EUR 200.00 For Business Accounts Only

LIBERBANK: MEETING WITH THE COMPANY (ANÁLISIS BANCO SABADELL)

We held a virtual road show with LBK today, with the company sending positive messages that convey confidence on the risk of rising NPL levels stemming from Covid-19 and on the bank’s levers and flexibility to face the pressure on margins over the coming years. Trading at ~0.2x P/TE, we think the stock has low downside risk, whereas the upside, either from M&A possibilities or from some of the aforementioned measures being taken, is high. Regarding a hypothetical merger with Unicaja, at current levels the respective share prices are factoring in a ratio of 40% LBK / 60% UNI, a good starting point to resume negotiations, which could lead to a somewhat more favourable ratio for LBK (42%/58%). We reiterate our BUY recommendation.