WOOD Flash – PKO BP: 2024-27E strategic targets
PKO BP has published its 2024-27E strategic targets, communicating a minimum 2027E ROE target of 18%. Management has also committed to dividend payments/buybacks. The strategy is based on seven business pillars, many of them targeting market share increases. The current strategic KPIs are just a notch above our current financial forecasts for PKO BP and, thus, we see some minor upside risk for our current medium-term forecasts for the bank. We note that our current explicit forecasts reach out only to 2026E and the new strategic targets serve as a continuation of our current medium-term outlook for the bank, in our view. We see the strategic communication as supportive for our positive view on the bank, as they appear to fit well with our expectations. They even leave some upside potential, but this will be subject to us seeing positive signals from the execution of the strategic targets. PKO BP is trading at our 2024E P/BV of just 1.4x, which is neither reflective of its current ROEs, nor does it fully price in the medium-term ROE ambition of 18%+. At the current valuation juncture, PKO BP offers a c.9-10% annual dividend yield.PKO Bank Polski is a universal commercial bank offering services to both domestic and foreign retail, corporate and other clients. Co. is licensed to hold foreign exchange and currencies and sell/buy them, as well as perform a full range of foreign exchange services; open and hold bank accounts abroad and to deposit foreign exchange in these accounts. In addition, Co. conducts activities relating to leasing, factoring, electronic settlements via payment cards, as well as renders other financial services. As of Dec 31 2009, Co. had total assets of Zl156,478,685,000 and total deposit of Zl124,628,562,000. Co. operates in the Republic of Poland, Ukraine and Sweden.
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