Greek and Cypriot banks remain among the most attractive investment opportunities in Europe, Deutsche Bank said, citing strong loan growth, resilient net interest income and stable asset quality.
In a research note, the German lender said banks in both countries have benefited from decades of underinvestment, resulting in high profitability in corporate lending, rising fee income and disciplined cost management. Despite a sharp rally in their share prices, valuations remain relatively low compared with European peers, leaving room for further positive re-ratings, it added.
Deutsche Bank said the potential upgrade of Greece to Developed Market status by MSCI could draw a broader pool of international investors, boosting liquidity and potentially triggering significant capital inflows.
Cyprus, meanwhile, continues to post solid performance supported by a healthy economy and strong business activity. The country’s banks display distinct characteristics that complement the Greek banking sector, without diminishing their investment appeal, the report said.
At the individual bank level, the German bank favours Eurobank, citing its balance between high asset quality and strong earnings momentum. Piraeus Bank and Alpha Bank follow, supported by robust loan growth and positive prospects for net interest income and fee generation.
National Bank of Greece offers stability and capital return potential, while Bank of Cyprus, despite lower liquidity, stands out for its high returns and improved efficiency, the report said.
Overall, the German Bank expects positive balance-sheet trends, mergers and investment activity to underpin sustainable double-digit profit growth across the sector in the coming years.
Source: tovima.com
