Piraeus Bank: Transformation story (stays HOLD)
We have revisited our model on Piraeus Bank, following the announcement of its updated business plan targets, the equity and AT1 issue, and the NPE frontloading plan. In our view, the bank is on the right path to lower its NPE ratio to below 10% within the next 12 months, and restore its profitability in a three-year period. We expect Piraeus to be a fully transformed bank by 2023-24E, with a single-digit NPE ratio, a ROTE of 8-10%, a fully-loaded CET1 of 12-13% and a TCR of 16-17%. Although the investment case is appealing for long-term investors, in our view; in the short term, the upside could be capped by the strong performance since the equity issue (+38%) and the relatively low discount vs. its Greek peers (c.15% on our 2021-23E P/TBVs). We rate the stock a HOLD, with a price target (PT) of EUR 1.90/share (from Under Review), and believe that any pullback in the share price could be an attractive entry point.
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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