NLB Group: strong buffers to weather the storm (stays BUY)
After a very strong share price performance in 2021 (+68%), NLB Group has traded lower in 2022 (down 25% ytd), but broadly in line with its European peers (SX7E at -26%). Although the macro outlook remains very uncertain, we believe that NLB has solid buffers in place to weather the storm. We believe that, currently, the share price is attractive, with strong value for long-term shareholders, with the stock now trading at c.0.5x P/TBV, for a bank that can deliver mid-cycle ROTEs of >10%, high single-digit credit growth and best-in-class dividend yields (over 9% per annum), on our estimates. We remain BUYers of the stock, with a lower price target (PT) of EUR 90/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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