Pareto Bank (Buy, TP: NOK68.00) - Loan-loss downtick
Helped by further NII expansion and a loan-loss downtick, Pareto Bank reported a solid Q1 ROE of 14.3%. While the CET1 ratio fell QOQ after strong lending growth (2.2% QOQ), the bank has a still-solid ~1.4%-point headroom to its 16.7% target. With the stock trading at a 2025e P/E of ~6.7x, we continue to find the valuation attractive. We reiterate our BUY and have raised our target price to NOK68 (63).
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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