With all IFRS reports published (finally), we present our sector map for Q4/FY 2023. Our views per bank have already been analyzed in stand-alone notes. In short: if you wish to bet on P/TBV moving towards 1.0x TBV, go with NBG. If you prefer to bet on P/TBV convergence, go with Alpha. To avoid being solely backward-looking, we present an exercise showing the single most important parameter in banks’ 2026 RoTE guidance.

Q4 Sector Map confirms NBG as our top pick. Highest NII, NIM, PPPM; RoTE; CET1; S3 covg combined with lowest NPE%, CoR; ECB funding. Additionally, it recorded the biggest increase in S1 loans qoq / decrease in S2+3 loans. The bank benefits from a low time-deposit mix at 18% (vs 24%-34% peers), therefore enjoying a lower deposit beta (10% vs 12%-15% in Q3); We estimate NBG’s RoTE excludes c. E17m (or 100bps RoTE annualized) in opex (one-offs) which does not change the comparison.

Alpha Bank published a strong set of Q2 results, with NII +4% qoq/+45% yoy, hitting 11% annualized RoTE (+20bps qoq; on our estimates), on a further widening loan-deposit spread (low deposit pass-through), intensified by higher base rates. Management raised 2023 EPS by +16% and 2023 RoTE guidance by +100bps, to >11% (both reported and AT1 adjusted on 13% CET1 terms); but left 2025 adjusted RoTE unchanged at >12% (or 10% reported).

’If you cannot explain it simply, then you do not understand it well enough.’’ Testing ourselves, we share our understanding of each Greek investment case we cover within a few lines.
Conclusions: Our base case scenario is materializing, i.e., Mitsotakis administration renewing its mandate and Greece avoiding a recession. Equities have re-rated and are +36% YTD, so now…

What’s new? Alpha Bank held its Investor Day yesterday, raising/confirming its RoTE 2023 target at c.10% (from >9%) and introducing 2025 RoTE target at >12%. EPS is projected to grow >20% p.a. in 2023-2025, with net income at an implied E590m in 2023 and E705m in 2025 (net of AT1 costs). The buffer. We find the most important buffer assumption in Alpha’s 2023-2025 business plan to be pushing depositors away from term deposits and into own asset management products (money market, mutual funds, private banking). Thus, keeping deposit costs low while generating fees. The big news, however, was management’s clear communication over potentially returning excess capital to shareholders, on top of resuming ordinary dividends (out of 2023 earnings @ 30bps RWA)…