Pareto Bank (Buy, TP: NOK55.00) - Sustained momentum
We forecast a Q1 ROE of 13.5% (results due at 07:30 CET on 29 April), just shy of Pareto Bank’s 14% ambition, owing to continued cost efficiency and robust asset quality. We expect the bank to distribute the postponed NOK1.5 DPS for 2020 in due course, and to return to its dividend policy in 2021. We have lifted our 2022e EPS by c3%. Despite the recent share-price appreciation, we continue to find the valuation attractive at a 2021e P/B below 1.0x. We reiterate our BUY but have raised our target price to NOK55 (45).
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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