Pareto Bank (Buy, TP: NOK63.00) - Ready for volume expansion
Supported by further volume and NII expansion, we expect Pareto Bank to report a Q3 ROE of 13.6% (results due at c07:30 CET on 25 October). Given the completed private placement, we forecast a ~1.5%-point QOQ CET1 ratio uptick to 18.7%, leaving ample headroom to its reduced 16.74% fully phased-in requirement. We have made only minor estimate revisions. With the stock trading at a 2024e P/E of ~6.9x, we continue to find the valuation attractive. Hence, we 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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