Banks are on track for strong profitability in the first quarter of 2024, with analysts estimating they will exceed their full-year targets.

The total profits of the four systemic banks amounted, in the first quarter of 2024, to 1.09 billion euros, compared to 788 million euros in the corresponding quarter of 2023, increased by +38.4%.

Ethniki presented a net profit of 358 million euros (+38%), Eurobank 287 million euros (+21.4%), Piraeus 233 million euros (+29.4%) and Alpha Bank 211 million euros (+89.91%).

Interest income amounted to 2.115 billion euros from 1.830 billion euros in the corresponding period last year, increased by 15.57%.

National Bank announced interest income of 606 million euros (+22%), Eurobank 571 million euros (+13.7%), Piraeus 518 million euros (+15.88%) and Alpha Bank 420 million euros. euros (+9.6%). Fee income reached €477 million, up 13.57%.

The average NPE ratio remained stable on a quarterly basis at 3.5% Eurobank at the end of the first quarter is the lowest ratio at 3% 9 from 5.1% in the first 3 months of last year), followed by Piraeus with 3.5% (from 6 .6% last year’s corresponding 3 months), National Bank with 3.7% (stable) and Alpha Bank with 7.6% (stable).

Systemic banks have announced their intention to distribute dividends for 2023 for the first time since 2008 and are subject to regulatory approval in early June. Eurobank aims to distribute 0.09 euros, National 0.36 euros, Alpha 0.026 euros and Piraeus 0.06 euros.

Eurobank Equities considers that Greek banks are an interesting case and notes that despite the upward movement of bank shares they still remain at a discount of more than 20% compared to EU bank shares and are valued at 6.2 times the P/ E and 0.77 times the P/TBV ratio for this year.

Eurobank Equities maintains buy recommendations for all the banks it covers, with target prices of 2.41 euros for Alpha Bank, 10.37 euros for National Bank and 5.40 euros for Piraeus, which remains the its top pick due to its attractive risk-return profile and solid program execution.

Greek banks showed strong results in the first quarter, due to higher core income, effective cost containment and lower provisions, Optima Bank points out in its report.

In addition, return on equity increased further, liquidity is abundant, and asset quality and momentum remained positive. Following the strong set of results, Optima believes the banks will not only meet but exceed this year’s targets and therefore reiterates a buy recommendation on the sector.

The stock exchange gives a target price of 2.1 euros for Alpha Bank, 2.41 euros for Eurobank, 9.2 euros for Ethniki and 5 euros for Piraeus.

Returns – valuations

The total capitalization of the four systemic banks amounts to 24.102 billion euros (Eurobank 7.774 billion euros, National 7.601 billion euros, Piraeus 4.699 and Alpha Bank 4.027 billion euros), increased by 4.745 billion since the beginning of the year.

Since the beginning of the year, the banking index has gained 23.09% from the 2024 benchmarks, while of the four systemic bank shares, the largest increase is the share of National Bank (+32.11%), followed by Eurobank (+29 .81%), Pirios (+17.50%) and Alpha Bank (+11.24%).

According to NBG Securities, Greek bank valuations are at 6.2 times, on average, in P/E terms this year and 0.85 times in P/TBV terms. Alpha Bank’s valuation is at 5.8 times in P/E terms and 0.60 times in P/TBV terms. For Piraeus, the corresponding indices are 5.4 times and 0.69 times. Eurobank shares are trading at a P/TBV ratio of 0.93 times and a P/E ratio of 6.4 times. The share of Ethniki is traded at 7 times this year in P/E terms and 1 time in P/TBV terms.