Resurs Holding (Hold, TP: SEK45.00) - NII outlook still dim
We have cut our 2022–2023e earnings by 1–2%, as the Q3 net interest margin fell more than we had expected. We reiterate our HOLD and target price of SEK45 despite the non-demanding valuation at 9x 2022e EPS, or c7x after adjusting for intended shareholder distributions in Q4. In our view, Resurs’ digital transformation, including the migration of the core banking system to a modern, cloud-based platform, offers interesting long-term prospects, although many of the potential benefits are likely to be somewhat back-end-loaded.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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