Pareto Bank (Buy, TP: NOK62.00) - Another strong quarter
Pareto Bank reported another strong quarter, with a Q2 ROE of 14.7% supported by expanding NII, decent volume growth, sustained cost control and loan loss reversals. A healthy pipeline and robust credit quality bode well for near-term profitability, which in combination with an undemanding valuation (2022e P/E of 7.7x), has prompted us to raise our target price to NOK62 (59). We have lifted our 2022–2023 EPS estimates by 4–5%, on higher NII, 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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