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its Eleftherias Kourtali
There are significant differences in the analysts’ estimates of where the Banco Nacional share price can come from, after the third quarter results.
Despite the strong rise of around 80% in the last month of the participation of the National Bank, the Axia Research sees a further significant increase of 25% compared to yesterday’s close, giving a price target of 1.92 euros following the announcement of third quarter results.
As he points out, Ethniki posted net profits in the quarter of around 101 million euros compared to its estimate of 64 million euros and 76 million euros, which was the average of the estimates of analysts in general (consensus).
This upward trend was driven by higher net interest income (INI) and fees, lower operating expenses and credit impairments.
Although Axia acknowledges that it is still early to assess the “strength” of the economic recovery in 2021, at the same time, it believes that the improved visibility around the possible influx of new NPEs due to the pandemic, combined with the position of stable capital, Investors will welcome strong PPI returns, coverage ratio and management projections for risk costs of 100 basis points. He points out that the price of the National Bank’s shares rose almost 80% in the last month compared to the 90% that was the average earnings of Greek banks during this period.
Furthermore, as Axia points out, the EIB Group recorded a decrease in NPEs of 0.2 billion euros which amounted to 10.3 billion euros, with the NPE index moving to 29.3% (-60 bp) . quarterly) as the bank prepares for the next start of Frontier’s securitization in the coming weeks. Capital ratios were stable, with CET1 at 15.9% and the total capital ratio at 16.9%. In the next period, as he emphasizes, the focus will be on the acceleration of the NPE reduction (mainly through the Frontier portfolio) and on how the bank will face the possible adversities due to COVID-19 (the gross inflows of NPE are estimated by management to be € 1 billion and NPE net inflows below € 500 million).
On your side Citigroup gives a target price lower than the current one at 1.50 euros, maintaining the Neutral / High Risk recommendation however, he emphasizes that the outlook for the bank’s quarterly results was very good, with improved operating trends and significant progress in reducing NPE (Frontera Project). More visibility for new inputs from NPEs, as he points out, will only exist after the expiration of suspended loans (moratoriums).
As he explains, to reach the target price of 1.5 euros, he took into account the estimates of the return ratio of RoE shares for 2021 of 4.1%, the cost of CoE shares of 13.9% and a rate of 0% growth. .
It recommends High Risk, as it points out, to reflect the high level of execution risks and macroeconomic uncertainty. Factors that could drive the EIB share price out of Citi’s target (up or down) are:
(1) Better or worse than expected revenue growth trends, driven by margins and the ability to impose commissions on customers.
(2) Higher forecasts due to macroeconomic uncertainty and / or new regulatory requirements.
(3) Most of the non-deferred tax (DTC) on the capital of the systemic bank.
For its part, Euroxx maintains an overweight position for Banco Nacional with a price target of 2.50 euros, which translates into a 64% rebound.
As noted, Ethniki announced a profit after tax from ongoing activities of € 137 million (compared to € 113 million expected by Euroxx) in the third quarter versus a profit of € 58 million in the second quarter, led by the highest basic and non-basic levels. basic income. The results are slightly better than the stock market forecasts in terms of net interest income. If the interrupted operations and costs of LEPETE are taken into account, the profit amounts to 101 million euros (compared to the 104 million euros expected by Eurixx) compared to 56 million euros in the quarter.
