Pre-tax loss at E233m adjusted for one-offs from E285m in Q1; NIM at 2.0% (+7bps qoq) plus other income boost sent PPP higher; +E260m DTA; NPLs at 31.8% of gross loans, +90bps qoq (Greece 33.6%, +90bps qoq) with coverage +80bps at 51.1% to reach 55% by year-end on our estimates; CET1 transitional at 17.8% offers E4.5bn buffer against ECB adverse stress test threshold; we adjusted our estimates and expect bigger losses this year driven by impairments; better numbers for 2015/2016E; PT and rating unchanged.

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 constructed a plug-and-play spreadsheet where readers can impose their own AQR assumptions on 2013 numbers and further stress 2014-2016 NPL and coverage ratios for each systemic GR bank (adverse and baseline scenario). …to access this report and spreadsheet contact ResearchGreece at contact@researchgreece.com

Greece is +13% since the elections with ADV >E280m; we conclude this is driven by re-rating rather than upgrades in earnings; only a handful of companies have scope for upgrade in earnings in our view; the ones that combine both catalysts (re-rating and EPS upside) are Jumbo (OI), Titan (OI), Eurobank (OI) and Motor Oil (OI); in our research note we compare 2016E with 2007-08 peak earnings (scope for upgrades; p. 5); we test 200bps lower discount rates (re-rating; p. 8); we highlight points from IMF’s latest review on Greece (p. 9).  …to access this report contact@researchgreece.com

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…

HFSF approved a E0.30 per share bid by a group of investors to cover 46.5% of the E2.86bn SCI. Final price will be set by the book building process (last week of April). E0.30 is a bargain for investors, implying an acquisition pro-forma P/TE 2013 of 0.77x (0.73x P/TE 2016E). The size of the SCI (1x TBV 2013) is an argument in favor of the HFSF accepting the offer. On the flip side, saying yes to E0.30 is not exactly a vote of confidence in the prospects of the Greek banking sector (or Greece in general?). Or is there something wrong with Eurobank in particular? Our research on the latter suggests otherwise and this is why we have an OI rating with an adjusted PT of E0.46 (assuming new shares at E0.30). For a price range of E0.30 to E0.40/sh shares trade on 0.73x – 0.97x P/TE 2016; 5.8x – 7.8x P/E 2016E – on our estimates…to access this report  contact@researchgreece.com