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

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…

1/ Eurobank: OWN IT based on 0.9x P/TE and 7.4x P/E 2016E pro-forma for E3bn capital increase; 2/ Earnings: bridging 2013 to 2016; 3/ Price Target sensitivities based on different RoTE/CoE; 4/ Asset quality update – 2013; 5/ Warrants: fair value estimates; biggest catalyst: asset quality; on a like-for-like basis we favor Eurobank given the valuation gap with peers; Need normalized RoTE >15% for Alpha and Piraeus and >20% for National for risk/reward to pay off, in our view…to access this report  contact@researchgreece.com

With this research note we attempt to address the following issues surrounding the sector: a) what is the market discounting at current levels? b) Impact from the DTA forbearance, c) changes in the recap framework, d) a closer look at Eurobank’s capital increase and d) an update on warrants’ pricing and valuation..to access this report  contact@researchgreece.com

PPP improved qoq on lower funding costs and cost cutting. NPL formation down 10bps on a like-for-like basis with the NPL ratio at 35.2% (35.5% in Greece). EBA CT1 at 13.5%. Merger integration at full speed. We re-balance our 2013-14E estimates and still account for normalized RoTE of 13% in 2016E. On our estimates Piraeus has a E4.6bn capital buffer above the 9% min CT1 ratio, enough to withstand a 48% NPL ratio (coverage at 50%). We raise our PT to E1.53 (from E1.38) but with the shares trading on a 1.1x P/TE 2014E we reiterate our DOI rating… to access this report contact@researchgreece.com