Addiko Bank confirmed at HOLD, TP EUR 13.30 - Confidence restored, but still a lot to do
The stock has partially re-rated following a significant improvement of capital ratios which opened the room for dividend payments (unpaid DPS from 2019), although the materialization of those is heavily related to the ECBs general dividend policy for the sector beyond Q3 21 and hence attached with high riskProgress in talks with the joint supervisory team (ECB, FMA) with regards to the future capital requirements as well as the reduction of the additional MREL requirement to zero have been acknowledged by the market
Operationally, Addiko will face fierce competition to fight for market share gains in its core markets, pressure from rates and the ongoing costs optimization combined with catch-up on digitalization front
Addiko has materially reduced the discount to peers now trading at 0.3X BV which looks fair given low single-digit ROEs expected for 2021-23e
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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