Romanian Banks: Smooth sailing to a new normal (Banca Transilvania stays BUY, BRD stays HOLD)
It is difficult to ignore the Romanian banks, after another solid year, with >20% ROTEs. However, nothing lasts forever, and we expect the outlook ahead, for 2020-22E, to be more challenging, with loan growth moderating, NIM expansion fading away and the cost of risk returning to mid-cycle levels. Still, there should be no drama for the Romanian banks, in our view, as the return to normality translates into ROTEs of 15-17% and high dividend yields (>8%). We remain constructive on the Romanian banks and keep Banca Transilvania (stays BUY, price target (PT) up to RON 3.0/share) as our top pick.
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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