* We reduce our aggregate earnings estimates by 10% for 2015
Higher than expected provisions in Q1, plus the possibility of a deal now slipping into Q3 will weigh
on asset quality and funding. With a lasting solution to the Greek crisis we continue to believe that
the banks’ share prices would at least double on average and the banks could generate a
normalised RoTE of 13-16%. In this scenario we prefer Piraeus and NBG.
* Are we nearly there yet?
A small spurt of momentum as the EU, ECB and IMF align their views on a potential deal. But the
more important agreement with Greece remains frustratingly elusive. With Greece now bundling its
IMF payments until the end of the month a deal before then seems unlikely. Even missing this
deadline won’t mean the end of the road: If this year has taught us one thing it is that we shouldn’t
underestimate Greece’s ability to circumvent hurdles or find money when needed.