Deutsche Bank Maintains Cautious View On Greek Banks
Deutsche Bank remains cautious on Greek banks, while it views Q1 results as a non-event, according to a report.
Greek debt case seems to be turning into a sudoku puzzle, DB says, as “European/IMF officials have been commenting on various ways to deal with the Greek public debt issue, including lending the sovereign more money to cover for its 2012-13 re-financing needs and/or proceed with a soft/hard restructuring of Greek debt”.
According to the German bank, the underlying dilemma is whether buying Greece more time will facilitate the country in taming its fiscal deficit and selling assets or whether it will just postpone the inevitable solution, which is some form of debt restructuring affecting the private sector.
DB economists think the most likely outcome will be a package comprising additional loans (EMU/IMF) with conditionality and possibly collateralized by privatization proceeds, perhaps a voluntary rollover and debt buybacks through (EFSF/ESM).
A concrete proposal is not expected to emerge before the EC meeting on June 24.
Regarding Greek banks, which will be reporting Q1 results from May 23, DB expects marginally positive bottom lines, flattish net interest income, weak fees and rising provisions. It also expects loan de-leveraging and an acceleration in Nonperforming loans formation. “Once more, the focus will be on the repercussions of the sovereign crisis on banks΄ operations and capital”, Deutsche Bank said.
It maintain a “hold” rating on Alpha Bank, Marfin Popular, Piraeus, Bank of Cyprus and “sell” recommendation on ATEbank.
Alpha Bank is expected to report net profits of €10m against losses of €10 last year, with net interest income of €430m from €465m in Q1 2010. Bank of Cyprus would report new profits of €79m from €81m in 2010 and net interest income of €275m from €242m.
Piraeus Bank is expected to record net profits of €2m from €6m in 2010, with net interest income of €305m from €293m. Marfin Popular Bank is expected to report net profits of €8m from €42m in Q1 2010, with interest net income of €175m from €176m.
Regarding ATEbank, DB expects net losses of €9m from €37m and net interest income of €200m from €198m last year.
(capital.gr)