Pareto Bank (Buy, TP: NOK70.00) - Supportive business model
On the back of solid NII and still-firm cost efficiency, we expect Pareto Bank to report a Q2 ROE of 13.4% (results due at c07:30 CET on 19 July). While forecasting loan losses to remain somewhat elevated near-term, we find the bank’s business model – combining in-depth sector knowledge, thorough credit assessments and close customer relationships – supportive of credit quality. With the stock trading at a 2025e P/E of ~6.9x and a ~5% discount to 2024e book value, we continue to find the valuation attractive. We reiterate our BUY and have raised our target price to NOK70 (68).
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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