Alpha Bank’s management has made significant progress in reducing non-performing loans, enhancing efficiency, increasing commissions and is in an advantageous position to increase its size and profitability, taking advantage of the opportunities created by the Development Fund and Durability, say Citigroup analysts, in a report published today.
The house estimates a profitability of 9% in 2024, above the average market estimates of 8%. Citigroup notes that the balance sheet consolidation is proceeding faster than expected at Alpha Bank and the non-performing loan ratio is expected to approach 13% this year, 5 percentage points below initial estimates, with a view to falling to 2% in 2024. In addition, the Better-than-expected developments in forecast costs have allowed the Bank to optimally revise its estimates for 2021, from 120 basis points initially to 90 basis points. Following the further consolidation of the balance sheet, Citigroup estimates that the Bank will approach 60 basis points. in 2024.
Citigroup analysts are optimistic about the resumption of dividend payments, starting from the year 2023 with a return of 30% of profits, while placing Alpha Bank with a target price of 1.50 euros and a neutral recommendation.
Source From: Capital
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