Keefe Bruyette places Bank of Cyprus among top list

Keefe Bruyette is bullish on European banks suggesting an overweight bias on the back of expectations that the spreads will improve, leading profits by 10% on average higher. The investment house forecasts the 2007 p/e ratio of the banking sector at 11.4 times, with the highest growth rates in terms of profitability forecast for Greece, Austria, Spain and Germany.

Keefe Bruyette also sees more mergers & acquisitions among European banks, placing the shares of Alpha Bank, Bank of Cyprus, Commerzbank, Credit Suisse, Depfa and Unicredito among it top list.

In terms of M&A, the Keefe Bruyette analysts see banks such as Bankinter, BPI, Depfa, Bank of Cyprus, Hypo Real Estate, Northern Rock, Spoleto, Alliance & Leicester and Carifirenze as prime takeover targets.

The list of banks likely to be among the buyers include Barclays, BBVA, BNP Paribas, Credit Agricole, Millenium BCP, Deutsche Bank, Societe Generale, Unicredito and HSBC.