DB maintains buy target on Marfin Popular Bank

Deutsche Bank AG/London analysts are maintaining their Buy recommendation and target price of EUR12 on the shares of Marfin Popular Bank following the release of the 2007 preliminary results.

“Our target price is based on a DDM valuation (estimated sustainable ROE of 20%, a cost of equity of 11% and a sustainable growth rate of 4.5% (versus 2%/ 3% for mature

countries)) reflecting our expectation of strong EPS growth for the group (+35% between 2007 and 2010),” said DB.

“Marfin Popular Bank published a solid set of results, with core net profit 10% above our estimate,” note DB analysts. Given that the share price has been weak over the past few months, these results should reassure the market in terms of group fundamentals.

Management clarified a few points during the conference call. 1/ Marfin does not need any capital increase to achieve its business plan; 2/ Dubai may have the authorization from the regulator to increase its stake in MPB as early as next week and is due to buy shares in the market; 3/ in terms of corporate governance the cross shareholding between MPB and MIG will disappear by year end as Marfin will sell part of its stake (6.5%) in MIG to Dubai and is due to sell the rest (ie 2%) on the market by year end.

Marfin Popular Bank has published Q4 07 core net profit of EUR 46mln, 10% above

our estimate, say DB analysts. There were two one-off items: 1/ Euro 46.5m of capital gain on the sale of Bank of Cyprus stake, and 2/ Euro 12m costs related to donations for the fire victims.