WOOD Flash – Hellenic Bank: good delivery in 2020; the stock remains undervalued
Hellenic Bank reported another solid set of results for 4Q20, in line with our estimates. In 2020, the bank delivered a strong 41% yoy reduction in NPEs and a ROTE of c.5%, despite the pressure on NII, the high C/I ratio and the excessive capital position. We reiterate our view that Hellenic Bank is a cheap, value stock, trading at a P/TBV of 0.29x and a P/E of below 6x on our 2021E figures, with a lower NPE ratio than its Greek peers (15.7%), higher cash coverage (59%) and best-in-class capital (a TCR of 22.3%). The current P/TBV multiples imply a cost of equity of 16% (based on the 2020 ROTE of 4.8%), which we believe is excessive.
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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