16/02/2010 13:43
In its report dated February 16, 2010, JP Morgan increased the TP of Bank of Cyprus and downgraded that of six Greek banks.
The TP of BOCY is upgraded to €6.80 from €5 and an overweight recommendation.
On the contrary, the TP of National Bank is cut to €25 from €36 (overweight), of Alpha Bank to €10 from €20 (overweight), of Eurobank to €7.60 from €16 (overweight), of Piraeus Bank to €7.30 from €17, of ATE Bank to €1 from €1.20 (underweight) and of Postal to €3.5 from €4 (underweight). The recommendation of Piraeus Bank is downgraded from overweight to neutral.
The top picks of JP Morgan are BOCY and NBG, “both likely to recover ahead of peers supported by strong liquidity, international growth (NBG c. 50% of earnings from Turkey/SEE; BOC Russia, CIS), robust capital position (avg 11E Tier 1 at 13.1%), high profitability and dividend prospects”.
“Incorporating 1-2yr Greek recession scenario, coupled with gradual SEE recovery, we revise our 09E EPS estimates by -7%, 10E EPS by -59% and 11E EPS by -56%. Our estimate changes are driven by i) Lower volumes (10E Greek loan growth -2 % to 2%); ii) elevated cost of risk (10E avg cost of risk 130bps); iii) NIM pressures (10E NIM revised 40-60bps), assuming spreads remain at elevated levels; iv) lower trading revenues and Q4-1H’10 MTM impact (widening of GGB spreads), the report stressed.
The TP of BOCY is upgraded to €6.80 from €5 and an overweight recommendation.
On the contrary, the TP of National Bank is cut to €25 from €36 (overweight), of Alpha Bank to €10 from €20 (overweight), of Eurobank to €7.60 from €16 (overweight), of Piraeus Bank to €7.30 from €17, of ATE Bank to €1 from €1.20 (underweight) and of Postal to €3.5 from €4 (underweight). The recommendation of Piraeus Bank is downgraded from overweight to neutral. The top picks of JP Morgan are BOCY and NBG, “both likely to recover ahead of peers supported by strong liquidity, international growth (NBG c. 50% of earnings from Turkey/SEE; BOC Russia, CIS), robust capital position (avg 11E Tier 1 at 13.1%), high profitability and dividend prospects”.
“Incorporating 1-2yr Greek recession scenario, coupled with gradual SEE recovery, we revise our 09E EPS estimates by -7%, 10E EPS by -59% and 11E EPS by -56%. Our estimate changes are driven by i) Lower volumes (10E Greek loan growth -2 % to 2%); ii) elevated cost of risk (10E avg cost of risk 130bps); iii) NIM pressures (10E NIM revised 40-60bps), assuming spreads remain at elevated levels; iv) lower trading revenues and Q4-1H’10 MTM impact (widening of GGB spreads), the report stressed.
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