Patria Bank: making progress, but still some way to go (stays HOLD)
We have updated and rolled forward our model on Patria Bank (PBK), maintaining our HOLD rating, but with a lower 12M price target (PT) of RON 0.090/share (9.3% upside), from RON 0.095/share. Although 2024E seems to have proven to be a more successful year than we expected previously, we believe it might be hard to replicate that success, and that 2025E might bring some bottom-line and profitability contraction, due to: 1) the still challenged macro backdrop, fuelled by fiscal consolidation, which does not bode well for loan book development; 2) further reference interest rate cuts by the NBR (an antagonist force, however, which should help with loan book development); 3) higher competitive pressure on the deposit pricing level, as we assume no further expansion of the L/D ratio; 4) rather sticky inflation; and 5) a higher COR than in 2024E. As such, we believe the current share price leaves little space for share price appreciation. The stock is trading at 0.6x P/BV on our 2024-25E figures.
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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