Georgian Banks: Relying on a smooth ride (BGEO upgraded to HOLD, TBC stays HOLD)
In this report, we update our views on Georgian banking. As it stands, the banks are not meeting the non-forbearance level of the regulatory CET1 minimum. We believe the risks are mainly to the downside on the NIM and the COR, and that the valuations are fair, assuming things go smoothly. In our view, however, despite the slump in the stocks due to the COVID-19 crisis, investors are not being compensated for the downside risks on asset quality, earnings momentum and capital. We would seek cheaper entry points to take the rough with the smooth and put these banks back on our radar. We have upgraded Bank of Georgia (BGEO) to HOLD and keep TBC a HOLD, with new price targets (PT) of GBP 9.2/share and GBP 9.4/share, respectively.
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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