JP Morgan maintains BOCY PT

In a report dated August 21, JP Morgan maintained OW and PT at €18 until August 2008, characterizing the title as “defensive growth bank stock”.

JP Morgan raised its EPS by 4%. “Following our 2Q07 results review, we are raising our EPS by 4% on lower provisions and stronger loan growth, maintaining ’09E and ‘10E unchanged”, the report said. “Our EPS ’07E is now €0.86; ’08E €1.05; ’09E €1.34 and ’10E €1.72. We now expect 52% EPS growth in ’07E, 21% in ’08E, 28% in ’09-10E”, the report added.

According to the report, “Attractive growth value at P/E 11.2x ’08E, 8.8x ’09E and ’6.8x 10E; P/B 2.8x, 2.3x, 1.8x, respectively, with average ROE of 28%”.

The analysts suggested that the Bank of Cyprus growth is based on 3 legs: the Cypriot market gains (ytd from 26.4% to 27.8% in lending; from 29.5% to 30.1% in deposits) supported by higher margin asset mix, the Greek growth (maturing network, expect ROE to reach 21% by ’08E from 14% in 2006), and the Russian off-shore opportunity. “International business likely to contribute about 20% of group profits by 2010E”, the report concluded.