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P&K forecasts for bank profits

22/07/2008 14:28
In its latest report under the title “Q2 results to paint a mixed picture”, the Greek National Securities – P&K expects that banks’ net profits will drop 8.5%. However, “should we exclude banks whose Q2’07 results were significantly boosted by trading gains, namely Hellenic Postbank and ATE bank and Emporiki Bank’s ongoing restructuring and focus on the larger banks, net profit growth on average should be just over 9%”.

According to the report, “we expect Q2’08 results to show good volume growth, but the main themes of Q1’08 to continue to prevail”.

P&K expects that Bank of Cyprus will achieve Q2 profits of €131 million, recording an annual increase of 6%, while Marfin’s profits will reach €117 million (+14%). BOCY’s net income from interests are expected to reach €195 million (+2%) and MPB’s €180 million (+6%).

“Our position remains expecting continued volatility in our universe’s performance, favouring specifically Bank of Cyprus, as it appears to have a higher quality portfolio that is better provisioned in addition to the resiliency to the stress testing performed in our previous report. Moreover, the recent acquisition of Uniastrum Bank in Russia is expected to create a third pillar of development for the Group”, the report noted.

BOCY TP is €11.1 and MPB’s €7.6 with an Overweight recommendation for both.

As for the condition in Greece, “although, credit continued to expand in Greece at an overall rate of over 20%, a couple of key trends could be identified. Household lending growth has begun its anticipated deceleration as it pertains to consumer loans and more evident in mortgage loans”, it concluded.