Morgan Stanley and UBS signal positive outlook for Greek banking sector

Major financial institutions Morgan Stanley and UBS have issued positive outlooks for the Greek economy and its banking sector. Morgan Stanley maintains a positive stance on the Greek equity market, citing an ongoing cycle of economic and investment growth. The firm projects real GDP growth of 2% for both 2026 and 2027, driven by domestic demand and significant increases in fixed investments, particularly in energy, networks, industry, and digital infrastructure.

Morgan Stanley highlights Alpha Bank as a top banking choice, alongside Eurobank, Piraeus Bank, PPC (DEH), and Metlen. The bank notes that investments by listed non-financial companies are expected to rise from €2.8 billion in 2020 to approximately €11.2 billion by 2027.

Similarly, UBS identifies the Greek banking sector as one of Europe’s most attractive markets due to strong credit growth, profitability, and valuations. UBS estimates the sector could deliver approximately 15% annual total returns. While corporate lending in the eurozone has grown by 4.2%, Greece has seen significantly stronger annual growth between 8% and 10%. This strength is attributed to structural reforms and funding from the EU’s Recovery and Resilience Facility.

In its portfolio adjustments, UBS replaced Eurobank with Piraeus Bank as a top pick due to higher potential for total returns, setting a €12 price target for Piraeus. Both Alpha Bank and Eurobank remain relevant to the Cypriot market through their local operations.