Pareto Bank (Buy, TP: NOK63.00) - Preparing for growth
Highlighting attractive opportunities for further expansion after solid 5.8% growth in H1, PARB has completed a NOK350m private placement at a NOK50.5 subscription price per share. This leaves a pro forma end-Q2 CET1 ratio of 18.8% (17.2%) versus its 16.7% fully phased-in requirement (including P2G). We continue to favour the bank’s strong track record with regards to profitability and asset quality, as well as its business model. We have lowered the share count, but raised our lending growth estimates, and thus have trimmed our 2025e EPS by ~1%. We continue to find the valuation attractive at a 2024e P/E of ~6.5x 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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