LHV Institutional Baltic Insight, July 22nd, 2021
* In sum, Coop Pank (CPA1T ET) reported Q2 2021 core income and operating profit figures broadly in line with our estimates, with the quarterly net profits reaching EUR 3.0m.* All in all, we consider CPA’s Q2 2021 growth and profitability figures as neutral. While we are glad to see CPA improving its efficiency ratios and being able to expand its domestic deposit base and loan portfolio rapidly, we are somewhat worried about declining interest margins and the sustainability of its asset quality. Following the recent subordinated bond issue in the amount of EUR 10m, CPA remains strongly capitalised, with the total capital adequacy ratio at 18.9% (20.3% if interim profits included) as at the end of Q2 2021, providing a solid buffer for any spike in loan impairments and enabling to continue with its aggressive growth strategy. In our view, CPA is well-positioned to exploit its synergies between banking and retail trade. Being a relatively small domestic bank, flexibility in decisions and quick product developments are important advantages for CPA.
* Please also refer to the tables in the attachment.
LHV Bank is an independent pan-Baltic bank, based on Estonian capital. The company was founded in 1999 by two founders of Hansapank (today’s Swedbank in the Baltics) and has been offering a full range of investment services for 15 years. In May 2009, LHV received a credit institution licence allowing it to provide all banking services.
The head office is situated in Tallinn, Estonia. Cross-border services are offered in Vilnius, Lithuania and in Riga, Latvia. LHV provides brokerage (institutional and retail), asset management, banking and capital markets services. Compared to other banks, we are more innovative and have more solid experience in investment and entrepreneurship.
The Bank, together with the Group asset management company employs over 320 people. LHV Group shares are listed on Nasdaq Tallinn.
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