BAWAG Group confirmed at HOLD, TP EUR 35 - Model update
Post 2Q reporting we adjust our estimates on the back of a somewhat better NII trend but also include higher contributions to the Austrian deposit insurance going forward. BAWAGs capital development should allow the bank to resume dividend payments next year including the potential to distribute the earmarked 2019 dividend. Still, we refrain from pencilling in the 2019 dividend in our estimates and only plug in the regular 50% payout. At currently 0.7x book value 2020e and assuming 8% ROE for 2020e/21e the stock trades at a ca. 10% discount to its European peers. We leave our TP unchanged at EUR 35 and confirm our HOLD recommendation.Bank fuer Arbeit und Wirtschaft is engaged in financial services. Co. maintains four segments: Retail and Corporate Customers, Key Accounts, Financial Markets, and Real Estate and Leasing. The Retail and Corporate Customers provides accounts and cards, e-banking, payments, savings, private and pension investments, and financing and leasing services to small and medium-sized enterprises. The Key Accounts segment involves in documentary business, financing, international payments, and e-banking activities. The Financial Markets segment provides treasury and investment banking. The Real Estate and Leasing segment includes real estate projects financing and real estate leasing activities.
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.
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