Pareto Bank (Buy, TP: NOK56.00) - Improving capital position
While we forecast more moderate QOQ lending growth, we expect PARB to report a Q3 ROE of 13.9%, just shy of its 14% long-term target, supported by further NII expansion. Given the turbulent macroeconomic outlook, we have lowered our target price to NOK56 (62) and our 2023–2024e EPS by ~3–5%, driven by slower volume growth and slightly higher loan losses. That said, at a 2023e P/E of 6.2x, we continue to find the valuation attractive and reiterate our BUY.
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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