UBS issues buy recommendations for Greece’s four major banks

Athens, Greece. UBS has issued buy recommendations for all four major Greek banking groups, identifying further potential gains in their share valuations as the country’s economic recovery continues.

The investment house highlighted Eurobank and Alpha Bank, citing investor interest in their wider regional operations, including their presence in Cyprus.

Valuations and capital deployment

UBS said Greek banks remain among the strongest performers in the European banking sector and continue to trade at a clear discount to comparable European lenders, despite recovering from lows reached during the crisis in the Middle East.

The report said more effective capital deployment could create further value for shareholders. UBS identified a combination of smaller strategic acquisitions and increased cash distributions as a key catalyst for stronger returns.

Lending and income outlook

The investment house said the sector’s underlying financial performance remained strong.

Performing corporate lending is forecast to grow by around 8 per cent annually between 2025 and 2028, while net interest margins are expected to have reached their lowest point.

UBS expects net interest income to accelerate, with stronger fee income providing additional support over the medium term.

Economic outlook

The report found that non-performing exposures have largely normalised, leaving Greek banks with relatively low levels of credit risk.

UBS expects Greece’s economy to maintain GDP growth of around 2 per cent annually in the coming years, driven primarily by a sustained investment cycle supported by the European Union’s Recovery and Resilience Facility.