Now that all Greek banks have -finally- published their full IFRS notes (Eurobank being the last), we analyze the most interesting points out of 2022 performance: Balance sheet structure, NII breakdown, RoTE differences, Securities HtM & unrealized losses, Stage 1-3 movements & coverage, and P&L reporting peculiarities. Some things we find annoying. You can see these highlighted in blue.
In the spreadsheet attached, you can see our Sector Map (with Q4/FY 2022 P&L, Asset Quality, Capital, and Balance sheet items, side-by-side for all 4 systemic banks); Balance sheet structure 2012-2022; Forecast earnings 2023-2025; Multiples; MREL; NII B/D; Stage 1-3; IRBB.

What’s new? With this note, we are making a case in favor of Greek banks, considering recent banking developments in the US and Europe, namely the collapse of SVB and Signature Bank, the rescue of First Republic Bank, and the acquisition of Credit Suisse by UBS, including the wipe out of AT1 holders. We reiterate our OWN IT ratings on NBG, Eurobank and Piraeus Bank.
We should also flag Bank of Cyprus, which can now boast about its huge cash balance of 30% to total assets (earning 3% yield @ ECB’s DFR) and low unrealized losses in its HtM securities portfolio.

What’s new? Eurobank published Q4/FY 2022 results (no IFRS notes) beating our NII and PPP estimates on favorable interest rate pass through (loans, not deposits); but weirdly enough coming in line with our net income estimate and 12.7% annualized RoTE, on much higher taxes.
Management raised its RoTE guidance to 13% in 2023 and 12% in 2025, on NIM expansion (higher interest rates), and with the help of soon-to-be-equity-consolidated Hellenic Bank (29% stake) contributing c.0.5ppt. Management’s base rate assumption for ECB depo rate at 2.5% flat by 2025 seem conservative. At least before the SVB collapse came into the picture. The 2025 RoTE drop is attributed to piling MREL costs and the full effect of higher time-deposit rates.

What’s new? Eurobank announced it bought an additional 13.4% stake in Hellenic Bank for E70m, or 0.48x TBV 2022E, doubling its stake in the 2nd largest CY bank to 26%. The acquisition reflects HB’s current market cap of E528m. The stake was bought from Wargaming, which keeps a stake of 6.8%. Eurobank becomes HB’s biggest owner, above Demetra (21%) and Pimco (17%)…

What’s new? As more and more Investors are asking about the work done so far by loan servicers on Greek NPEs, managed either on behalf of the banks or on behalf of third parties, we are compiling all available performance data in this note. The numbers available are not always straightforward or sequentially comparable. The primary source is Bank of Greece.
Although the bulk of NPEs do not belong to banks anymore, the issue remains important because a) banks have kept senior notes from NPEs securitized on their balance sheets; b) the sovereign and its debt are on the hook for those senior notes because they are guaranteed by the state under the ‘Hercules’ scheme; c) cured NPEs could find their way back to banks’ balance sheets (if regulators/authorities approve) and from there to cash NII.
Market Snapshot & Conclusions. Our main findings are outlined below…