Hellenic Bank: On the right track (upgraded to BUY)
We have upgraded Hellenic Bank to BUY (from Hold), as we revisit the investment case following the completion of the Cyprus Cooperative Bank (CCB) acquisition, and the capital plan to raise EUR 150m. Hellenic Bank trades at a 2019E P/TBV of c.0.35x, on a ROTE in the range of 7-8%, with superior capital vs. its peers (TCR at >20%) and better asset-quality trends (NPE coverage of 64%, with an NPE ratio of 25%). On the other hand, the bank needs to repair its ability to generate pre-provision profitability (via higher NIMs, fees to assets and a lower C/I ratio), in order to post a ROTE above the cost of equity (COE). At the current share price levels, however, we see Hellenic Bank as attractive, trading at a P/E of below 5x, on our 2019E net earnings. We set our new price target (PT) at EUR 1.20/share.
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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