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).

What’s new? BoC reported a super strong set of Q2 results, driven by the wide(r) loan-deposit rate asymmetry boosting NII +21% qoq/+164% yoy, with clean RoTE at 25% (from 21% in Q1). Despite the stronger run rate, management maintained June Investor Day guidance for >17% RoTE 2023 (and >14% 2024, >13% 2025).
Conclusion. We raise our 2023 RoTE estimate to 19.6% (18.3% adjusted for AT1 costs) and reiterate our OWN IT (OI) rating with our PT at E5.9 (from E5.7). Unless earnings are hit by a windfall tax, we expect the 30% minimum payout guidance to equal a 9% dividend yield next year. And rise closer to 10% by 2025 assuming mid-payout guidance of 40%. In which case, we agree with management that shareholders will be pocketing c.30% of BoC’s market cap in the form of total dividends during 2023-2025.

What’s new? Q2 2023 sales/EBITDA/net income came in E10.8m/E4.3/E3.2/ or +16%/+23%/+54% yoy, on ADV (already known) of E109m (+22% yoy). Trading velocity went down qoq at 32% (from 39% in Q1), despite the avg market cap rising by E8bn/+12% qoq (c.35% against mkt cap), partially attributed to the fewer trading in the quarter (59 from 63).
The most notable point comes from the cost side, with payroll rising by +23% yoy or +11% qoq, now at 56% of the total cost line (52% in H1 last year). The reason is +21 NoE /+9% more employees compared to last year and a part of the 2023 bonus included as a provision.

What’s new? Piraeus announced very strong Q2 numbers, driven (once again) by higher interest rates (NIM +15bps qoq), specifically the higher pass-through on loans (75%) combined with a lower pass through on deposits (18%). With the latter reflecting the -still- low weight of term deposits (23% from 18% in Q4 2022) despite the 1.0%-1.5% offered since Q1.
Management raised 2023 RoTE guidance to 14% (from 12% three months ago and 10% six months ago) on a combination of stronger NII and fees, plus lower CoR; The 12% RoTE guidance for 2025 was left unchanged, while interim guidance was introduced for 2024 at 14%.

What’s new? ADMIE Holdings shares are re-rating (+41% YTD vs +44% for the Athens Index) on higher WACC/RoRAB expectations for IPTO, its 51% sole investment. And rightly so. If the regulator increases IPTO’s 2023-2025 RoRAB (WACC) by +100bps to 7.1%, ADMIE Holdings dividend yield rises to 6.6%. But not sooner than 2025, when total RAB rises to a meaningful E3.2bn (from E2.0bn in 2022). And assuming the PMI additional return remains unchanged at +1.0%.
In this note, we are addressing the following dividend-yield-buffer questions: a) how likely is RAE will approve a higher WACC for IPTO? b) if so, what about RAB evolution? c) what is the impact on the fair value of ADMIE Holdings? d) what should investors do with the stock?