HSBC raised its price targets on shares of Greece’s four largest lenders after they posted strong performances in the first half; saying Eurobank (EURBr. AT) and Piraeus Bank (BOPr. AT) were its top picks.
“Greek banks surprised us with stronger loan growth, faster repricing of securities books; and robust fee income in the second quarter,” HSBC said in a research report.
Greek bank shares, down 25% in the past three months despite a strong improvement in operating performance, remain unappreciated due to European Union-wide recession fears, it said.
“From a valuation point of view, we think the most promising Q2 results came from Piraeus,” HSBC said.
Piraeus Bank’s strong core pre-provision income growth and good capital generation render its price-to-tangible book value ratio of 0.24 “extremely attractive”, the lowest among its EU peers, while the bank’s balance sheet cleanup is mostly done, it said.