that this year’s rally, which accounts for 93% of the expected re-rating (with banks up 28% year-to-date against average EPS revisions of just +2%), and the upcoming Q2 earnings season – where only modest upward EPS revisions are expected, as in Q1 – could leave the sector exposed to profit-taking.

Over a 12-month horizon, UBS expects the market to price in an attractive mix of yield (5.6% estimated for 2026), share buybacks (3.1% estimated for 2026), and EPS growth of 3%, 7%, and 10% for 2025, 2026, and 2027, respectively. This growth is supported by improving loan and deposit dynamics.

In the short term, UBS recommends a top-picks portfolio that is well-balanced across key parameters such as capital markets exposure, duration, and high vs low return on tangible equity (ROTE).

Following a strong recent performance, UBS has removed Banco Santander from its top picks, replacing it with Standard Chartered. UBS argues that StanChart offers long-term growth at a non-growth multiple and greater near-term capital upside potential.