National Bank of Greece Boosted by ECB Rate Hike Forecasts

The National Bank of Greece has reported stronger-than-anticipated first-half results, exceeding initial expectations. The bank's underlying net profit was €661 million, excluding extraordinary items, and its return on tangible equity (RoTE) reached 15.5 per cent.

Beta Securities has upgraded its forecasts for the National Bank of Greece following these results. A key factor behind this revised outlook is Beta's updated assumptions for European Central Bank (ECB) interest rates.

The brokerage has raised its forecast for the ECB's deposit facility rate to 2.25 per cent from 2 per cent, reflecting expectations that interest rates will remain higher than previously anticipated. This change is expected to positively impact the bank's net interest income and net interest margin, despite ongoing pressure on lending margins.