Komercijalna Banka: A sizeable growth story in the Balkans (BUY - initiation of coverage)
We initiate coverage of Komercijalna Banka ad Skopje with a BUY recommendation and a price target (PT) of MKD 7,953/share, offering upside of c.21.2%. The bank is a leader in the local, nearly oligopolistic, market, and we appreciate its best-in-class C/I ratios, the conservative structure of its balance sheet and its sound capital levels. On the negative side, we highlight the bank’s FX exposure and that its financial reporting is under the local GAAP. We still see upside for the current share price levels, especially on the back of the balance sheet liquidity, which is a lot higher than the market average and could offer enough ammunition for NIM and top-line growth, even in times of falling rates. The bank trades at 1.0x and 0.9x on our 2021E and 2022E P/BVs, 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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