Avanza Bank (Buy, TP: SEK510.00) - Set for strong NII recovery
Avanza’s Q4 results were not dramatic overall, but with somewhat lower fund revenues than expected, and the long-term cost guidance raised to ‘9–12% per year’ (from ‘8–10%’ previously). As a consequence, we have cut our 2019–2020e EPS by 4–5% and our target price to SEK510 (530). Although we find the raised cost growth guidance somewhat concerning, we reiterate our BUY, still expecting strong earnings growth for Avanza of c25% per year over 2019–2020, with good support from the recent rate hike in Sweden which will should lift Avanza’s NII markedly starting Q1 2019.Avanza Bank Holding is the holding company of the Avanza Bank Group. Co.'s offerings comprise of: brokerage services, which enable investments in Swedish and foreign equities, bonds, funds, derivative financial instruments including futures, warrants and options, investment advisory services, pension products, pension insurance, as well as capital insurance services. Co. targets private individuals, high net-worth customers, corporate customers, day traders, fund managers and institutions.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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