With this note we update our views on Greek equities…

With fundamentals poised to be weak for a long time, all investors can look forward to is lower country risk and/or re-rating catalysts. The latest Eurogroup (see previous notes) did not provide any, in our view; report includes Q&A, detailed asset quality and revised forecasts 2017-2018; spreadsheet includes sector maps FY 2016/Q1 2017 – available upon request.

Much like negotiations with creditors over the second review, the outlook on Greek Banks has not changed. Sector trades at 30% of TBV 2017E. Reducing the stock of NPEs is a major challenge. We reiterate our DOI ratings; we have constructed…

The basic scenario endorsed by BoG/Banks/SSM is -40%/E42bn lower NPEs by 2019, dominated by re-performing initiatives (80-85%). Our exercise shows this would be totally manageable by GR banks capital-wise. Still, we doubt quarterly NPE targets will be met…

In this RG F4T we focus on Interest Income from Impaired loans (III); in 2015, 37% of NII and 71% of recurring PPP consists of interest from impaired loans, on our estimates (4 systemic banks);  excluding RG estimated 2010-2015 accumulated III from TBV …