Pareto Bank (Buy, TP: NOK70.00) - Growth momentum picking up
Helped by a slight QOQ NII uptick and still-firm cost efficiency, Pareto Bank reported a Q2 ROE of 14.2%. Driven by residential property financing, lending growth was a strong 3.5% QOQ. Loan losses were NOK26m (54bp), with the bulk linked to a few exposures in the residential property segment. We have made only minor changes to our 2025–2026e EPS. With the stock trading at a 2025e P/E of ~7.4x, we continue to find the valuation attractive, and reiterate our BUY and NOK70 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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