Pareto Bank (Buy, TP: NOK51.00) - Lending activity remains high
Q2 ROE of 13% was hampered by higher than expected loan losses and a higher capital base following the added equity capital during Q2. Increased lending rates and slightly back-end loaded Q2 lending growth bodes well for H2 NII, and the bank now targets 2019 lending growth of NOK2bn. We have lowered our 2020−2021e EPS by ~2−3% on higher costs and loan losses. We reiterate our BUY and NOK51 target price.
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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