TLV - Provisioning and pricing power overlooked
We upgrade Banca Transilvania to Buy with a higher TP of RON 3.0 which
including our expected dividend after regulatory approval would point to an
upside of 18.9%.
BT’s Q1 result was a remarkable surprise on provision releases, and good
operating result on a yearly comparison.
While yield environment is low, according to the Bank, most of the rate cuts
were already included in pricing. Moving forward, while our base case points to
an unchanged rate policy for this year, given other regional central bank
comments, we can not exclude fully a similar monetary policy hawkish
guidance by the NBR. Even if this is not the case, it is very likely that interest
rates should be on the rise next year and knowing BT’s track record, NIM
should reflect this impact almost immediately as soon as rate hikes happen.
Concorde Securities Ltd. is Hungary’s leading independent company engaged in investment banking activities. It provides its clients with integrated financial services, including securities trading, research, corporate financing advisory, capital market transactions, wealth management and investment advisory. The operational management of the company is the responsibility of the CEO, while the owners/managers (who control one-third of the company through their shares and options) are in charge of its strategic governance. Concorde Securities Ltd. is a member of the Budapest, Frankfurt, Warsaw and Bucharest stock exchanges, as well as of the Hungarian Association of Investment Service Providers.
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