Raiffeisen - Better days ahead
We update our target price for Raiffeisen in light of recent results and changes to
the outlook. Although we are optimistic regarding RBI’s future, we hold the
conservative view that FX conversion is a considerable risk in the near future,
hence we keep the amount deducted from the 12M target price. Our updated
target price is EUR 23.0 and given current share price of EUR 19, we maintain our
Buy recommendation.
Margin pressure building up in several core markets for RBI, emphasized by FX
depreciation, however recent rate hikes in Russia and Ukraine allow for some
optimism in the region. Several countries introduced rate cuts in an attempt to
contain the macroeconomic effects of COVID-19 last year, resulting in lowering
margins in all regions, severely hitting NIIs, but we believe rates will start returning
to pre-COVID levels in 21H2, converting to NIM growth starting next year.
Raiffeisen Bank International is a universal bank focusing on corporate and retail customers in Central and Eastern Europe (CEE) and on corporate customers in Austria. In CEE, Co. consists of a network of banks, leasing companies and financial service providers. In Austria, Co. is involved in corporate finance and export and trade finance banks. Co. provides services to customers in 2,800 branch offices. In the retail banking business, Co.'s product and service portfolio comprises inter alia credit services (mortgages, credit cards and personal loans), as well as payment transaction and current account package services. As of Dec 31 2014, Co.'s total assets amounted to Euro121.6 million
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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