Eurobank and Alpha Bank lead Axia’s banking picks
Greek and Cypriot bank shares are expected to continue outperforming, with investment firm Axia-Alpha Finance raising its target prices and maintaining buy recommendations, while identifying Eurobank and the Bank of Cyprus as its preferred investment choices. In its latest report, whose findings were shared by Greek business outlet Insider, the…
GreekandCypriot bank sharesare expected tocontinue outperforming, with investment firmAxia-Alpha Financeraising its target prices and maintaining buy recommendations, while identifyingEurobankand theBank of Cyprusas its preferred investment choices. In its latest report, whose findings were shared by Greek business outletInsider, the investment firm said thepositive investment story for Greek and Cypriot banks remains intact, supported by improving fundamentals, resilient profitability and favourable macroeconomic conditions. According to the analysis,bank shares have gained 24. 7 per cent since the beginning of the year, comfortably outperforming theEuro Stoxx Banks Index, which has risen by12. 9 per centover the same period. Axia attributed this performance tohigh and sustainable profitability, strong capital ratios, ample liquidity and increasing shareholder distributions. The firm identifiedEurobank as its top pick, citing the group’s geographical diversification and broad international footprint. It also singled out theBank of Cyprusas one of its preferred investments because of its combination ofstrong profitability and generous shareholder distributions. Axia increased itstarget price for Eurobank to €5. 30 from €4. 50. The investment firm also raised itstarget price for the Bank of Cyprus to €11. 60 from €10. 90. In addition, it lifted itstarget price for the National Bank of Greece to €17. 50 from €14. 50, describing it as particularly attractive for investors seeking dividend income. The target price forPiraeus Bankwas also increased to€10. 60 from €8. 50, with Axia saying the lender offers greater exposure to the growth prospects of the Greek economy. The report said thebanking sector’s outlook remains positive, as both macroeconomic conditions and institution-specific developments are expected to strengthen core revenues. According to the analysis, changes inmonetary policyshould supportnet interest margins, while allowing credit expansion to continue. At the same time,recent acquisitionsare expected to accelerate growth in fee and commission income. Against this backdrop, Axia believesbank management teams are likely to revise upwards their 2026 financial targets, potentially leading to higher profitability and larger distributions to shareholders. The firm has also revised its own forecasts upwards for the2026 to 2028 period, incorporating the latest business trends and an expectation oftwo interest rate increases during 2026, which it expects to be reversed in 2027. Its forecasts forpre-provision profitshave been increased by2. 6 per cent, while projectednet profitshave been raised by2. 9 per cent. Axia now expects the sector’saverage return on tangible equity (RoTE)to reach16. 0 per cent in 2026,16. 1 per cent in 2027and16. 4 per cent in 2028. Despite the strong rally in banking shares, the report argued thatvaluations remain attractive. The sector is currently trading at around1. 45 times tangible book value (P/TBV)and9. 4 times estimated 2027 earnings, according to the analysis. Axia also highlighted theexpected reclassification of the Greek stock market as a developed market in September 2026byS&P, Stoxx and FTSEas an additional potential catalyst. The report said the upgrade could attract increased capital inflows into Greek equities. However, the investment firm also warned that, given the substantial gains already recorded and the prospect of heightened market volatility,investors should consider building their positions graduallyrather than making large allocations at once.