Citi assesses local players

Banks in Greece, Cyprus and Turkey have particularly favorable prospects, says Citigroup in a report published yesterday. As far as Greece and Cyprus are concerned, the group picks as top choices the stocks of the National Bank of Greece (NBG), Bank of Cyprus and Hellenic Bank. On Greece, it notes that the economy is growing at rates that are significantly higher than the eurozone average, estimating that in 2007 the growth of gross domestic product will come to 3.9 percent, while in 2008 it will come to 3.6 percent. Regarding Greece’s credit expansion, it suggests that the rise in loans issued amounts to 18.5 percent, while noting that from its recent meetings with bank managers, it concludes that the pressure on interest rate margins is declining. Citigroup argues that NBG stands out not only thanks to its strong presence in Greece, but also due to its presence in Turkey through Finansbank, while it is reaping additional benefits from the group’s restructuring. It reiterates its target price for NBG at 55 euros, amounting to a rise of about 19 percent from the current price of the stock. On Cyprus, the group notes that the macroeconomic and banking environment remains strong. Bank of Cyprus (BoC) and Hellenic Bank stand out for their dominant position in the Cypriot market. For BoC, Citigroup sets its target-price at 17 euros (about 27 percent higher than the current price), while for the stock of Hellenic Bank it predicts a price of 7.50 euros or 38 percent higher than the price on October 25.