UBS ups Laiki Bank target to EUR 10 per share

UBS has revised higher its price target on the shares of Laiki Bank Pcl (CPB) from EUR 7.46 to EUR 10 per share on the back of a sharp increase in anticipated profit increases, maintaining its Buy2 recommendation.

The Swiss bank sees the planned merger between Marfin Financial Group, Egnatia Bank and Laiki as highly beneficial and following the start of the common trading platform, it sees the stock’s liquidity improving.

Referring to the 9M06 results, UBS notes that the profits for the period were 12% above its forecasted profits, which originated from higher revenue and cost controls. The increase in profitability has led UBS to revise higher its forecasted EPS for Laiki from CYP 0.23 in 2006 to CYP 0.26, from CYP 0.25 in 2007 to CYP 0.29 and from CYP 0.33 in 2008 to CYP 0.37.

UBS now expects Laiki net interest income to improve to CYP 210 in 2006, CYP 246 mln for 2007 and CYP 285 mln in 2008 with total revenue jumping to CYP 310 mln, CYP 359 mln and CYP 414 mln in the respective 2006-2008 period.

Operating expenses are seen at CYP 164 mln for 2006, CYP 176 mln in 2007 and CYP 188 mln in 2008 while net profits are seen at CYP 86 mln in 2006 from CYP 77 mln the previous estimate to CYP 101 mln in 2007 and CYP 133 mln in 2008.