Romanian Banks: Structural growth story (Banca Transilvania stays BUY, BRD-GSG downgraded to HOLD)
We remain constructive on the Romanian banks due to the positive outlook ahead. The key bullish drivers are: accelerating loan growth, a stabilisation of margins, a lower cost of risk and large capital ratios, which should enable the restarting of dividend payments. The return to growth mode and normality could translate into ROTEs of 14-16% and high dividend yields (>7%), on our estimates. Banca Transilvania (stays BUY, new price target (PT) at RON 3.5/share) is our top pick; while we have downgraded BRD to HOLD (from Buy), following its strong share price performance ytd, with a new PT of RON 20.0.
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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