Hedge Funds Take a Shine to Greece
The recent run in Greek bank shares has been spectacular, but the country’s lenders are still depending on a solid economic rebound.
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Photo: Bloomberg
By a number of measures, Greece is back in the game. Untouchable for investors for the best part of a decade, the southern European nation returned to the 30-year bond market last month, successfully tapping buyers flush with cash and hungry for yield. Optimism that Greece’s post-pandemic rebound will be more impressive than the rest of Europe’s has also drawn investors to one of the biggest plays on the country’s growth potential: its top banks.
The recent run in bank shares has been spectacular, with the market value of three of the country’s four largest lenders more than doubling in six months. Hedge fund notables such as John Paulson have been placing bets on Greek banks, whose path to sustainable profitability looks clearer now with bad-loan ratios at some firms on course to drop to below 10% thanks to mammoth disposals.