Central Europe Diversified Banks: What drives share price performance? Our charts suggest changes in estimates

The report examines what drives share price performance of Central European diversified banks, arguing that a change in expectations—mainly changes in earnings estimates—is the main, though not the only, factor behind price moves, since prices reflect current expectations. Three charts compare the year-to-date change (today vs. the beginning of the year) in Citi's expected 2026, 2027 and 2028 adjusted net profit with YTD share price changes for CEE financials. The charts generally support the thesis, with the most interesting cases being the outliers from the trend. The 2028 estimates chart shows a re-rating of Erste BP, OTP, Millennium and ING BSK, along with a de-rating of Alior. In hindsight the re-rating of Erste BP can be explained by an initial undervaluation driven by uncertainty surrounding the change of strategic investor; ING BSK by the upside for NII from decreasing hedging losses; Millennium by a significant drop in FX mortgage-related costs in 1H26 and the AT1 issuance;