OTP - recovery continues
We upgrade OTP to Buy with a new target price of HUF 15,500 which translates to an
upside of 19.0% including the HUF 430 dividend which the Bank may pay out after
regulator lifts dividend ban in September. From the target price increase, HUF 1,200 is
due to roll over and another HUF 1,000 is thanks to the lower cost of equity but overall
profit outlook seems much better relative to our last report.
High uncertainty remains but we claim that OTP is in a stellar shape with comfortable
capital levels and more prudent risk policy while mgmt. excellence should also
contribute to quality.
Our base case points to continuous recovery in earnings in 2021 and 2022 with the
latter promising higher yields and very low risk provisioning.
OTP’s main share price drivers will be acquisitions, recovery pace, a possible extension
of HU moratorium which we expect to be less costly than the previous rounds and
Ukrainian-Russian tensions.
OTP underperformed its regional peers YTD which we see unjustified relative to CZ and
Polish banks
OTP Bank is a financial institution based in Hungary. Co. is engaged in retail banking (account management, bankcards and Electronic sevices - OTPdirekt) corporate banking and private banking. In Hungary traditional banking operations are performed by Co. while specialized services, including car leasing, investment funds and insurance are developed and offered by Co.'s subsidiaries. Co. expands its operations throughout the region via its foreign subsidiaries. As of Dec 31 2011, Co. had total assets of HUF10,200,527,000,000 and deposits of HUF6,398,853,000,000.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.