Pareto Bank (Buy, TP: NOK63.00) - Firm cost efficiency
Supported by further NII expansion and a firm cost/income ratio, Pareto Bank reported a Q3 ROE of ~14%, despite increased loan losses. Following the recently completed private placement, the end-Q3 CET1 ratio was up ~1.5%-points QOQ at 18.7%, leaving ample headroom to its lowered fully phased-in capital requirement of ~16.7% (including P2G). At a 2024e P/E of ~6.6x, we continue to find the valuation attractive, and reiterate our BUY and NOK63 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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