Goldman Sachs said that Greek banks mergers is positive news and stated that despite no improvement in their operational environment, Greek banks have by far been the best ytd performers among European banks.
While share prices have moved up, Goldman Sachs doesn’t see any improvements in the banks’ operational environment, as domestic austerity measurements continue to weigh on asset quality and deposit volumes.
Given the banks’ strong reliance on ECB funding, it also expects them to focus increasingly on reducing liquidity demands by shrinking loan portfolios.
Goldman expects this adverse impact to be partially offset by lower trading losses, due to stabilizing sovereign spreads as well as most sovereign bonds now being booked as held-to-maturity.
Its estimate changes drive only limited price target changes, particularly as it expects the shares to continue to trade at premiums driven by recent M&A speculation.
Goldman Sachs expects Alpha Bank’s revenue to have dropped 2% in 4Q2010, as it expects its strong balance sheet deleveraging efforts to have adversely affected net interest income in the quarter, with this being partially offset by recovering trading income. It sets a target-price of €4.7 from €4.5 and a “neutral” rating on Alpha.
While Goldman Sachs believes NBG’s revenue will remain low in absolute terms given the operational headwinds in Greece, it expects some improvements quarter on quarter from lower trading losses. National Bank is also on “neutral” rating, with a target-price unchanged at €7.2.
Piraeus Bank’s revenues are expected to remain low in absolute terms given the operational headwinds in Greece, but Goldman believes some improvements will be evident quarter on quarter, driven by recovering trading losses. It set a “sell” rating on Piraeus and a target-price at €1.5.
While share prices have moved up, Goldman Sachs doesn’t see any improvements in the banks’ operational environment, as domestic austerity measurements continue to weigh on asset quality and deposit volumes.
Given the banks’ strong reliance on ECB funding, it also expects them to focus increasingly on reducing liquidity demands by shrinking loan portfolios.
Goldman expects this adverse impact to be partially offset by lower trading losses, due to stabilizing sovereign spreads as well as most sovereign bonds now being booked as held-to-maturity.
Its estimate changes drive only limited price target changes, particularly as it expects the shares to continue to trade at premiums driven by recent M&A speculation.
Goldman Sachs expects Alpha Bank’s revenue to have dropped 2% in 4Q2010, as it expects its strong balance sheet deleveraging efforts to have adversely affected net interest income in the quarter, with this being partially offset by recovering trading income. It sets a target-price of €4.7 from €4.5 and a “neutral” rating on Alpha.
While Goldman Sachs believes NBG’s revenue will remain low in absolute terms given the operational headwinds in Greece, it expects some improvements quarter on quarter from lower trading losses. National Bank is also on “neutral” rating, with a target-price unchanged at €7.2.
Piraeus Bank’s revenues are expected to remain low in absolute terms given the operational headwinds in Greece, but Goldman believes some improvements will be evident quarter on quarter, driven by recovering trading losses. It set a “sell” rating on Piraeus and a target-price at €1.5.
