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HSBC Adjusts Target Prices For Greek Banks, Highlights Rising Dividends As Key Attraction

by THEFUTURE.TEAM

January 27, 2025

HSBC has revised its target prices for Greek banks, with an emphasis on increasing dividends as the main factor attracting investors, even as profitability momentum slows.

For Alpha Bank, the target price is set at €3.05, up from €3, with a “buy” recommendation and a potential upside of 75.3%. Eurobank’s target remains unchanged at €3.50, also with a “buy” rating and a 44% upside potential. National Bank’s target has increased to €9.90, up from €9, with a “hold” recommendation and a 16.2% upside margin, while Piraeus Bank’s target is raised to €7.25 from €6, with a “buy” rating and a 63.7% upside potential.

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HSBC notes that the sector’s main appeal lies in the anticipated rise in dividends, with a forecasted 27% increase in dividends per share by 2026, leading to dividend yields of 7-10%. The outlook is supported by strong nine-month 2024 results, improving capital strength, better credit ratings, and the limited impact of faster DTC amortization, which positions all banks to achieve a payout ratio of 50% by 2026.

Despite profitability declines due to lower interest rates, higher payouts will likely drive further stock appreciation, with HSBC indicating that lower book valuations and high dividend yields leave room for gains. The profitability of Greek systemic banks is expected to decline by 9% in 2025, but this follows a strong base. However, HSBC has revised its 2024/25/26 profit forecasts upwards by 16/14/20% on average, reflecting factors like robust credit expansion in Greece, asset management momentum, and a reduction in the cost of risk.

HSBC has downgraded National Bank to a “hold” from a “buy” due to limited downward adjustment potential in its funding costs, which may result in weaker net interest income (NII) prospects over the next two years. Conversely, Piraeus Bank stands out with a 10% dividend yield for 2026, one of the highest in CEEMEA. Eurobank is favored for its successful capital allocation and attractive valuation, while Alpha Bank is seen as the most accessible exposure to Greek banks, with a positive earnings outlook and a compressed valuation.

While Greek banks are appealing, HSBC also highlights alternatives with better combinations of earnings growth and dividend yield, including PKO, Moneta, and Isbank, particularly due to factors such as reduced mortgage loan provisions and favorable shifts in interest rates.

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Call for Reform: Cyprus Faces New Challenges with Emerging Tobacco Products

by News Editor

May 31, 2025

In the face of a burgeoning variety of tobacco products, existing smoking laws in Cyprus are struggling to keep pace, as highlighted by Christos Minas, the president of the Cyprus National Addictions Authority (AAEK). On World No-Tobacco Day, there was a push for legislative reforms to comprehensively cover all tobacco forms, including non-nicotine alternatives.

Addressing Rising Trends with Effective Policies

Minas emphasized the surge in popularity of e-cigarettes and flavored products, particularly among the youth. The proposed legal updates aim to enhance enforcement efficiency against these emerging trends.

In collaboration with the World Health Organization’s (WHO) framework, the AAEK has established the first set of national guidelines for smoking cessation in Cyprus, crafting prevention and treatment strategies based on robust scientific evidence.

Educating Youth and Public Awareness Initiatives

Efforts are underway to raise awareness, with informative materials distributed to secondary schools across Cyprus. A public event in Nicosia highlighted the state’s ongoing commitment, providing carbon monoxide testing and expert advice on new tobacco products.

Recent data from the Cyprus general population survey 2023 indicates that 38% of smokers have used e-cigarettes recently, and the smoking initiation age remains at 18.

A Glimpse into Youth Smoking Patterns

According to the latest European school survey, 14% of Cypriot students aged 15-16 reported smoking traditional cigarettes last month. Although this rate is declining, Cyprus still ranks high in Europe for e-cigarette and hookah use among students.

The concern is global, with WHO reports showing over 37 million children aged 13-15 engage in tobacco use, driven by aggressive marketing in loosely regulated environments.

The urgency for reform is clear: before these trends solidify, proactive measures are necessary to protect future generations from potentially hazardous habits.