Patria Bank Group: Financing Romanian SMEs (HOLD - initiation of coverage)
We initiate coverage of Patria Bank Group with a price target (PT) of RON 0.085, offering upside of c.3.5%, and a HOLD rating. Patria Bank is micro-cap company, trading on the local Bucharest Stock Exchange, and a niche player, with expertise in issuing loans to SMEs and micro-companies in the agricultural sector in Romania. We appreciate the bank’s specialised exposure and high margins but, on the negative side, we highlight its higher C/I ratio and NPLs, and weaker capital ratios vs. its peers. Despite this, we believe the bank should be able to weather the current COVID-19 crisis. We find the stock fairly valued at the current share price levels, trading at 0.9x P/BV on our 2020E.
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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