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.

What’s new? Two years after buying its first 12.6% stake in Hellenic Bank (HB) from Third Point at 0.30x TBV 2021, Eurobank announced it has agreed to buy Pimco’s 17.3%; Senvest’s 1.6%; and Wargaming’s 7.2% stakes in the CY bank (at 0.70x TBV 2023E), raising its total participation to 55.31%. Going above 30% ownership means launching a mandatory public offer for the remaining shares.
Illustration only. In this note we look at the pro forma impact on Eurobank’s 2023-2025 numbers from fully consolidating Hellenic Bank. Our work is based on a) our current estimates for standalone Eurobank; b) 100% effective stake consolidation of HB; c) HB’s 2023 and medium term guidance (announced with Q2 2023 results); d) NO synergies between HB and Eurobank’s existing CY ops.

’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? With Alpha Bank (Jun 7) and Bank of Cyprus (Jun 8) holding their Investor Update events this week, we thought it would be useful to wrap up Q1 2023 results and touch upon the major banking trends in Greece. And what better way to do this than through a RoTE waterfall chart that shows each bank’s RoTE components in margin terms (% assets). Additionally, we summarize the most notable points out of Q1 2023 results.

What’s new? Eurobank published Q1 2023 results (no IFRS notes yet) with annualized RoTE climbing further up at 16% (+300bps qoq), as deposit beta and mix both came in below initial expectations/guidance. The loan-deposit spread keeps widening, prompting management to raise 2023 RoTE guidance to 14% from 13%. Higher than budgeted ECB rates (75bps and counting) and lower funding costs are both tailwinds. Weaker volume is a headwind.