In this F4T note we look at the historical cash flow statements of the 4 systemic banks. Specifically, the period between 2016 – 2024, i.e. right after the 2015 capital controls. Our goal is to explain the different cash amounts on the balance sheet over TLTRO funding…

With this note we are updating our estimates, target prices and ratings for Greek banks, following Q2 results. We are also sharing our Sector Map, in which we have compiled the main Q2 numbers. We outline the main points below.
In short, Q2 was a good set of results for the sector, supported by the higher-than-expected base rates, favorable deposit economics (mix, beta), low CoR and volume growth (finally). The slightly lower NII (-1.5% qoq) was offset by higher fees (+12% qoq) and lower CoR (-12bps at 59bps; impairments -16% qoq) => sending clean net income +3.5% qoq at E1.17bn and RoTE at 16% (flat qoq, post AT1). Net loans went up by +2.5bn or +1.7% qoq.

In the following paragraphs we are trying to answer the following questions:
1) What is the valuation of Greek banks based on their own 2024-2026 guidance?
2) What are the key inputs/buffers?
3) What is the sensitivity to different CoE estimates?
4) What is the sensitivity to higher RoTE 2024?
5) Where do we differ and why?

As if you have not received enough banking quarterly updates by now, we are sharing our own Sector Map, in which we have compiled the main Q1 numbers as reported by banks (adjusted by ourselves), side-by-side to make it super easy to compare and spot the differences. You will need to click on the excel file attached.
We outline the ones we think are the most notable in the bullets below. It would be great to compare notes, so please feel free to send over any points or questions you may have!

NBG reported Q1 24 RoTE @ 18%, which implies it has great chances of revising its FY 2024 guidance for RoTE @ 15%. The drivers being lower deposit costs (time depo mix), higher base rates and lower CoR.
Management admitted their 2024 targets look conservative. We cannot judge the same about the dividend to be paid out 2023 (or 2024) earnings. Management was reluctant to provide a clear update, given it targets a higher payout than its peers.