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Credit Suisse: Greek Banks are still expensive

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Credit Suisse still thinks that Greek Banks are expensive, as In June the back book rates show a large drop. Year to date the drop in loan rates is smaller than the drop in deposit rates.

Credit Suisse finds few investors focused on the pressure on loan rates and thinkw this development can be incrementally negative for the investment case.

On a relative basis CS continues to prefer NBG (Outperform, Target Price €3.6) over Alpha Bank (Neutral, Target Price €0.8) or Piraeus Bank (Underperform, Target Price €1.4) due to its smaller corporate loan book leaving it less exposed to tightening in corporate loan spreads. As Piraeus Bank is concerned, Credit Suisse believes that the bank is more exposed to lower rates via its larger proportion of loan restructuring.

The Greek banks trade on 0.9-1.2x 15E TBV for a 16E RoTE of 8-14% (NBG the only Greek bank that we forecast to be able to cover its CoE by 2017E).

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