WOOD Flash – Alior Bank: publishes key targets for 2023-24E strategy
Yesterday (6 February), during trading hours, Alior Bank published its key targets for its 2023-24E strategy. We see the targets as largely neutral for our key assumptions, and we note that our current 2024E forecasts are in line with the ROE and capital ratios targets. We see the strategic targets update as neutral, by and large, as our 2024E forecasts, at least on the ROE front, appear to be at the minimum level defined in the strategic update. On first glance, the 2024E ROE target of at least 13% implies 2024E net profit of around PLN 1bn, and our 2024E net profit forecast stands at just above PLN 1bn currently – in line. Alior Bank trades at our 2022E P/BV of 0.8x and 2024E P/E of 4.9x. If the strategic targets are delivered on, we see the current valuation as still attractive. We note that our 12M PT is based on a mid-cycle ROE (average 2023-24E) of just above 11%. We also presented a potential valuation based on our 2024E ROE in our report on Alior Bank and the other Polish banks. Should the market be willing to fully price in at least a 13% ROE as sustainable in the long term, we would see our potential 12M PT under such assumptions at PLN 51.5/share, on our previous forecasts update and valuation for Alior Bank.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.
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