Raiffeisen Bank International: Riding the recovery (upgraded to BUY)
In this report, we present our updated forecasts and valuation for Raiffeisen Bank International (RBI). We have upgraded our rating to BUY (from Hold) and we set our new 12M price target (PT) at EUR 22.8/share, offering 18% upside. The key trigger for our upgrade on RBI is its inexpensive valuation (a 2021E P/BV of 0.5x, below its historical long-term averages), combined with our generally positive stance on the CEE banking sector. Should the recovery trend that we are hoping for in the coming quarters, after the very solid 1Q21 reporting season and if there is no major deterioration of the asset quality outlook, we would see only any twists and turns in the FX mortgage saga in Poland as potentially destroying the recovery outlook. We admit that, for RBI, due to its multiple geographies conglomerate structure, our forecasts are subject to higher risk than elsewhere in the CEE space.Raiffeisen Bank International is a universal bank focusing on corporate and retail customers in Central and Eastern Europe (CEE) and on corporate customers in Austria. In CEE, Co. consists of a network of banks, leasing companies and financial service providers. In Austria, Co. is involved in corporate finance and export and trade finance banks. Co. provides services to customers in 2,800 branch offices. In the retail banking business, Co.'s product and service portfolio comprises inter alia credit services (mortgages, credit cards and personal loans), as well as payment transaction and current account package services. As of Dec 31 2014, Co.'s total assets amounted to Euro121.6 million
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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