Morgan Stanley has reiterated its positive stance on Greek banks, identifying Alpha Bank as its top pick and highlighting Eurobank’s earnings potential, as strong lending growth, resilient net interest income and scope for higher shareholder distributions support further share price gains.

In its latest report, the findings of which were shared by Greek business outlet Newmoney, the US investment bank said that it expects third-quarter results to be broadly in line with market expectations, with net interest income coming in between 0.5 per cent and 0.8 per cent above consensus forecasts.

For 2027 and 2028, its net interest income estimates are 3 per cent to 4 per cent above market consensus, potentially creating room for upward revisions to earnings-per-share forecasts.

Morgan Stanley has maintained its price targets for Greek banks, with Alpha Bank offering the largest implied upside at 28.9 per cent, followed by Eurobank at 21.6 per cent.

The bank has set a price target of €5.50 for Alpha Bank, implying upside of 28.9 per cent, while its €5.40 target for Eurobank represents potential gains of 21.6 per cent.

Despite the favourable outlook, Morgan Stanley believes third-quarter results alone are unlikely to provide a significant catalyst for most Greek banking shares.

For Eurobank, Morgan Stanley forecasts net profits of €406 million, 4 per cent above market consensus.

Net interest income is expected to exceed forecasts by 0.6 per cent, offsetting weaker-than-expected fee income.

Eurobank’s common equity tier one (CET1) capital ratio is projected at 15.4 per cent, falling to 14.2 per cent when the acquisition of Eurolife is taken into account.

Morgan Stanley estimates that any delay in completing the transaction would not result in lost earnings, but would instead leave the bank with a higher capital base.

Alpha Bank is forecast to report third-quarter profits of €232 million, in line with management’s expectations.

Net interest income is expected to come in 0.8 per cent above forecasts, while fee income is projected to be about 3 per cent lower.

Investor attention is focused on the bank’s upcoming Investor Day, where Morgan Stanley expects management to outline targets for 2027 and 2028 that could support an upward revision of more than 5 per cent to net profit forecasts.

The investment bank also considers it likely that Alpha Bank will announce a profit distribution ratio of 65 per cent, compared with market expectations of less than 60 per cent.

Morgan Stanley’s broader assessment is that sustained credit growth and stronger profitability in 2027 could support further upward revisions to earnings forecasts across the Greek banking sector, with Alpha Bank and Eurobank offering the greatest potential for positive surprises.

The bank expects the third-quarter results of the National Bank of Greece to be slightly ahead of market expectations, with net profits forecast at €317 million, around 3 per cent above consensus.

Stronger net interest income is expected to offset a seasonal decline in fee income, while the CET1 ratio is projected at 17.2 per cent, underlining the bank’s strong capital position.

Morgan Stanley maintains an equal-weight recommendation on the National Bank of Greece shares and has set a price target of €19.30, implying upside of 19.3 per cent.