Credit Suisse: Bank of Cyprus ‘outperform’ at €3.40

Maintains negative outlook on Greek banks

Credit Suisse has maintained its overall negative view on the Greek banks, according to a recent report.
Specifically, only Bank of Cyprus is an “outperform” due to its high profitability and low exposure to Greece, according to the report. It also reduces the price-target from EUR 4.20 to 3.40, taking into account an increase in the cost of capital due to higher Cyprus 10-year bond yields.
Credit Suisse has neutral ratings on National Bank of Greece and Eurobank. It maintained NBG’s price-target to EUR 6.80, while reduced Eurobank’s price-target to 4.40 from 5.40.
Alpha Bank, Emporiki and Hellenic Postbank remained on underperform ratings with steady price-targets of EUR 4.20. Piraeus Bank and ATEBank also remained on underperform ratings but with the reduced price-target of EUR 3.20 and 0.72, respectively.
The macro outlook in Greece continues to worsen, as latest forecasts of gross domestic product growth are -4.2% for 2010 and -3% for 2011, according to Credit Suisse.
“Although the banks in Greece are or are in the process of becoming well capitalised, this negative macro environment will likely have a negative impact on earnings through higher impairment charges and downward”, the Swiss bank concluded in its report.