Nordea har mod betaling udarbejdet denne analyse af BankNordik:
With a ~70% payout yield up to 2024E, capital repatriation remains key for the BankNordik share. Moreover, the two recent interest rate hikes should be net positive for BankNordik, as we expect an anticipated step-up in investment income to outweigh the negative second order effect from rate hikes on lending growth. However, yesterday (17 October) BankNordik downgraded its 2022 net profit guidance to DKK 140-170m due to negative market value adjustments. Yet, the negative market value adjustments should be seen together with an expected higher yield on the fixed income portfolio, which prompts us to make positive EPS revisions of 7-9% for 2023E-24E. Finally, we raise our Gordon growth-based fair value range to DKK 197-220 (177-199). The share is trading at a 2024E excess capitaladjusted P/E of ~3.6x, ~50% below its Danish peers.
Further rate hikes indicate upside to our estimates
Yesterday, BankNordik downgraded its 2022 net profit guidance to DKK 140-170m (DKK 160-190m), driven by the impact that the current uncertainty in the financial markets has had on the group’s market value adjustments in H2 2022 so far. However, higher money market rates are still set to boost BankNordik’s investment income with full effect from Q4 2022 onwards. Moreover, the markets expect another 125 bp in rate hikes to be announced in 2022, suggesting ~15% gross upside to our current 2023 pretax profit estimate. Yet, part of the gross upside will likely be countered by second order effects such as lower growth and higher provisions.
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