Alior Bank: trading cheaply, but in stand-by mode (stays BUY)
We keep Alior Bank as a BUY and increase our 12M price target (PT) to PLN 114.3/share (vs. PLN 111.1 previously), which, in essence, is a valuation call. Alior is still the one of cheapest Polish banks under our coverage (2024-25E P/E and P/BV of 4.9-5.9x and 1.1-1.0x respectively) and offers a 10%+ dividend yield in the next 12 months. We see the bank as having a higher risk profile, and therefore, while the upside is appealing, especially the dividend yield, we see better risk-reward profiles elsewhere among the Polish banks. As such, Alior Bank is not one of our top picks. It is also in a position where it has to wait until a potential agreement is reached between PZU, its current strategic shareholder, and Bank Pekao, currently a sister company within the same financial conglomerate, to potentially move PZU’s stake in Alior Bank to Bank Pekao. We believe this transaction may be a prelude to a full merger between Alior and Pekao in the future but, at the same time, the markets may have to wait longer for that to be announced.Alior Bank is a universal lending and deposit-taking bank which renders services to individuals, legal persons and other entities which are Polish and foreign persons. Co.'s core activities include maintaining bank accounts, granting loans and advances, issuing banking securities and purchasing and selling foreign currency. Co. also conducts brokerage activities, consulting and financial agency services and renders other financial services.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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