A report by investment bank JP Morgan finds highly promising potential in the Greek banking sector, with the shares of the National Bank of Greece and of EFG Eurobank-Ergasias constituting the main investment options. JP Morgan describes the fundamentals of the sector as being «extremely attractive,» noting the high growth rates of the Greek bank business compared with that of their European counterparts, as well as the benefits accruing from cost-cutting. The report notes that the fast rates of growth in the retail banking market as well as the possibilities for further growth greatly enhance the sector’s profitability. Greek bank lending rose by 32 percent in 2000, by 26 percent in 2001, by 22 percent in 2002 and 17 percent in 2003. The forecast growth rate for 2004 is 18 percent, with the lion’s share going to mortgages and consumer loans. According to the survey, these impressive figures are underpinned by the overall positive economic environment. In the coming years, the banking sector is expected to benefit from such factors as population growth (mainly due to the settlement of immigrants), the economic impact of the Athens Olympics next month, European Union investment inflows and the banks’ expansion into the Southeastern European markets. JP Morgan sets target share prices for the National Bank of Greece (NBG) and Alpha Bank at 24 euros, for Eurobank and Emporiki at 22 euros, and for Piraeus Bank at 12.5 euros. NBG is JP Morgan’s top choice. The report notes the bank’s high liquidity as well as its positive outlook resulting from the restructuring plan of the new management under former Citibank Europe senior executive Takis Arapoglou. EFG Eurobank-Ergasias is JP Morgan’s second preferred investment choice, due to its excellent performance in retail banking and the positive outlook for its expansion in the Romanian and Bulgarian markets. According to the JP Morgan survey, Alpha Bank continues to present a «stable investment opportunity» after it successfully refocused on retail banking and due to the benefits from its overall restructuring. In the mid-capitalization range, JP Morgan finds cause for confidence in the high growth rates of Piraeus Bank, which numbers 257 branches in Greece and in the rest of the Balkans while controlling a full 10 percent of the Greek market. Compared to the rest, Emporiki Bank is considered the least attractive of the banks covered by JP Morgan. Yet the restructuring plans of the new management under the leadership of George Provopoulos are seen in a positive light. The survey notes that Emporiki became weaker in the last few years as a result of bad management and the application of «aimless strategies.» Under the new management, the outlook is brighter for Emporiki.