UBS has turned more positive on the Greek banking sector, arguing that signs of progress in talks with Greece's lenders meant the sector could rebound.
“We turn more constructive on Greek banks and upgrade Alpha Bank (ACBr.AT) to ‘buy’,” UBS wrote in a research note on Tuesday.
“The starting point is very challenging and risks abound, but we see a fundamental investment case and valuations suggest upside potential,” added UBS.
UBS's view echoes a similarly bullish position on Greek banks from Morgan Stanley, which earlier this month estimated that Greek bank stocks could rise 90 percent if Greece and its creditors could reach a deal on releasing new bailout funds and debt relief.
Athens's benchmark ATG equity index is down around 2 percent since the start of 2016.