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Citigroup increases MPB TP

25/09/2009 11:31
In its report dated September 24, 2009 under the title “Unpopular Marfin”, Citigroup increased the TP of Marfin Popular Bank from €3.25 to €4, maintaining the buy recommendation. “Underperformance Unwarranted - Marfin Popular shares are down 73% from their peak, because of concerns on growth outlook and risk. Share price has underperformed Greek & Cypriot banks by 20pp ytd”, it said.

“We believe the bank's fundamentals are improving as revenues and asset quality are recovering”, the report noted.

According to Citigroup, “2Q09 revenues showed a significant improvement with NII being up 33% qoq compared to a disappointing 1Q09. NII is expected to increase further as deposit price pressure eases. Fee revenues are improving as well, thanks to recovering capital market trends and exposure to the IBU (offshore) segment”.

“We are forecasting a slower NPL formation of 50bps per quarter in 2H09, compared to the last two quarters 80bps. We expect only a further 20bps increase in 2010 and a decrease in 2011”, the report added.

“Last reported consensus earnings estimates for 2010E and 2011E are €0.22 and €0.33. We forecast €0.32 and €0.42 respectively, slightly up to reflect better than expected revenues and cost of risk trends”, the report stressed.

Its net profits will drop to €170 million this year and will increase to €264 million in 2010 and €345 million in 2011.

Institutional investors hold only 7%

“International institutional investors hold about 7% of the shares (latest data available) compared to c35% two years ago. Foreign ownership amounts to 19% for Bank of Cyprus and 45% for NBG”, the report said.

“Strategic shareholders hold a combined 28% of MPB, of which Dubai holds 18%”, it concluded.