Resurs Holding (Hold, TP: SEK45.00) - Clouded ambitions
In our view, Resurs’ digital transformation, including migrating the core banking system onto a modern, cloud-based platform, offers interesting long-term prospects, albeit with many of the potential benefits somewhat back-end loaded. The removal of financial targets on loan growth, revenue margins and RONAV (replaced with a less granular profit growth target) adds to the profitability outlook uncertainty in light of recent quarters’ declining trend. We reiterate our SEK45 target price and HOLD.Resurs Holding, which operates through subsidiaries Resurs Bank and Solid Foersaekring, is engaged in retail finance in the Nordic region, offering payment solutions, consumer loans and niche insurance products. Co.'s operations are divided into three business segments: Payment Solutions; Consumer Loans and Insurance. Payment Solutions offers sales-supporting financing, payment and loyalty solutions to retail businesses as well as credit cards to the public. Consumer Loans focuses primarily on lending to consumers. Insurance offers insurance policies to consumers. As of Dec 31 2015, Co. had total assets of SEK25,565,420 and total deposits of SEK16,433,531.
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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