BRD - Good 9M results confirm our positive stance - Instant Earnings Comment from Concorde Ltd. (Hungary)
BRD – Instant Earnings Comment
Recommendation: Buy
Target price (12M): RON 16.2
- BRD reported net profit in the first 9M came to RON 1,134 mln, implying a net income figure of RON 385 mln in the third quarter (RON 382 mln, after minorities).
- NII increased substantially by 9.8% q-o-q and 20.0% y-o-y thanks to strong expansion in NIM (3.8%! from 3.4%) while net F&C also grew by 2.8% y-o-y. We doubt that this trend of NIM will persist next year as deposit costs should also climb gradually following interest rates, but at least stable margins around 3.5-3.6% could stay.
- Costs also grew by 6.8% y-o-y but this was compensated by the growth in revenues. As a result, cost-to-income ratio came down to 45.3%.
- NPL ratio declined further to 5.8% with coverage at 73% and risk cost was again positive.
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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