Eurobank (EUROB GA) Greece
Report by ResearchGreece
Doubles its stake in Hellenic Bank to 26% to become the largest shareholder in Cyprus’ second biggest bank - valuation wise, EUROB is paying a higher multiple than when it bought its original stake (July 2021), but the truth is the outlook has improved a lot, thanks to higher rates by the ECB and HB’s enormous cash balance of €5.3bn (excl. TLTRO) equal to 27% of its total assets. ResearchGreece expects HB to revise its RoTE target >10% from c.7% previously. Using 12% CoE they find the fair P/TBV to be closer to 1.0x, which implies EUROB bought the stake at a 50% discount to fair value.