ECB/EBA AQR and stress tests; DTA conversion into DTC can be a real game-changer adding E10bn/+42%/+430bps to CET1 capital in Q2 FL B3 terms. Short term we expect equities to trade lower on volatility caused by politics, the risk of early elections and negotiations with the Troika over public debt. Long term we expect asset…
Net income at E361m in Q2 turning to losses of E83m if we strip out the +E0.4bn DTA recognized (RGe); NII +2.0% qoq as NIM increased 9bps but lower other income and flat costs lead to flat PPP; NPL ratio at 33.6%, +30bps qoq (Greece 34.9%, +20bps) with coverage +200bps at 58%; volumes flat; CET1…
It is impossible to estimate the outcome of the ECB/EBA AQR & Stress Test exercise on Greek banks. We believe there is a good chance Greek banks will not need to raise more capital given their recent recap and restructuring plans (approved by DG Comp); the results will be announced in late October. We have…
Nothing really changed post Q1; all drivers (deposit spreads, cost cutting, NPL formation) in place; we revisited our 2013-2016 bridges making small changes to our pre-provision and bottom line forecasts. We stick to our normalized RoTE estimates and valuation assumptions; we reiterate our rating on each bank; cannot exclude a market re-rating…
1/ Eurobank: OWN IT based on 0.9x P/TE and 7.4x P/E 2016E pro-forma for E3bn capital increase; 2/ Earnings: bridging 2013 to 2016; 3/ Price Target sensitivities based on different RoTE/CoE; 4/ Asset quality update – 2013; 5/ Warrants: fair value estimates; biggest catalyst: asset quality; on a like-for-like basis we favor Eurobank given the…