Overview
Goldman Sachs has adjusted its recommendations on Greece’s four leading banks, promoting Eurobank from neutral to buy and shifting National Bank of Greece (NBG) down from buy to neutral, according to a note dated Thursday. The investment bank left its buy ratings unchanged for Piraeus and Alpha Bank, emphasising strong profitability and broadly resilient growth prospects across the banking group.
Valuation and price-target changes
Across the quartet of Greek lenders - National Bank of Greece, Piraeus, Eurobank and Alpha Bank - shares have rallied sharply since the end of 2021. Goldman Sachs notes an average surge of about 400% for the four banks over that period, versus a roughly 170% rise in the SX7P banks index.
In its latest revision Goldman Sachs lifted price targets substantially, by around 27% on average. The firm cited a lower assumed cost of capital as the principal driver behind the higher targets. The new targets are:
- Eurobank: increased to €5 from €3.50
- Piraeus: increased to €10.50 from €8.00
- Alpha Bank: increased to €5.10 from €4.20
- National Bank of Greece: increased to €16.75 from €15.10
Why Eurobank was upgraded
Goldman Sachs attributes Eurobank’s upgrade to its advantageous business mix and geographic footprint across Greece, Cyprus and Bulgaria, which the analysts say supports sustainable mid-teens return on tangible equity (ROTE). As of the nine months ended September 2025, the bank’s adjusted net profit composition was 47% from Greece, 35% from Cyprus and 16% from Bulgaria, the note states.
Why NBG was downgraded
National Bank of Greece was moved to neutral largely on valuation grounds, the report says. While NBG retains the strongest capital position among its domestic peers - a 19.0% CET1 ratio at September 2025 and mid-teens ROTE - the shares already trade at about 11 times 12-month forward price-to-earnings, broadly in line with other European banks, reducing the relative appeal of a buy recommendation.
Sector outlook and metrics
Goldman Sachs expects Greek banks to sustain elevated returns, forecasting average ROTE of circa 14% to 15% over 2026-2028 and CET1 ratios above 15%. The note highlights operational efficiency as a competitive strength: Greek banks feature cost-to-income ratios in the mid-30% range, compared with roughly 50% for Goldman Sachs’ broader European banks coverage.
Loan growth is identified as a key engine for earnings, with Greek lenders anticipated to expand loan books at roughly double the European average. The report projects loan growth of 6% to 8% annually through 2028, supported by corporate lending demand and a gradual pickup in household borrowing.
Strategic themes and recent M&A
Analysts flagged three principal themes to monitor into 2026: the sustainability and composition of loan growth between corporate and household segments; the need to reinvest in the cost base; and decisions on capital allocation balancing shareholder returns against strategic growth, including acquisitions.
Recent consolidation and deal activity among the Greek banks is noted as part of that strategic backdrop. Piraeus is integrating Ethniki Insurance; Eurobank is integrating Hellenic Bank and has announced an acquisition of Eurolife life insurance; and Alpha Bank recently completed its purchase of AstroBank in Cyprus.
Methodology shift
Goldman Sachs also changed its valuation framework for the sector, moving from a returns-based approach to a price-to-earnings methodology. The firm now applies target multiples ranging from 10.0 times to 11.25 times 2027 earnings estimates across the four banks.
This note outlines Goldman Sachs’ revised ratings, price targets and the key themes the firm will watch as Greek lenders seek to convert stronger capital positions and operating efficiency into sustained returns.