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European Banks
Capital: misunderstood,
misused and misplaced
Nick Anderson
Analyst
+44 20 3207 7838
nick.anderson@berenberg.com
James Chappell
Analyst
+44 20 3207 7844
james.chappell@berenberg.com
12 June 2013
Banking
Eleni Papoula
Michelle Wilson
Andrew Lowe
Analyst
+44 20 3465 2741
Analyst
+44 20 3465 2663
Analyst
+44 20 3465 2743
eleni.papoula@berenberg.com
michelle.wilson@berenberg.com
andrew.lowe @berenberg.com
Eoin Mullany
Iro Papadopoulou
Analyst
+44 20 3207 7854
Specialist Sales
+44 20 3207 7924
eoin.mullany@berenberg.com
iro.papadopoulou@berenberg.com
For our disclosures in respect of section 34b of the German Securities Trading Act (Wertpapierhandelsgesetz WpHG) and
our disclaimer please see the end of this document.
Please note that the use of this research report is subject to the conditions and restrictions set forth in the disclosures and
the disclaimer at the end of this document.
European Banks
Banking
Table of contents
Capital: misunderstood, misused and misplaced
Introduction
Executive summary
Key charts
13
15
17
28
34
39
45
50
67
Valuation
69
Company section
73
74
76
78
80
82
84
86
88
90
92
94
96
98
European Banks
Banking
100
102
104
106
108
110
112
114
116
118
120
122
124
126
128
130
Appendices
132
136
European Banks
Banking
Barclays plc
Sell
BBVA SA
Sell
BNP Paribas SA
Sell
Commerzbank AG
Sell
Crdit Agricole SA
Sell
Sell
Sell
Deutsche Bank AG
Sell
DNB ASA
Buy
EFG International AG
Buy
Sell
Buy
ING Groep NV
Buy
Sell
Julius Br Gruppe AG
Hold
KBC Groupe SA
Buy
Sell
Closing price:GBp 62
PT: GBp 24
Nordea Bank AB
Buy
Sell
RBS plc
Sell
Banco Santander SA
Sell
SEB AB
Hold
Socit Gnrale SA
Sell
Sell
Swedbank AB
Buy
UBS AG
Buy
Unicredit SpA
Sell
Vontobel Holding AG
Hold
12 June 2013
Nick Anderson
Analyst
+44 20 3207 7838
nick.anderson@berenberg.com
James Chappell
Analyst
+44 20 3207 7844
james.chappell@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
European Banks
Banking
Summary
New
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Buy
Buy
Sell
Hold
Buy
Buy
Sell
Hold
Buy
Sell
Buy
Sell
Sell
Sell
Hold
Sell
Sell
Buy
Buy
Sell
Hold
Old
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Sell
Buy
Buy
Sell
Hold
Buy
Buy
Sell
Hold
Buy
Sell
Buy
Sell
Sell
Sell
Hold
Sell
Sell
Buy
Buy
Sell
Hold
GBp
EUR
EUR
EUR
EUR
CHF
DKK
EUR
NOK
CHF
EUR
SEK
GBp
EUR
EUR
CHF
EUR
GBp
SEK
EUR
GBp
EUR
SEK
EUR
GBp
SEK
CHF
EUR
CHF
Price Target
New
160.00
7.00
25.00
6.00
3.00
13.00
82.00
23.00
88.00
13.50
13.00
250.00
790.00
8.00
1.00
39.00
35.00
24.00
81.00
22.00
190.00
3.90
61.00
16.00
1450.00
165.00
17.00
2.50
25.00
Old
160.00
7.00
25.00
6.00
3.00
13.00
82.00
20.00
88.00
13.50
13.00
250.00
790.00
8.00
1.00
39.00
35.00
24.00
81.00
22.00
190.00
5.95
61.00
16.00
1450.00
165.00
17.00
2.50
25.00
EPS revision
FY1
FY2
0.0%
0.0%
0.0%
0.0%
0.3%
-3.2%
-37.3%
-48.8%
7.5%
3.2%
0.0%
0.0%
0.0%
0.0%
-4.1%
-16.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.1%
0.0%
0.7%
0.7%
-11.6%
-0.7%
-0.4%
1.5%
0.0%
0.0%
0.0%
0.0%
650.4%
-13.2%
0.1%
0.0%
0.0%
0.0%
39.3%
-12.6%
0.0%
0.0%
0.0%
0.0%
-24.4%
-10.8%
0.0%
0.0%
0.0%
0.0%
43.5%
-4.6%
0.8%
0.4%
0.0%
0.0%
Change?
N
N
Y
Y
Y
N
N
Y
N
N
N
Y
Y
Y
Y
N
N
Y
Y
N
Y
N
N
Y
N
N
Y
Y
N
FY3
0.0%
0.0%
0.6%
-48.8%
18.4%
0.0%
0.0%
-15.1%
0.0%
0.0%
0.0%
0.1%
0.7%
-0.7%
0.6%
0.0%
0.0%
-7.9%
0.0%
0.0%
-6.1%
0.0%
0.0%
0.1%
0.0%
0.0%
-3.6%
-0.1%
0.0%
FY1
27.62
0.99
4.64
0.34
0.99
1.74
8.71
2.50
8.37
0.88
1.53
21.38
96.49
0.63
0.14
1.52
3.34
3.59
0.81
3.05
6.13
0.51
5.67
2.85
228.15
13.37
0.69
0.13
1.94
EPS
FY2
29.80
0.83
4.40
0.85
0.95
1.92
9.20
3.17
9.59
1.19
1.70
22.37
106.36
0.82
0.15
1.90
3.51
2.81
0.87
3.61
15.17
0.58
5.93
3.69
239.23
13.92
0.90
0.26
2.04
FY3
33.04
0.96
4.67
0.95
1.05
2.16
9.68
4.79
10.01
1.44
1.67
23.40
116.88
0.92
0.16
2.32
3.61
3.63
0.91
3.56
23.91
0.61
6.13
4.03
252.82
14.40
1.03
0.34
2.31
FY1
27.62
0.99
4.62
0.55
0.93
1.74
8.71
2.60
8.37
0.88
1.53
21.36
95.80
0.72
0.14
1.52
3.34
0.48
0.81
3.05
4.40
0.51
5.67
3.77
228.15
13.37
0.48
0.13
1.94
OLD EPS
FY2
29.80
0.83
4.54
1.65
0.92
1.92
9.20
3.79
9.59
1.19
1.70
22.36
105.60
0.82
0.15
1.90
3.51
3.24
0.87
3.61
17.35
0.58
5.93
4.14
239.23
13.92
0.94
0.26
2.04
FY3
33.04
0.96
4.64
1.86
0.89
2.16
9.68
5.64
10.01
1.44
1.67
23.39
116.05
0.92
0.16
2.32
3.61
3.94
0.91
3.56
25.47
0.61
6.13
4.02
252.82
14.40
1.07
0.34
2.31
European Banks
Banking
Introduction
This is a crisis. A large crisis. In fact, its a 12-storey crisis with a magnificent entrance
hall, carpeting throughout, 24-hour portage, and an enormous sign on the roof, saying This
Is a Large Crisis. A large crisis requires a large plan. Get me two pencils and a pair of
underpants.
Captain Edmund Blackadder, Blackadder Goes Forth, BBC (1989)
There is a crisis in the regulation of bank capital.
Bank capital has become a very complex debate with a wide array of opinions from
academics, regulators, banks, the media and, of course, politicians. We do not claim
to have all the answers but we do believe that the debate over bank capital levels has
lost sight of the purpose of capital.
The sophisticated maths and modelling which underpins Basel II/III calculations
has blinded creditors, markets, regulators and bank managers to what capital really is
for. Anat Admati and Martin Hellwig coined the phrase the bankers new clothes
to describe some of the broader myths that have grown up in the media, among
politicians and even among the bankers themselves around what capital actually is.
In this note, we argue that capital is a simple concept. It is a form of bank financing
that covers unexpected losses or, in more popular parlance, unknown unknowns
or black swans. As with our previous reports, we unashamedly include an
examination of historical banking data and practices back to the 19th century. As we
have noted before, this a business with long asset lives and tail risks. It is also an
industry that is 700+ years old.
Those who cannot remember the past are condemned to repeat it.
Spanish/American philosopher George Santayana (1905)
In short, we believe that capital levels remain deficient, not least as they are
calibrated for idiosyncratic risks not systemic uncertainties. And Basel lies at the
heart of the problem. As Rogoff and Reinhart showed in 2008 (see Figure 2),
Periods of high international capital mobility have repeatedly produced
international banking crises, not only famously as they did in the 1990s, but
historically. Excess global liquidity can only compound the problem of highly
mobile capital. Banks remain unprepared for such outcomes.
We are also firmly of the view that fixing capital will not affect the asset side of the
balance sheet. However, until it is fixed, it will impede confidence and therefore the
broader economy (a point belatedly acknowledged by the ECB).
Finally, a note on terms:
Capital and equity. We are somewhat lazy and use these terms
interchangeably. Equity is a sub-set of bank capital but, as demonstrated by
the recent crisis, is the one proven form of loss-absorbing, permanent
capital.
Risk versus uncertainty. We address this in more detail later in the note,
but in short risk is measurable, uncertainty is not. Put another way, if
something is measurable then it is not uncertain.
European Banks
Banking
Figure 2. Recipe for banking crisis: just add capital mobility for extra spice
Capital mobility and incidence of banking crises all countries, 1800-2007
1
0.9
1914
0.8
35
Share of Countries in
Banking Crisis, 3 year
Sum
(right scale)
30
25
0.7
0.6
20
0.5
Capital Mobility
(left scale)
0.4
0.3
1825
15
10
1980
1860
Percent
High
0.2
2000
1980
1990
1970
1960
1940
1950
1920
1930
1910
1890
1900
1880
1870
1850
1860
1840
1830
1820
1800
1810
Low
1945
1918
0.1
Figure 3. Note: Eurozone banks are struggling to perform even without capital concerns
Share price performance, Eurozone banks
a) Absolute
b) Relative to market
200
120
180
110
160
100
140
90
120
80
100
70
80
60
60
Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13
50
Jan-11 May-11 Sep-11 Jan-12 May-12 Sep-12 Jan-13 May-13
European Banks
Banking
Executive summary
We need to create full transparency about the risks on banks balance sheets. Such
transparency is a pre-condition for the banking sector to return to lasting health. And a
healthy banking sector is a pre-condition to revitalising bank lending.
Mario Draghi, President ECB (June 2013)
The single supervisor, scheduled to start operating under the European Central Bank in
the summer of 2014, will not only help prevent banks from accumulating excessive risk.
Standing above national authorities, it will increase the pressure on banks to repair their
balance sheets.
Wolfgang Schuble, Minister of Finance, Germany (May 2013)
I am not sure advanced economies in general will find it easy to get out of their current
predicament without creditors acknowledging further likely losses, a significant writing down
of asset values, and recapitalisation of their financial systems...Just as in 2008, there is a
deep reluctance to admit the extent of the undercapitalisation of the banking system in parts
of the industrialised world[The] pretence that debts could be repaid [was comparable to
the 1930s]. We must not repeat that mistake.
Mervyn King, Governor of the Bank of England (October 2012)
The amount of capital that a bank needs is a function of: 1) the amount of
risk embedded in the asset side of its balance sheet; and 2) how much of
that risk is transferred away from bank creditors through the financial
safety net.
Finally, we note that risk within bank balance sheets, measured by the
volatility of asset values, has been stable for over 100 years. In other
words, increasing equity volatility is a function of falling capital ratios.
European Banks
Banking
The flaws in Basel are many and material. In the note, we list at least 14
disadvantages.
The key critique is that Basel confuses what capital is for: it uses
expected losses to model capital, whereas capital is for unexpected losses
(which by definition cannot be modelled). Put another way, it allows banks
to hold capital only for idiosyncratic failure (not the issue) rather than for
systemic failure (more likely and more damaging).
Central banks and regulators are losing faith, so why should anyone else
bother?
The systemic problem [in modern finance] lies in the lax control over
errors of judgment. This has arisen because of the mistaken belief that
diversificationcan substitute for the control of bad judgement through
due-diligence and oversight. Amar Bhide, Tufts University.
The key critique of equity-to-asset ratios is that they ignore the riskiness
of assets; thus banks are discouraged from holding liquid assets and
maximise risk per euro of assets held. We have no truck with this a wellrun bank will choose to do the right thing. The issue is incentives not
regulation.
This is the difficult bit! Capital is very subjective and the ideal amount
varies over time as the confidence of creditors ebbs and flows.
Other key issues are: should all banks have the same number (no, but
impractical to implement); what is the floor ratio below which no bank can
go under any circumstance bar bankruptcy (all the capital is there to absorb
losses, but a floor above zero is desirable as a margin of error); and where
10
European Banks
Banking
should the capital reside (it should be at subsidiary not group level, in our
view, a major issue for large/complex global banks; eg Santander)?
Should we target a number at all? No, but only as long as banks are free
to fail. Regulation by numbers is a recent phenomenon of the last 40 years
and its success is highly questionable.
Our two key principles are to include more not fewer assets, and only
capital of the highest quality.
A flexor model (spreadsheet-based), allowing the user to vary the definitions of the ratios
and also to risk-weight key asset classes for the 34 European and US banks in our
analysis is available on request.
11
European Banks
Banking
Key to making good the deficit is the time period allowed and the
incentives offered to banks.
Catalysts for change. Bank management and market pressure are unlikely
to have much effect. Key is the political/regulatory process. We note a
change in sentiment in the last month, with the ECB coming into line with
the Bank of Englands thinking that the problem is the quality of bank
balance sheets (the recognition of true asset values and appropriate recap
where necessary). The ECB/EBA have announced a balance sheet audit
process to conclude by mid-2014. Coinciding with the move to a formal
bail-in regime in Europe and the likely adoption of depositor preference, we
see capital deficits at European banks increasing in size and being
crystallised.
12
European Banks
Banking
Key charts
Figure 4. Basel does not work; bail-in requires more capital; ECB/EBA balance sheet review could
be Europes Takenaka moment
4.1 Capital ratios pre-crisis (average 2006-08) versus subsequent write-downs/losses (cumulative 2007-09)
a) Basel Tier 1 capital ratio
b) Equity-to-assets ratio
b) Switzerland (equity)
22%
18%
FDIC
established
20%
18%
All Banks
16%
Priority insurance
introduced
14%
16%
14%
12%
Depositor preference
introduced
12%
Liquidity insurance
introduced
10%
10%
8%
8%
6%
6%
4%
4%
Priority insurance
limits raised
2%
2%
4.3 Share price performance banks versus market, Japan (actual) versus Europe (2005 rebased to 1994)
120
Japan
Europe
110
100
90
Takenaka plan announced
80
70
60
50
40
30
20
93
94
95
96
97
98
99
00
01
02
03
04
05
06
13
07
08
09
10
11
12
13
2005
1995
1985
1975
1965
1955
1945
1935
1925
1905
2010
2000
1990
1980
1970
1960
1950
1940
1930
1920
1910
1900
1915
0%
0%
European Banks
Banking
1%
2%
3%
4%
5%
6%
7%
8%
9%
VONN
BAER
CITI
STAN
RBI
'Pain' ratios
GS
DNB
SWEDA
'Plain' ratios
KBC
HSBA
BAC
BBVA
RBS
MS
ISP
JPMC
EBS
UCG
SHBA
INGA
EFGN
LLOY
NDA
SEB
UBSN
DANSKE
BARC
BNP
CBK
SAN
GLE
DBK
CSGN
ACA
Note 1: Pain ratio: equity = tangible equity less minorities, state aid, deferred tax assets and IAS19; assets = on B/S incl gross derivatives plus off B/S
Note 2: Plain ratio: equity = tangible equity less minorities; assets = on B/S with derivatives netted
Note 3: Commerzbank pain ratio increases from 2.2% to 2.5% post rights issue
Source: Berenberg research, company data
14
European Banks
Banking
European Banks
Banking
level of capital is key to the banks stability, durability and longevity. But such a
funding strategy requires the bank to exercise the caution that Rae and Bagehot
learned from the 19th century banking crises which came to an end in 1866.
The modern Basel accords say remarkably little on what capital is for. There is
no discussion on this in the 77 pages of Basel III: A global regulatory framework for more
resilient banks and banking systems. The document tells us that banks need high quality
capital and it defines quality capital in a technical sense (common shares and
retained earnings), but it fails to reflect on what it is for. In contrast, the US Federal
Reserve at least acknowledges its purpose:
Bank capital serves as an important cushion against unexpected losses. It creates a strong
incentive to manage a bank in a prudent manner, because the bank owners equity is at
risk in the event of a failure. (Loan loss reserves are generally intended to cover expected
losses.) Thus, bank capital plays a critical role in the safety and soundness of individual
banks and the banking system.
Federal Reserve Bank of San Francisco (2001)
We would also flag Capies third lesson of the Victorian banking crises: that
regulation can also be the problem. As we will discuss later, the best intents of
Basels original capital accord became subsumed by banks gaming and lobbying the
system.
16
European Banks
Banking
Financial safety net. This covers the extent to which risks are ultimately
borne by those other than the banks creditors. Such safety nets put in place
by the national authorities comprise several elements: deposit insurance
schemes, bank resolution procedures (bail-in versus bail-out), regulation/
supervision, and the central banks lender of last resort role. The safety net
is supposedly augmented by the market discipline exerted by the banks
creditors (depositors, bond holders and equity providers) in which so much
faith has been placed by Basel.
Balance sheet risk and financial safety nets are linked, however. The more the risks
are not borne by the banks creditors (ie the stronger the safety net), the more risks a
bank may choose to take on the asset side of its balance sheet (our emphasis in
bold).
Bank safety nets are difficult to design and administer, because they have the conflicting
objectives of protecting bank customers and reducing banks incentives to engage in risky
activities. In several countries including the US, the financial safety net, structured to reduce
the vulnerability of the financial system, appears to have had quite the opposite result
There is a real danger that regulatory forbearance policies and overly
17
European Banks
Banking
US. Prior to the establishment of the FDIC, US banks typically had capital
equal to 15-20% of assets. Following the launch of the FDIC, it settled in
the range of 6-8% from 1945 onwards. The introduction of depositor
preference, however, pushed it from the bottom to the top of that range.
European Banks
Banking
Equity as % Assets
Equity as % Deposits
40%
35%
FDIC
established
30%
Depositor preference
introduced
25%
20%
15%
10%
5%
2005
1995
1985
1975
1965
1955
1945
1935
1925
1915
1905
1895
0%
Eqty as % Deposits
Priority insurance
introduced
30%
Liquidity insurance
introduced
20%
Priority insurance
limits raised
10%
2005
1995
1985
1975
1965
1955
1945
1935
1925
1915
1905
0%
Note 1: Priority insurance introduced in 1934 (comparable to depositor preference; ie depositor has priority in
bankruptcy subject to limits) with limit of CHF5,000 per depositor; raised to CHF10,000 per depositor in 1971 and
to CHF30,000 in 1997. Liquidity insurance introduced 1984 in which member banks mutually guarantee to pay out
deposits that have priority
Note 2: All banks includes cantonal, regional/savings, Raiffeisen and other banks as well as the big banks. Since
2005, there are only two banks in the big bank group; ie UBS and Credit Suisse
Source: Berenberg research, SNB
19
European Banks
Banking
Published
16%
14%
Corporation tax
introduced
Capital raising
controlled by
government
12%
True
Deposit insurance
introduced
10%
8%
6%
4%
Hidden reserves
disclosed
2%
0%
1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010
Note UK banks had hidden reserves from 1860s to 1969
Source: Billings and Capie, Bank of England
20
European Banks
Banking
No resolution regime (and the too big to fail TBTF issue). This
was the common situation in most countries leading up to the crisis. In this
scenario, the authorities have three choices: use existing generic corporate
bankruptcy legislation, try and sell the firm, or bail-out the failed firm with
taxpayer monies.
The market interpreted the Federal Reserves rescue of LTCM in 1998 as
the endorsement/confirmation of the unspoken TBTF doctrine as official
policy. The market has taken a similar view in most other countries. If a
bank is TBTF, it will always be rescued. If a bank is always rescued, it needs
less capital to reassure its creditors. We note the big regulatory/political
push, especially in the US, to remove this hidden subsidy.
European Banks
Banking
The European Commission (EC) has been working on a bail-in directive for some
time. The deadline for the European Union to put the EC directive into law is June
2013. It requires approval from both the European Parliament and national
governments.
As Gunnar Hoekmark, a member of the European Parliament leading work on bailin legislation, said in an interview in April: Secured liabilities such as covered bonds
shall not be subject to bail-in. [The bail-in plans exclude debt] backed by assets or
collateral. He went on: [The law must give] high legal certainty. This means
secured liabilities shall be secured and insured depositors shall be protected. Legal
clarity is crucial in order to make the bail-in tool applicable in crisis situations.
The devil, of course, is in the detail. But as the Dutch Finance Minister (and Chair of
the Eurogroup) Jeroen Dijsselbloem made clear in the wind-up of SNS Reaal in
January, bail-in is the future and non-depositor unsecured creditors will face losses.
He repeated his bail-in is the future views following the Cyprus bank rescue in
March.
Loan forbearance
22
European Banks
Banking
Another major influence on bank capital is non-performing loans and the extent to
which they are appropriately covered through balance sheet provisions and
collateral. The original Basel I accord (1988) acknowledged the close relationship
between capital and provisions.
Under pressure to build capital ratios, we believe that some banks have allowed nonperforming loan (NPL) coverage ratios (including collateral) to fall. Commerzbank
(Figure 9) is a case in point where the ratio has dropped from 100%. Returning to
100% coverage would reduce Commerzbanks tangible equity by 7%.
With uncertainty over collateral values, prudency dictates that banks should aim for
100% coverage of NPLs (including loan loss provisions and collateral).
23
European Banks
Banking
Figure 9. Coverage-lite
Commerzbank NPL coverage ratio loan loss provisions plus collateral
110%
100%
90%
80%
70%
60%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
08
09
10
11
12
13
The third key influence on a true and fair view of banks asset values is Level 3
assets. Under IFRS, banks are required to hold all financial assets at fair value.
Loans are exempted and can be carried at amortised cost but all other financial
assets must be held at fair value.
Banks and their auditors have three options:
At the risk of being cynical, if a bank is short of capital then will it value its Level 3
assets very conservatively, reflecting the subjective nature of the process, or more
generously? There can be little doubt in the answer.
European Banks
Banking
We discuss how banks can manage the RoE impact of higher equity-to-asset ratios
later in the report.
Economies of scale and risk diversification. The reduction in equity-toasset ratios through the late 19th century up to the 1930s has been attributed
by some commentators to consolidation of the banking industry in various
countries. The more diversified a banks credit portfolio, the lower the
maximum losses it is likely to face and therefore the less capital it needs.
It is likely that the maximum benefits of risk diversification were achieved
some time ago (see Figures 10 and 11). In the UK, for example, the five
largest banks held 31% of deposits in 1900 but by 1920 this had reached
80% (source: Saunders and Wilson (1999)). Consolidation was slower in the
US due to regulatory restrictions on the share of national deposits any one
bank could have (10%). We also note Handelsbankens views on
diversification. It regards the benefits as overstated and believes that
diversification is no substitute for proper credit appraisal.
4,500
4,000
2,000
3,500
3,000
1,500
2,500
2,000
1,000
1,500
1,000
500
500
0
0
1895
1915
1935
1955
1975
1995
1905
Source: FDIC, Federal Reserve, St Louis Fed, SNB, Swiss Federal Statistical Office
25
1925
1945
1965
1985
2005
European Banks
Banking
Glass-Steagall
repealed
FDIC
established
1,000
100
Federal Reserve
established;
Pujo Committee
Post 1934 peak
in number of banks
at 14,469
10
Number of banks
peaks at 30,456
Depositor preference
introduced
Glass-Steagall
Act 1933
1895 1905 1915 1925 1935 1945 1955 1965 1975 1985 1995 2005
Source: Berenberg research, St Louis Fed, FDIC, Federal Reserve
26
European Banks
Banking
Figure 12. Price is what you pay, risk is what you get
Equity and asset volatility bank balance sheets
a) UK
EQUITY VOLATILITY
ASSET VOLATILITY
0.05
0.05
0.045
0.04
0.04
0.035
0.035
0.03
0.03
0.025
0.025
0.02
0.02
ASSET VOLATILITY
0.015
0.015
0.01
0.01
0.005
0.005
0
1988
1983
1978
1973
1963
1968
1953
1958
1948
1938
1943
1928
1933
1923
1918
1913
1908
1903
1893
1898
b) Canada
ASSET VOLATILITY
EQUITY VOLATILITY
0.05
0.05
0.045
0.045
0.04
0.04
EQUITY VOLATILITY
0.035
0.035
0.03
0.025
0.03
ASSET VOLATILITY
0.02
0.02
0.015
0.015
0.01
0.01
0.005
1989
1992
1986
1980
1983
1974
1977
1959
1962
1965
1968
1971
1947
1950
1953
1956
1944
1938
1941
1926
1929
1932
1935
1923
1920
1917
1911
1914
1908
1899
1902
1905
1893
1896
c) US
ASSET VOLATILITY
EQUITY VOLATILITY
0.14
0.6
EQUITY VOLATILITY
0.12
0.5
0.1
0.4
0.08
0.3
0.06
0.2
0.04
ASSET VOLATILITY
0.1
0.02
1992
1989
1986
1980
1983
1974
1977
1959
1962
1965
1968
1971
1947
1950
1953
1956
1938
1941
1944
1923
1926
1929
1932
1935
1920
1917
1911
1914
1908
1899
1902
1905
1893
0
1896
Note: Equity volatility derived from published share price data; asset volatilities derived by deleveraging equity volatilities using
balance sheet data
Source: A. Saunders and B. Wilson; Impact of consolidation and safety-net support on Canadian, US and UK banks
(1999)
27
European Banks
Banking
European Banks
Banking
balance sheet and thus instinctively prices loans to match the likely riskiness
of the future cash flows.
Once rules are set, inconsistencies, loopholes and opportunities are there to be
exploited and arbitraged. Basel IV, the next iteration, cannot be that far away.
How do you model the unexpected? We are truly intrigued by the idea
that banks are expected to model the unexpected. Models are by definition
based on past experience: they predict the future by extrapolating the past.
Basel II and III are built on the very notion that banks can model the
unexpected; this is oxymoronic. Thus at the heart of Basel lies a
fundamental flaw that bank capital can be modelled from expected losses.
The economist Professor John Kay dismisses it as pseudo-science.
Relying on simplistic faith in arguably proven risks and formulas is intrinsic
incompetence. It is not what we know but what we do not know that we must
always address to avoid major failures, catastrophes and panics.
Richard Feynman, Nobel prize-winning physicist
(Indeed, we wonder whether the increasing frequency of financial crises and
the volatility of markets are the very function of the belief that the
unexpected can be captured in a model. The stronger this belief, surely the
greater the surprise when something happens outside of what was
predicted.)
European Banks
Banking
Lack of data over time. Let us suppose that the unexpected losses can be
modelled by extrapolating trends from past credit loss experience (the basic
assumption behind all Basel models). For almost every European bank, this
is based on data from the early 1990s onwards; ie little more than 20 years.
As we have noted in previous reports, the debt cycle is perhaps 60-70 years
in duration. Thus banks models are capturing only one-third of the debt
cycle and a very benign stage at that. Consider retail mortgages.
Exceptionally low losses in the last 20 years have been associated with
favourable demographics and supply shortages. What if the ageing of and
decline in the overall population led to material declines in real house
prices? Would losses on retail mortgages remain in the range of 10-20bp?
European Banks
Banking
Spreadsheet errors. Of course, even if all of the data were reliable and the
model design valid, it presupposes that a highly complex spreadsheet is
without errors arising from its construction. It is estimated that 90%+ of all
spreadsheets contain errors (source: EuSpRiG). However, only the truly
exceptional are revealed, the most recent being associated with JP Morgans
CIO losses.
Further errors were discovered in the Basel II.5 model, including, most
significantly, an operational error in the calculation of the relative changes in
hazard rates and correlation estimates. Specifically, after subtracting the old rate
from the new rate, the spreadsheet divided by their sum instead of their average, as
the modeler had intended. This error likely had the effect of muting volatility by a
factor of two and of lowering the VaR.
JP Morgan Task Force Report 2012 CIO Losses
31
European Banks
Banking
Figure 13. Einstein would not approve risk cannot be created or destroyed
Average risk weights RWA as % total assets
55.0
UK
Europe
US
50.0
45.0
40.0
30.0
Dec 03
Mar 04
Jun 04
Sep 04
Dec 04
Mar 05
Jun 05
Sep 05
Dec 05
Mar 06
Jun 06
Sep 06
Dec 06
Mar 07
Jun 07
Sep 07
Dec 07
Mar 08
Jun 08
Sep 08
Dec 08
Mar 09
Jun 09
Sep 09
Dec 09
Mar 10
Jun 10
Sep 10
Dec 10
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
35.0
Source: OECD
Spirit of Basel lost: Part 1 its all about the number. Both the original
Basel I accord of 1988 and the revised Basel II framework of 2006 were
clear that the framework is designed to establish minimum levels of capital
for internationally active banks. The wording was clear that national
authorities will be free to adopt arrangements that set higher levels of
minimum capital. Somehow it never really happened. In interpreting the
latest version, Basel III, the market and therefore the banks have decided to
reach the new targets as soon as possible (and not by 2019) and ignore what
The Economist called the carefully calibrated scale of capital charges.
Its a race to 10% [core tier 1 ratio] and beyond.
Anshu Jain, co-CEO Deutsche Bank
32
European Banks
Banking
Spirit of Basel lost: Part 2 the tail is wagging the dog. The whole
point of the original Basel accord was the international convergence of
supervisory regulations. How can this possibly be the case today with the
wide disparity of risk weights across multiple homogenous lending classes?
Banks rated pass which subsequently failed: Dexia (ranked 13th with
CT1 under adverse scenario of 10.4%), SNS Bank (ranked 49th with CT1 of
7.0%) and Bank of Cyprus (ranked 64th with CT1 of 6.2%).
Dexia is the stand-out. At end-2010 it reported a CT1 ratio of 12.1%, which
as noted fell less than 2% points under the adverse scenario. In contrast, its
tangible equity-to-adjusted assets ratio (deferred tax assets and derivatives
excluded) was 1.0% at end-2010!
33
European Banks
Banking
34
European Banks
Banking
The systemic problem lies in the lax control over errors of judgment. This has arisen
because of the mistaken belief that diversification (and well aligned incentives) can substitute
for the control of bad judgment through due-diligence and oversight.
Amar Bhide, Tufts University
Predictability
Simplicity
Accountability
Historical support
b. Predictability
Analysis from the OECD and Bank of England (Figures 15 and 16) shows the better
predictability of future losses with the equity-to-assets ratio versus the Basel riskbased ratio.
The causality of the relationship is unclear. What is clear to us, however, is that
banks that focus on building a strong balance sheet structure (measured by a high
equity-to-assets ratio) rather than complying with Basel capital regulations (where
RWA optimisation is frequently resorted to) tend to incur lower losses and last
longer.
The driver may be that banks which do not attempt to arbitrage the Basel
regulations tend to be more focused on managing the risk in their underlying credit
book. (A good example was CDOs pre-crisis: Basel-focused banks bought AAA
slices as this required little capital and offered an apparently attractive risk-reward;
risk-focused banks questioned whether the asset was AAA in first place.) In other
words, risk-focused banks let the dog wag the tail. We call this biodynamic risk
management in honour of some of the best wines in the world being made
according to some of the strangest beliefs, without recourse to agrochemicals (a
Knightian not Bayesian view of the world).
35
European Banks
Banking
Note: Calculations based on the sample of banks reporting write-downs and credit losses as reported by Bloomberg, excluding US banks (where most
conglomerate losses occurred in off balance sheet vehicles to which Basel capital adequacy did not apply). Write-downs and losses are accumulated from January
2007 until mid-2009. Tier 1 ratios, total assets and common equity are averages of 2006-08 end-of-year data (2007-08 for Japan Tier 1 ratio)
Source: OECD (with data from Bloomberg, DataStream, Worldscope)
The Bank of Englands analysis (Figure 16) is based on a sample of global banks
with assets in excess of $100bn as at the end of 2006, about 100 in all. Not only does
the equity-to-asset ratio appear visually to be a better predictor of failure than the
risk-based Basel ratio, the relationship is also statistically robust. The equity-to-assets
ratio of failed banks was found to be statistically significantly lower (1% significance)
than that of surviving banks (by 1.2% points). For the Basel ratio, the differences
between the ratios of failed and surviving banks is not statistically significantly
different. As Andy Haldane concluded in a speech, regulatory [Basel] capital ratios
do about as well in predicting crises as a coin toss.
36
European Banks
Banking
c. Simplicity
In economics terms, the equity-to-assets ratio is aligned with the theory of the
second best: it is better to be roughly right than precisely wrong. As per the US
Navy design principle of the 1960s, Keep It Simple, Stupid most systems
perform better if their design is kept simpler rather than made complex. We know
that bank models and balance sheets are incredibly complicated. To seek to manage
or regulate this through complexity (the Basel approach) risks compounding the
problem. The equity-to-assets ratio offers simplicity.
The general theorem of the second best optimum states that if there is introduced into a
general equilibrium system a constraint which prevents the attainment of one of the Paretian
conditions, the other Paretian conditions, although still attainable, are, in general, no longer
desirable[It] states that if one of the Paretian optimum conditions cannot be fulfilled a
second best optimum situation is achieved only by departing from all other optimum
conditions.
R. Lipsey and K. Lancaster, The Review of Economic Studies (1956)
Note: Pareto optimum is where resources are allocated such that no
individual can be made better off without making somebody worse off.
d. Accountability
It is easier for outsiders to calculate and assess a banks equity-to-assets ratio than its
Basel risk-weighted capital ratio. This principle of auditability is hugely important, in
our view, if creditors are to have confidence in the banks capital strength. Of
particular concern with Basel is the number of banks stating a Basel III fully-loaded
ratio as a single data point without any supporting data. Combined with RWA
optimisation to achieve it, it is hard to see such a number having credibility.
e. Historical support
Banks managed their capital structure according to simple equity-to-asset ratios for
at least 150 years. In contrast, Basel I was used for 15 years while Basel II lasted for
seven years. We do not claim that it is perfect, but the equity-to-assets ratio has
stood the test of time and offers a long-term data series as a reference point.
37
European Banks
Banking
38
European Banks
Banking
a. History
Banking is a long-term business given very long asset lives and tail risks. It is also a
mature industry dating back at least 700 years. Historical data is therefore a good
starting point.
Data compiled by academics (Figure 17) show how average capital ratios have fallen
for European banks over the last 160 years. Averaging about 30% between 1850 and
1880, the ratio settled at c15% during the interwar period. After 1945, it settled into
a range of c5-6%. Note: these estimates are based on published accounts and do not
adjust for conservative provisioning.
The steady reduction during the 20th century can be attributed to four factors as
noted earlier: increasing diversification of banks as banking consolidated, a lack of
banking crises (unlike the US, there were few in Europe in the 1930s), the
dominance of large banks operating cartel-like structures in many European banking
markets, and the emergence of an implicit government guarantee of deposits. We
would also add the influence of depositor protection schemes.
We would note, however, that managing (and regulating) banks according to capital
levels is a more recent concept. Historically, the prime management (and central
bank) focus was on liquidity ensuring sufficient liquid assets to meet depositors
calls.
39
European Banks
Banking
Note: Unweighted average based on 10 countries: Denmark (1847+), Norway (1851+), Germany (1872+), UK
(1880+), Italy (1891+), Netherlands (1900+), Switzerland (1906+), Spain (1923+), Finland (1934+) and
Belgium (1935+)
Source: Harald Benink and George Benston (2005)
The importance of depositor protection schemes can be seen in the US and Swiss
experience, which we present in Figure 18. The adoption of depositor protection in
the 1930s led to a big reduction in the equity-to-assets ratio as the need to protect
depositors was transferred off balance sheet. The ratio subsequently settled at c6-8%
following the Second World War in both countries. However, subsequent
amendments to depositor protection have seen banks generally hold more capital.
Figure 18. Depositor insurance/preference have a material impact on capital levels
Equity-to-assets ratio, US and Switzerland
a) US (tangible equity)
b) Switzerland (equity)
30%
All Banks
18%
25%
16%
FDIC
established
20%
Priority insurance
introduced
14%
12%
Depositor preference
introduced
15%
Liquidity insurance
introduced
10%
8%
6%
10%
4%
5%
Priority insurance
limits raised
2%
2005
1995
1985
1975
1965
1955
1945
1935
1925
1905
2005
1995
1985
1975
1965
1955
1945
1935
1925
1915
1905
1895
1915
0%
0%
Note: Switzerland All banks includes cantonal, regional/savings, Raiffeisen and other banks as well as the big banks. Since 2005, there are only two
banks in the big bank group; ie UBS and Credit Suisse
Source: Berenberg research, Fed, SNB
40
European Banks
Banking
In the UK, we observe a broad period of stability in the equity-to-assets ratio of c8%
from 1910 to 1970. The variation in the ratio before, during and after this period can
be attributed to a number of factors. The reduction from high teens in the 1880s to
8% by the 1910s was largely attributed to the consolidation of the banking industry
(driven by the adoption of joint stock banking from 1826, which paved the way for
branch-based banking, and limited liability banking from 1856). The lower capital
ratios in the 1940s and 1950s resulted from government control of capital raising,
triggered by the financing needs of the Second World War. All UK companies had
to apply to the Capital Issues Committee, which operated from 1939 to 1959, before
raising capital. High marginal tax rates on dividends in the UK and the introduction
of corporation tax in 1965 increased the attractiveness of debt over equity, leading
banks to issue debt capital instruments. The reduction in the ratio below 6% (as
shown in Figure 19) from the 1980s onwards coincided with the introduction of
deposit insurance in the UK.
Figure 19. Equity-to-assets ratio, UK with and without hidden reserves
18%
Published
16%
True
14%
12%
10%
8%
6%
4%
2%
2000-08
1990-99
1984-89
1970-79
1960-66
1950-59
1940-49
1930-39
1920-29
1910-19
1900-09
1890-99
1880-89
0%
Note: Published = capital ratio as per annual accounts. True = capital ratio including hidden or inner reserves but
not including loan loss provisions. Hidden reserves were disclosed from 1970 onwards
Source: Billings and Capie (2007), OECD, Bank of England
Note: the published capital levels of UK banks were understated due to the practice
of holding hidden reserves. First established in the 1860s, such reserves were
material from the late 1920s until 1970 when the practice ended. The aim was
fascinating.
Capital was considered so important that the British government and the Bank [of
England] accepted the public interest argument which allowed the concealment of true
profits and true capital until1970. The maintenance ofhidden reserves allowed
banks to smooth their reported profits, reassuring depositors and shareholders by presenting
a picture of financial soundness and prudent and public-spirited behaviour, thereby
contributing to financial stability.
M. Billings and F. Capie, Capital in British Banking (2007)
Andrew Haldane, head of Financial Stability at the Bank of England, estimated that
for the worlds largest bank, the [equity-to-assets] ratio needed to guard against
failure in this crisis would have been above 7%.
c. Academic research
A Bank of England Discussion Paper (Optimal bank capital, 2011) argued that
ultimately loss-absorbing capital should be 16-20% of RWA, with considerable
41
European Banks
Banking
stress on the phrase loss-absorbing (ie equity). Assuming average risk weights of
between 33% and 50%, then a 20% equity-to-RWA ratio would imply equity-toassets of 7-10%, in its opinion.
The Bank of England bases its analysis on data from shocks to incomes for a large
number of countries over a long period to assess risks to banks and how equity
funding protects against those risks. As is obvious from the above, the Bank finds
that the amount of equity capital that is likely to be desirable for banks to use is
very much larger than banks have used in recent years and also higher than targets
agreed under the Basel III framework.
The authors (Miles, Yang and Marcheggiano) also share the refrain of Admati and
Hellwig (authors of The Bankers New Clothes) that requiring banks to fund their
balance sheets with more equity and less debt has no effect on lending. As they
succinctly put it: The change that is needed is on the funding side of banks balance
sheets on their liabilities and not their assets. The idea that banks must shrink
lending to satisfy higher requirements on equity funding is a non-sequitur. We
regard it as astonishing how not just the media but the banking industry itself
(including its lobbyists) confuse the issue or deliberately conflagrate it.
European Banks
Banking
Modern and complex group structures tend to obscure this issue but it has become
an important regulatory battlefield giving rise to the issue of Balkanisation; ie
regulators forcing banks to be adequately capitalised (and liquid) within local
subsidiaries. This is both to comply with living will rules and to minimise
reputational damage to a countrys banking system and the need for local taxpayers
to fund foreign banks losses. Recent headlines include moves by US regulators to
ensure this as well as an EC/EBA investigation into moves by BaFin, the German
regulator, to do this.
Banks live globally but die locally.
Mervyn King, Governor, Bank of England
Where banks operate locally through branches, they are coming under pressure from
regulators on both sides of the Atlantic to create local subsidiaries.
There is a continued difficulty of regulating overseas branches operating in the UK. We
ought to have subsidiaries rather than branches in the UK. The vast majority of the
wrongdoing was done outside of the UKs supervisory net.
Hector Sants, ex-CEO, UK FSA (January 2013)
43
European Banks
Banking
44
European Banks
Banking
Assets more not less. Capital is for uncertainty and the uncertainties
over asset values are greatest in a crisis and least in a boom. We therefore
believe in a maximum definition not a minimum in order to cast the
broadest net around a banks exposures and sources of potential losses.
1. Asset adjustments
The following are the key debates for adjusting assets in order to arrive at an assets
figure which most closely reflects the boundaries of the risks faced by a bank.
45
European Banks
Banking
Off balance sheet liabilities to include or not? We say yes. This is one
of the least contentious adjustments. Contingent liabilities or commitments
represent clear liabilities for a bank while the credit or guarantee may not
yet have been drawn down on or invoked, in a crisis it might well be.
Repos to deduct or not? We say no. The bulls argue that repos should
be deducted from assets when calculating an equity-assets ratio given that
these are seen as low-risk transactions. As the crisis showed, however, there
were many unforeseen consequences as the loss of confidence in
counterparties led to a drying-up of liquidity. And this is the whole point of
capital. It is for unexpected losses (ie uncertainty) not expected losses (ie
(measurable) risk). Janet Yellen, Vice-Chairman of the Federal Reserve and
heir apparent to Ben Bernanke, has expressed such concerns.
A major source of unaddressed risk emanates from the large volume of short-term
securities financing transactions repos, reverse repos, securities borrowing and
lending transactions, and margin loans engaged in by broker-dealers...and other
shadow banks. The perfect solution may not yet be clear but possible options are
evident: [including] raising bank and broker-dealer capital.
Janet Yellen, Vice-Chairman, Federal Reserve
2. Equity adjustments
We define equity as capital permanently and instantly available to absorb losses.
Given this, we would make the following comments on potential adjustments.
European Banks
Banking
Subordinated debt. We deduct all. This applies only to BNP Paribas and
Socit Gnrale, which both include a form of sub-debt within equity.
State aid. We deduct all in our stressed measure of capital. This includes
silent participations/participation capital. We exclude this on the grounds
that it lacks permanence. In the case of the Austrians, for example, although
it is perpetual and ranks pari passu with ordinary equity in absorbing
losses, there is a stepped coupon on their participation capital. This
creates an incentive for early repayment as the coupon increases with time
and thus cannot be viewed as core capital. This repayment incentive led
Commerzbank, for example, to launch a 2.5bn rights issue and repay its
silent participations in May 2013.
IAS19. We deduct all in our stressed measure of capital. These refer to the
net pension assets on balance sheet.
Loan loss provisions. Loan losses cover expected losses, while capital is
for unexpected losses. However, some countries have more conservative
provisioning regimes than others and this excess provisioning can be
viewed as a form of capital. Indeed, the original 1988 Basel Accord
acknowledged this point early on. Adding back loan loss provisions gives an
inflated measure of a banks capital. It does, however, make comparison
across jurisdictions more meaningful. In that sense, it is analogous to
EBITDA for industrials.
47
European Banks
Banking
4. Equity-to-assets ratio
In the following section, we include four ratios for European banks:
48
European Banks
Banking
Ratio 3
Risk Weights
+ Tangible Equity
Ratio 2
Pain
('systemic failure')
Ratio 4
Risk Weights
+ Adjusted Tangible Equity
Equity as per B/S
less minorities
less intangibles
less subordinated debt
less state aid
less deferred tax assets
less IAS 19 balances
plus loan loss provisions
Source: Berenberg
49
Simple weights:
0% cash/central bank balances
50% mortgages
100% all other assets
Simple weights:
0% cash/central bank balances
50% mortgages
100% all other assets
European Banks
Banking
50
European Banks
Banking
Figure 22. Significant capital still required to meet Swedish or Japanese scenarios
Scenario analysis for European banks to meet a Swedish or Japanese-style banking crisis
Tangible equity/assets
June 2012
All banks
Domestic
banks
Belgium
Denmark
Germany
Ireland
Greece
Spain
France
Italy
Netherlands
Austria
Portugal
Finland
Sweden
UK
Switzerland
4.6%
4.3%
3.6%
5.9%
n/a
4.4%
4.1%
5.4%
4.1%
6.4%
5.7%
3.6%
4.2%
4.4%
5.4%
3.4%
4.4%
3.6%
7.3%
n/a
4.5%
4.2%
5.4%
4.2%
6.3%
6.1%
6.7%
4.1%
4.7%
6.2%
Average
Total
4.7%
5.1%
Note:
Japan scenario
(Fiscal cost 25% GDP)
Domestic
banks
1,164
933
8,285
1,092
409
4,026
6,903
2,893
2,837
1,189
512
652
1,648
11,354
2,150
554
815
7,806
373
338
3,713
6,661
2,633
2,534
874
394
148
1,640
8,008
1,875
46,047
38,366
Peak NPLs
Loss rate
35%
40%
Banking assets/GDP
All banks
Domestic
banks
3.1x
3.8x
3.1x
6.9x
2.0x
3.8x
3.3x
1.8x
4.7x
3.8x
3.1x
3.3x
4.1x
6.0x
4.6x
3.8x
% loans assets
All banks
Domestic
banks
% GDP
% Bkg
assets
1.5x
3.3x
3.0x
2.3x
1.6x
3.5x
3.2x
1.7x
4.2x
2.8x
2.3x
0.8x
4.0x
4.2x
4.0x
58%
67%
60%
42%
73%
68%
54%
67%
69%
71%
74%
37%
72%
38%
49%
61%
67%
59%
65%
69%
66%
55%
66%
71%
69%
72%
68%
65%
46%
56%
9%
22%
17%
15%
11%
23%
17%
11%
29%
19%
17%
5%
26%
19%
22%
6.0%
6.6%
5.8%
6.4%
6.8%
6.5%
5.4%
6.5%
7.0%
6.8%
7.1%
6.7%
6.4%
4.5%
5.5%
40.7
13.8
25.0
-30.6
10.1
6.5
10.5
8.0
14.6
9.1
5.4
14.9
13.4
9.1
9.5
2.8x
60%
64%
17%
6.2%
10.7
Sweden scenario
Peak NPLs
Loss rate
12%
50%
51
GOP Yrs to
Equity
cover
required*
% GDP
% Bkg
assets
-31
-43
-408
-8
n/a
-184
-279
-107
-146
-30
-16
-4
-87
-222
-41
4%
9%
7%
6%
5%
10%
7%
5%
12%
8%
7%
2%
11%
8%
9%
2.6%
2.8%
2.5%
2.7%
2.9%
2.8%
2.3%
2.8%
3.0%
2.9%
3.0%
2.9%
2.7%
1.9%
2.3%
17.4
5.9
10.7
-13.1
4.3
2.8
4.5
3.4
6.3
3.9
2.3
6.4
5.7
3.9
4.1
-12
-12
-150
6
n/a
-47
-74
-10
-45
4
0
1
-28
-15
17
-115
-1,606
7.5%
2.7%
4.6
-26
-365
GOP Yrs to
Equity
cover
required*
European Banks
Banking
7.4%
6.0%
5.6%
5.4%
5.2%
4.2%
3.3%
0.2%
0.0%
Portugal
Austria
Spain
Ireland
Euro-Area
Finland
Netherlands
Germany
Belgium
France
0.6%
Italy
1.8%
Greece
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
Note: Sample based on 200 largest banks in the Euro-area. Deficit based on individual banks reaching 5% equity-to-assets
ratio. Data based on end-September 2012 balance sheets. Data excludes subsequent capital raising in Greece including
disbursement of ESM monies
Source: OECD
52
European Banks
Banking
3%
4%
5%
6%
7%
8%
Ratio 1
Plain
('idiosyncratic event')
-265
-60
145
351
556
761
Ratio 2
Pain
('systemic failure')
165
458
752
1,046
1,339
1,633
Ratio 3
Risk Weights
+ Tangible Equity
-78
186
450
714
978
1,242
Ratio 4
Risk Weights
+ Adjusted Tangible Equity
-157
108
373
638
904
1,169
53
UK
-4
84
173
261
349
437
European Banks
Banking
1%
2%
3%
4%
5%
6%
7%
8%
VONN
BAER
CITI
STAN
RBI
'Pain' ratios
GS
DNB
SWEDA
'Plain' ratios
KBC
HSBA
BAC
BBVA
RBS
MS
ISP
JPMC
EBS
UCG
SHBA
INGA
EFGN
LLOY
NDA
SEB
UBSN
DANSKE
BARC
BNP
CBK
SAN
GLE
DBK
CSGN
ACA
Note: Commerzbank pain ratio increases from 2.2% to 2.5% post rights issue
Source: Berenberg research, company data
54
9%
European Banks
Banking
Figure 27. Few banks exceed 6% on our plain ratio (idiosyncratic risk basis)
Equity-to-assets pain versus plain ratio, individual European banks, 31/12/12
(Left hand of bar = pain ratio; right hand of bar = plain ratio; ranked by plain ratio)
0%
1%
2%
3%
4%
5%
6%
CITI
GS
VONN
RBI
BAC
MS
STAN
JPMC
BAER
RBS
KBC
BBVA
ISP
DNB
UCG
HSBA
SWEDA
EBS
UBSN
LLOY
BARC
INGA
SHBA
NDA
CBK
EFGN
SAN
SEB
BNP
DANSKE
GLE
DBK
CSGN
ACA
Note: Commerzbank pain ratio increases from 2.2% to 2.5% post rights issue
Source: Berenberg research, company data
55
7%
8%
9%
European Banks
Banking
Figure 28. Very few banks exceed the 4% pain ratio threshold (systemic crisis basis)
Equity-to-assets pain versus plain ratio, individual European banks, 31/12/12
(Left hand of bar = pain ratio; right hand of bar = plain ratio; ranked by pain ratio)
0%
1%
2%
3%
4%
5%
6%
VONN
BAER
STAN
SWEDA
DNB
HSBA
EFGN
SHBA
INGA
EBS
RBI
KBC
NDA
DANSKE
LLOY
GS
SEB
BBVA
ISP
CITI
RBS
BNP
UBSN
BARC
UCG
JPMC
CBK
GLE
BAC
MS
SAN
DBK
ACA
CSGN
Note: Commerzbank pain ratio increases from 2.2% to 2.5% post rights issue
Source: Berenberg research, company data
56
7%
8%
9%
European Banks
Banking
Figure 29. Banks with liquid balance sheets also typically have stronger capital ratios
Liquidity ratios cash and central bank balances as % assets, selected banks, 31/12/12
0%
5%
10%
15%
DNB
SHBA
STAN
SAN
DBK
LLOY
SEB
RBS
BARC
UBSN
SWEDA
CSGN
BBVA
BNP
GLE
NDA
HSBA
EBS
RBI
DANSKE
ACA
CBK
INGA
KBC
UCG
ISP
VONN
BAER
EFGN
GS
BAC
CITI
MS
JPMC
57
20%
European Banks
Banking
Figure 30. Capital ratios at some banks are very sensitive to Level 3 valuation
Tangible-equity-to-tangible-assets ratio sensitivity to Level 3 valuations, individual banks, 31/12/12
Level 3 Assets
as % Tangible Equity
Barclays
49%
BBVA
4%
BNP Paribas
42%
BoA
26%
Citi
15%
Commerzbank
13%
Credit Agricole
16%
Credit Suisse
133%
Danske Bank
16%
Deutsche Bank
96%
DNB
114%
EFG International
14%
Erste
3%
Goldman Sachs
76%
Handelsbanken
2%
HSBC
11%
ING
11%
Intesa
8%
JP Morgan
62%
Julius Baer
0%
KBC
40%
Lloyds
10%
Morgan Stanley
55%
Nordea
14%
Raiffeisen
1%
RBS
19%
Santander
3%
SEB
13%
SocGen
18%
Standard Chartered
13%
Swedbank
0%
UBS
37%
Unicredit
23%
Vontobel
0%
Note: Tangible equity defined as reported equity less minorities and intangibles. Tangible assets defined as reported balance sheet assets less intangible assets
and with derivatives netted off
Source: Berenberg research, company data
58
European Banks
Banking
Figure 31. Capital generation is most sensitive to the cost of risk but also costs
Capital generation relative to assets sensitivity to key performance metrics (2013 estimates)
Key Performance Metrics
NIM Costs/ATA LLC/ATA RoA
Barclays
BBVA
BNP
Commerzbank
Credit Agricole
Credit Suisse
Danske Bank
Deutsche Bank
DNB
EFG International
Erste
Handelsbanken
HSBC
Intesa
Julius Baer
KBC
Lloyds
Nordea
Raiffeisen
RBS
Santander
SEB
SocGen
Standard Chartered
Swedbank
UBS
Unicredit
Vontobel
Weighted Average
Simple Average
0.80%
2.49%
1.09%
0.86%
0.72%
0.36%
0.99%
0.73%
1.22%
1.06%
2.30%
1.09%
1.35%
1.44%
0.86%
1.64%
1.16%
0.84%
2.42%
0.88%
2.37%
0.72%
0.93%
1.68%
1.12%
0.50%
1.55%
0.28%
1.09%
1.19%
1.27%
1.77%
1.25%
1.13%
0.64%
1.16%
0.78%
1.29%
0.91%
2.56%
1.91%
0.66%
1.44%
1.35%
2.80%
1.59%
1.08%
0.77%
2.37%
1.10%
1.63%
0.89%
1.28%
1.63%
0.86%
1.96%
1.62%
2.85%
1.27%
1.45%
0.22%
0.87%
0.21%
0.26%
0.16%
0.01%
0.23%
0.08%
0.15%
0.00%
0.84%
0.07%
0.22%
0.65%
0.00%
0.41%
0.56%
0.13%
0.73%
0.41%
0.95%
0.04%
0.28%
0.21%
0.02%
0.01%
0.78%
0.00%
0.30%
0.30%
0.23%
0.85%
0.27%
0.05%
0.12%
0.17%
0.25%
0.12%
0.59%
0.54%
0.28%
0.57%
1.19%
0.30%
0.60%
0.60%
0.04%
0.48%
0.29%
0.04%
0.45%
0.50%
0.23%
0.82%
0.80%
0.15%
0.13%
0.58%
0.34%
0.40%
Note: For simplicity, 30% tax rate assumed for all banks except calculation of LLC sensitivity of Intesa and Unicredit as LLC are not tax
deductible
Source: Berenberg research, company data
59
European Banks
Banking
Total Europe
Euro-Zone
1,000
800
600
400
200
0
2009
2010
2011
2012
2013e
2014e
2015e
In order to make good the capital deficit identified above, banks have the option of
permanent or contingent capital combined with an unspecified time period. We also
discuss the incentives required to encourage compliance.
a. Permanent capital
Classically, banks can either raise fresh equity (eg accelerated book-build or rights
issue) or retain earnings. The impact of retained earnings can be boosted by reducing
or passing the dividend and/or generating capital gains through disposing of assets
(whole businesses or equity stakes).
However, banks, especially Eurozone banks, will struggle to make good their deficits
through retained earnings. As can be seen in Figure 33, the listed European banks
under our coverage are expected to generate 80bn of net income (ie before
dividends) in 2013, of which 30bn comes from Eurozone banks. As noted in
Figure 31, de-costing and de-risking the balance sheet can boost capital generation
relative to assets by c15bp on average.
Note: while the listed banks that we cover do not represent the whole European
sector (there are also the small listed and the unlisted banks), our coverage accounts
for 51% of all Eurozone banks by revenues and 65% of all EU27 banks by revenues.
More importantly, they accounted for all of the net income in their respective
geographies in 2011 and 2012!
60
European Banks
Banking
Figure 33. Retained earnings will take years to make good the deficit
Net income aggregate of listed European and Eurozone banks (bn)
120
Total Europe
Euro-Zone
100
80
60
40
20
0
2009
2010
2011
2012
2013e
2014e
2015e
For investment banks, one option to rebuild capital bases quickly is to retain
employee bonuses. We discussed such an instrument Capital Adequacy Buffer
Securities (CABS) in Investment Banks: Time to change the model, 20 July 2012.
A more contentious option is to shrink the balance sheet through running down or
selling the loan book. Unpopular with politicians, it is arguably inevitable given the
end of the debt cycle and planned deleveraging by the private sector. Note also, as
some have pointed out (eg Admati and Hellwig), that capital is a financing decision
and in theory should not affect the asset side of the balance sheet. Only marginally
profitable business may be affected by a change in the funding mix.
Another option used by many banks to meet Basel capital ratios is RWA
optimisation, but this is not an option with an unweighted equity-to-assets ratio by
definition. Figure 34 highlights changes in the average risk weight (RWA/assets) for
the major European banks since Q1 2011; ie just before the EBAs infamous stress
test. We note the following.
Average decrease in average risk weights over the last two years is 5.5%
points on a simple basis and 3.5% points on a weighted basis.
Banks least likely to optimise their RWA were the Swiss banks (where
average risk weights typically increased) and the UK banks. Both the Swiss
and the UK regulators have been at the forefront of over-riding the riskweight process.
Banks most likely to optimise their RWA were banks in the periphery
specifically Italy, Spain, Portugal and Ireland.
61
European Banks
Banking
Figure 34. Hmmmthe bigger the pressure on capital, the bigger the drop
in average risk weights
Average risk weights change Q1 2011 to date, European banks (top 50 listed)
-30%
-20%
-10%
0%
10%
20%
Credit Suisse
UBS
RBS
St. Galler KB
Walliser KB
Standard Chartered
Berner KB
BNP
Barclays
Luzerner KB
Deutsche Bank
Pohjola
Deutsche Postbank
Mediobanca
HSBC
CIC
KBC
DNB
Handelsbanken
Unicredit
Santander
Commerzbank
Julius Baer
Komercn banka
SocGen
st. Volksbanken
Raiffeisen
Danske Bank
BBVA
Credit Agricole
Swedbank
BCV
Lloyds
Erste
Monte dei Paschi
Nordea
Intesa
Natixis
BPER
BoI
SEB
AIB
Sabadell
BES
CaixaBank
Bankinter
UBI
Banco Popular
Banco de Valencia
Banco Popolare
Note: Average risk weight defined as RWA as % total assets on balance sheet
Source: Berenberg research, SNL
b. Contingent capital
Contingent capital is defined as capital not currently on the banks balance sheet but
available at the banks discretion and/or subject to certain criteria being met. To be
effective, the market (and regulator) must believe in its availability.
62
European Banks
Banking
Contingent Convertibles (CoCos) are one form where debt is converted to equity
subject to certain conditions. We have been critical of these from their inception.
CoCos suffer from a time consistency problem at the point that they need to be
triggered, they are unlikely to be triggered as management fears the consequences of
the trigger. The problems with the trigger are both the level and defining if it has
happened. In some cases, the trigger is based on a CT1 capital ratio below 7%,
which under Basel III is where dividend and bonus payments are restricted and a
bank would be perceived as being in increasingly severe difficulty. Defining the
trigger is also fraught: accounting triggers suffer from the timeliness of the
accounting data; market-based triggers can be affected by volatility and manipulated;
while regulatory triggers are potentially ad hoc in nature and thus uncertain.
We have in mind three other instruments, one proposed and two historical.
Reserved liability. The UKs Joint Stock Bank Act of 1879 introduced the
concept of reserved liability to address the perceived disadvantages of the
then prevalent unlimited liability. The influential banker George Rae
(Chairman of the North and South Wales Bank) persuaded the government
to adopt a system of reserved liability, whereby any capital not called up
was divided between shares on call at the discretion of the banks directors
and reserve share capital which could only be called in the event of
bankruptcy. In other words, share capital not called up or fully paid.
Reserved liability remained in use in the UK at least into the 1930s. In 1934,
Midland Banks share capital was divided into 12 par stock, of which 2.50
was paid in, 2.50 was callable and 7 was a reserve liability of
shareholders to creditors. Was it effective? We note its use in the UK
coincided with the 100-year absence of financial crises (defined as a threat to
the payments system) between 1866 and the early 1970s.
63
European Banks
Banking
In event of the property and assets of the bank being insufficient to pay its debts
and liabilities, each shareholder of the bank shall be liable for the deficiency to an
amount equal to the par value of the shares held by him, in addition to any
amount not paid up on such shares.
Bank Act of 1871, Canada
c. Time period
The time period over which banks can make good any deficit identified is perhaps as
important as the means by which any deficit is filled. If banks had to do so within
one year, it would clearly place enormous strain on the system. If banks were
allowed 10 years, it would lack credibility given the likely reoccurrence of the next
crisis. The answer lies somewhere in between and will vary depending on whether
capital is permanent or contingent.
d. Incentives
We have long argued that bank regulation should be based around incentives not
rules (see European Banks: Mad, bad and dangerous to know, 28 January 2013). Banks will
always game rules, but the right incentives should in theory align bank behaviour
with that desired by their stakeholders. Possible incentive reforms we have discussed
in the past include:
setting a high minimum dividend payout ratio to stop banks growing and
therefore taking on risk;
for investment banks, dividend decisions should be taken at the same time
as variable compensation decisions so that the two are balanced;
less frequent reporting of results (the EC has recently announced that all
corporates can drop quarterly reporting from 2015. Banks take note!);
Writing in the Financial Times, a Harvard law professor (Mark Roe) proposed
changing the tax treatment of debt. (In most jurisdictions, interest payments on debt
for all corporates, including banks, are tax deductible.) With debt taxed more and
equity taxed less by such a reform, the incentives inside big banks would better align
with Brown-Vitter, where Brown-Vitters bill in the US argues that banks should
hold much more capital to absorb losses and have less risky debt. As noted earlier,
the reduction in equity ratios in the UK through the 1970s coincided with the
introduction of corporation tax in the mid-1960s, which effectively made debt
financing cheaper relative to equity. Clearly this would affect retail deposits as well as
wholesale debt, but given current interest rates on deposit products are so low, the
impact would be minimal.
European Banks
Banking
strategy.
European Banks
Banking
was ranked the 13th strongest bank in the July 2011 stress test, months
before it failed). The ECBs motivation is to understand what risks it is
taking on when it becomes the single supervisor in the Eurozone.
We cannot stress enough the significance of the EBA/ECB balance sheet
audits. As we argued in a recent note (European Banks: Europe the final
countdown, 20 May 2013), this could be Europes Japanese moment. As
shown in Figure 35, Japans Takenaka plan (where banks were forced to
come clean about the state of their balance sheets and to recapitalise them)
marked the end of a 10-year bear market in banks. See UK Banks: Financial
repression to bear on the sector, 29 February 2012, for more detail of the plan.
Figure 35. I think Im turning Japanese, I really think so.
Share price performance banks versus market, Japan (actual) versus Europe (2005
rebased to 1993)
120
Japan
Europe
110
100
90
Takenaka plan announced
80
70
60
50
40
30
20
93
95
97
99
01
03
05
07
09
11
13
Banks must repair their balance sheets. This has two implications:
recognition of the true value of assets and ensuring the provision of
adequate capital within the liability structure of a bank.
66
European Banks
Banking
While we have been negative on European banks overall, some of our biggest
concerns have been with the Eurozone banks. In contrast, we have been very
positive on the Nordic banks as well as more broadly a group of banks we have
identified as long-term winners (ING, KBC, HSBC, UBS, Swedbank and
Handelsbanken).
As we note in the introduction to this report, Eurozone banks have been weak
performers in the nine months following OMT. In absolute terms, they are now
back to levels reached on 11 September 2012 in the immediate aftermath of the
OMT euphoria. Relative to the broader Eurozone market, banks are now below the
level reached on 5 September, the day OMT was announced. Looking back over the
last 40 years, in relative terms Eurozone banks have only been lower than they are
today during May, June and July last year and April this year. Bar the depths of last
Julys meltdown, the relative is only 10% off the lowest it has ever been in 40
years!
In contrast, Nordic banks have increased in absolute terms and outperformed both
the sector and the market over one-, three-, six- and 12-month periods.
Timing: the structural issues that the team are talking about may not
materialise for a long time. What should I do in the short term?
In the past, we have advocated a barbell strategy. The safe end of the barbell would
be made up of our long-term winners (ING, KBC, HSBC, UBS, Swedbank and
Handelsbanken) which are characterised as managing for secular decline and having
relatively strong balance sheets. The other end of the barbell would include the
better-quality Eurozone banks such as Intesa, BBVA and BNP (note: all Sell-rated).
The government will want to support the Eurozone recovery and will
therefore not put pressure on banks to raise capital. The conclusions of the
ECBs balance sheet review will be watered down.
Political interference is a major risk to our view. But as both the ECB and
German/Dutch finance ministers have finally realised, until bank balance sheets
have been cleaned up, bank lending will remain constrained. It took the Japanese
authorities until 2002 to realise this, leading to the lost decade.
That said, the ultimate problem is one of demand, in our view the end of a 70-year
debt cycle will be characterised by weak loan growth regardless of banks propensity
to lend.
European Banks
Banking
What stocks would you own if you were more positive on the macro
environment in Europe?
Post the current correction, the rotation out of bonds into equities and from
defensives into riskier names will resume. In this environment, you must own
banks.
This is broadly similar to the point above. The current correction in the market has
been attributed to the rapid rise in real interest rates leading to volatility in the
pricing of a wide range of financial assets. The bull case runs that higher real rates
reflect positive expectations for economic growth. This in turn would reduce loan
loss assumptions for banks and therefore lead to a rapid increase in consensus
estimates.
Note that over the very long-term 30+ years the performance and returns of
banks are negatively correlated with the level of interest rates, reflecting the bondlike characteristics of a banks balance sheet.
Note also that to sustain the current valuation of many European banks, you need
earnings to increase and lower loan loss charges are the most realistic driver.
Capital: regulators arent worried about it; management arent worried about
it; why should I worry about it?
This argument was valid in 2006 and 2007. More seriously, we would note that
regulators and politicians are beginning to worry. We note comments in the last
month from the German/Dutch finance ministers and especially from the ECB
which all suggest that the prime concern has become the quality of bank balance
sheets, for which read capital levels.
68
European Banks
Banking
Valuation
Figure 36. European bank valuation earnings
Printed
11 Jun 13
Benelux
ING
KBC
Price
Consensus EPS
2013E
2014E
2015E
EPS Growth
12E/13E 13E/14E 14E/15E
Consensus P/E
2013E
2014E
2015E
2013E
DPS
2014E
2015E
2013E
Yield
2014E
6.99
30.9
1.00
3.55
1.12
4.02
1.16
4.28
4%
6%
11%
13%
4%
6%
7.0x
8.7x
6.3x
7.7x
6.0x
7.2x
0.02
0.08
0.16
0.66
0.31
1.01
0.3%
0.3%
2.2%
2.1%
23.8
3722
172
36.8
5080
25.4
97.8
2.01
321
10.1
2.55
538
3.05
16.86
2.81
335
10.9
2.92
615
3.85
18.19
3.30
358
12.1
3.25
786
4.54
20.61
40%
-10%
-9%
-16%
12%
-13%
8%
40%
5%
8%
15%
14%
26%
8%
17%
7%
11%
11%
28%
18%
13%
11.8x
11.6x
17.0x
14.4x
9.4x
8.3x
0.2x
8.5x
11.1x
15.7x
12.6x
8.3x
6.6x
0.2x
7.2x
10.4x
14.1x
11.3x
6.5x
5.6x
0.1x
0.51
223
7.86
1.42
155
1.00
3.37
0.70
237
8.48
1.54
220
1.06
3.60
0.86
243
9.68
1.82
252
1.26
3.98
2.1%
6.0%
4.6%
3.9%
3.1%
3.9%
nm
2.9%
6.4%
4.9%
4.2%
4.3%
4.2%
nm
France
BNP Paribas
Credit Agricole
Natixis
Societe Generale
43.9
7.01
3.49
29.7
4.73
0.93
0.32
3.23
5.42
1.15
0.37
4.16
6.31
1.32
0.41
5.00
-15%
47%
5%
11%
15%
24%
17%
29%
16%
15%
11%
20%
9.3x
7.6x
11.0x
9.2x
8.1x
6.1x
9.4x
7.1x
7.0x
5.3x
8.5x
5.9x
1.72
0.28
0.14
0.94
2.07
0.32
0.20
1.50
2.44
0.41
0.18
1.90
3.9%
3.9%
4.0%
3.2%
4.7%
4.5%
5.6%
5.0%
Germany
Commerzbank
Deutsche Bank
7.59
36.2
0.50
4.07
0.90
4.77
1.25
5.82
-48%
13%
80%
17%
40%
22%
15.3x
8.9x
8.5x
7.6x
6.1x
6.2x
0.00
0.82
0.07
1.06
0.37
1.46
0.0%
2.3%
1.0%
2.9%
Italy
Banca Monte Paschi Siena
Banca Popolare di Milano
Banco Popolare
Intesa Sanpaolo
Mediobanca
UBI Banca
Unicredit
0.23
0.40
1.05
1.36
4.96
3.17
3.99
-0.02
0.02
0.09
0.11
0.31
0.16
0.19
0.01
0.04
0.15
0.14
0.57
0.29
0.37
0.02
0.05
0.21
0.18
0.65
0.39
0.55
-33%
15%
nm
-13%
-41%
-25%
-4%
nm
74%
64%
37%
83%
87%
93%
156%
30%
33%
23%
14%
32%
49%
nm
17.2x
11.2x
13.0x
15.9x
20.2x
20.8x
25.2x
9.9x
6.8x
9.5x
8.7x
10.8x
10.8x
9.9x
7.6x
5.1x
7.7x
7.6x
8.2x
7.2x
0.00
0.01
0.02
0.05
0.08
0.06
0.08
0.00
0.01
0.04
0.07
0.19
0.10
0.13
0.00
0.02
0.06
0.09
0.22
0.14
0.18
0.0%
1.8%
1.8%
3.7%
1.6%
1.9%
2.1%
0.4%
3.5%
3.9%
4.8%
3.7%
3.2%
3.1%
Portugal
Millennium BCP
Banco Espirito Santo
Banco BPI
0.10
0.72
0.97
-0.02
0.00
0.07
0.00
0.06
0.10
0.02
0.12
0.14
-75%
nm
-27%
nm
nm
37%
350%
83%
43%
nm
nm
13.3x
25.0x
11.3x
9.7x
5.6x
6.2x
6.8x
0.00
0.00
0.00
0.00
0.01
0.00
0.00
0.02
0.00
1.0%
0.1%
0.2%
1.0%
1.8%
0.4%
113.5
92.0
225.5
79.1
12.3
67.8
51.3
284.2
152.8
8.75
9.25
21.0
0.82
1.07
5.82
6.17
21.6
13.3
12.2
10.46
25.5
0.91
1.15
6.26
6.74
22.9
14.2
14.2
11.19
28.6
0.99
1.24
6.68
6.89
24.3
14.9
60%
11%
90%
9%
-23%
9%
18%
1%
9%
39%
13%
21%
12%
7%
8%
9%
6%
7%
16%
7%
12%
8%
8%
7%
2%
6%
5%
13.0x
9.9x
10.7x
11.1x
11.5x
11.6x
8.3x
13.2x
11.5x
9.3x
8.8x
8.9x
9.9x
10.7x
10.8x
7.6x
12.4x
10.8x
8.0x
8.2x
7.9x
9.2x
9.9x
10.2x
7.4x
11.7x
10.2x
2.27
2.15
0.00
0.41
0.56
3.09
1.56
11.4
10.13
4.35
2.46
0.00
0.48
0.60
3.32
1.73
12.1
10.64
5.50
3.69
0.00
0.51
0.65
3.54
1.96
12.9
11.13
2.0%
2.3%
0.0%
4.5%
4.5%
4.6%
3.0%
4.0%
6.6%
3.8%
2.7%
0.0%
5.2%
4.8%
4.9%
3.4%
4.3%
7.0%
Spain
Bankinter
BBVA
Banco de Sabadell
Banco Popular
Banesto
Caixabank
Santander
2.85
6.94
1.40
0.63
3.51
2.67
5.41
0.20
0.70
0.08
0.02
0.38
0.10
0.49
0.26
0.81
0.17
0.07
0.53
0.28
0.60
0.31
0.97
0.23
0.09
0.67
0.36
0.70
44%
80%
160%
nm
nm
870%
35%
27%
16%
115%
360%
39%
184%
24%
20%
19%
38%
29%
26%
29%
16%
14.2x
9.9x
17.9x
nm
9.2x
27.5x
11.1x
11.1x
8.5x
8.3x
9.1x
6.6x
9.7x
9.0x
9.3x
7.2x
6.0x
7.1x
5.2x
7.5x
7.7x
0.09
0.42
0.03
0.00
0.13
0.21
0.57
0.11
0.41
0.07
0.03
0.22
0.20
0.52
0.14
0.45
0.09
0.04
0.30
0.21
0.54
3.2%
6.0%
2.3%
0.6%
3.7%
7.8%
10.5%
4.0%
6.0%
4.8%
5.2%
6.3%
7.3%
9.6%
Switzerland
BCV
Credit Suisse
EFG International
Julius Baer
UBS
Vontobel
477
27.1
11.45
37.0
16.9
29.5
33.4
2.57
1.00
2.15
0.97
2.30
34.1
2.98
1.11
2.76
1.29
2.68
36.2
3.30
1.33
3.45
1.67
2.99
-4%
45%
31%
3%
30%
14%
2%
16%
11%
28%
32%
17%
6%
11%
20%
25%
29%
11%
14.3x
10.5x
11.5x
17.2x
17.3x
12.8x
14.0x
9.1x
10.4x
13.4x
13.1x
11.0x
13.2x
8.2x
8.6x
10.7x
10.1x
9.8x
32.8
0.84
0.18
0.61
0.24
1.29
33.6
1.13
0.33
0.69
0.53
1.43
33.8
1.34
0.51
0.97
1.18
1.59
6.9%
3.1%
1.6%
1.6%
1.4%
4.4%
7.0%
4.2%
2.9%
1.9%
3.1%
4.8%
Turkey
Akbank
Garanti Bank
Turkiye Is Bankasi
Yapi Kredi
8.14
8.50
5.90
4.84
0.84
0.88
0.75
0.58
0.89
0.93
0.77
0.61
1.01
1.04
0.84
0.71
23%
12%
11%
28%
6%
7%
3%
6%
14%
12%
9%
16%
9.7x
9.7x
7.9x
8.4x
9.2x
9.1x
7.7x
7.9x
8.1x
8.1x
7.0x
6.8x
0.21
0.21
0.16
0.07
0.25
0.24
0.18
0.06
0.29
0.28
0.20
0.07
2.5%
2.5%
2.7%
1.5%
3.1%
2.8%
3.0%
1.3%
UK & Ireland
Barclays
HSBC
Lloyds
RBS
Standard Chartered
Bank of Ireland
309
700
61.6
334.0
1480
0.171
36.6
98
4.57
21.62
232
-0.02
43.9
108
5.88
31.06
252
0.00
51.2
120
6.84
37.31
274
0.01
3%
9%
80%
33%
8%
-66%
20%
10%
29%
44%
9%
nm
17%
10%
16%
20%
9%
250%
8.4x
11.0x
13.5x
15.4x
9.9x
nm
7.0x
10.0x
10.5x
10.8x
9.1x
nm
6.0x
9.1x
9.0x
9.0x
8.4x
12.2x
7.31
52.1
0.11
0.05
91.90
0.00
9.68
57.8
1.09
1.54
100.50
0.00
13.64
65.9
2.31
7.25
110.50
0.00
2.4%
4.8%
0.2%
0.0%
4.0%
0.0%
3.1%
5.3%
1.8%
0.5%
4.4%
0.0%
Scandinavia
Danske
DNB
Jyske Bank
Nordea
Pohjola
SEB
Sparebank 1 SR
Svenska Handelsbanken
Swedbank
69
European Banks
Banking
Consensus BVPS
2013E
2014E
Consensus P/BV
2013E
2014E
Consensus TBVPS
2013E
2014E
TBVPS Growth
12E/13E 13E/14E
Consensus P/TBV
2013E
2014E
RoE
2013E
2014E
RoTE
2013E
2014E
14.35
31.08
14.99
33.97
0.49x
0.99x
0.47x
0.91x
13.26
29.15
13.90
30.60
8%
15%
5%
5%
0.53x
1.06x
0.50x
1.01x
7.2%
11.8%
7.6%
12.4%
7.9%
13.1%
8.2%
13.5%
30.1
2620
90.4
20.7
6061
42.3
85.22
32.1
2711
93.0
22.1
6590
45.0
100.10
0.79x
1.42x
1.90x
1.78x
0.84x
0.60x
0.04x
0.74x
1.37x
1.84x
1.66x
0.77x
0.57x
0.03x
22.5
2494
88.3
19.8
5121
36.3
2.89
24.4
2589
92.3
21.3
5484
38.2
3.44
7%
8%
6%
9%
11%
0%
21%
9%
4%
4%
8%
7%
5%
19%
1.06x
1.49x
1.94x
1.86x
0.99x
0.70x
1.05x
0.98x
1.44x
1.86x
1.73x
0.93x
0.66x
0.88x
7.0%
12.9%
11.3%
12.6%
9.2%
7.3%
21.6%
9.0%
12.6%
11.9%
13.6%
9.7%
8.8%
19.6%
9.3%
13.4%
11.8%
13.4%
11.1%
8.4%
nm
12.0%
13.2%
12.1%
14.2%
11.6%
10.3%
nm
65.2
16.6
5.63
60.2
68.0
17.4
5.85
62.6
0.67x
0.42x
0.62x
0.49x
0.65x
0.40x
0.60x
0.47x
54.8
10.4
4.86
49.2
58.3
11.3
5.02
52.1
8%
4%
4%
3%
7%
9%
3%
6%
0.80x
0.67x
0.72x
0.60x
0.75x
0.62x
0.70x
0.57x
7.5%
5.8%
5.6%
5.5%
8.1%
6.8%
6.5%
6.8%
9.0%
9.1%
6.6%
6.7%
9.6%
10.6%
7.5%
8.2%
23.95
58.0
24.23
61.5
0.32x
0.62x
0.31x
0.59x
21.63
45.7
20.80
48.5
-23%
2%
-4%
6%
0.35x
0.79x
0.36x
0.75x
1.8%
7.0%
3.7%
8.0%
2.0%
9.0%
4.2%
10.1%
Italy
Banca Monte Paschi Siena
Banca Popolare di Milano
Banco Popolare
Intesa Sanpaolo
Mediobanca
UBI Banca
Unicredit
0.56
1.05
4.71
2.93
7.96
10.4
10.3
0.61
1.11
4.82
3.00
8.45
10.7
10.5
0.40x
0.38x
0.22x
0.46x
0.62x
0.30x
0.39x
0.37x
0.36x
0.22x
0.45x
0.59x
0.30x
0.38x
0.50
1.00
3.72
2.22
7.57
7.75
8.38
0.48
1.07
3.84
2.29
8.06
7.92
8.6
-26%
-10%
-1%
3%
5%
6%
1%
-5%
7%
3%
3%
6%
2%
2%
0.45x
0.40x
0.28x
0.61x
0.65x
0.41x
0.48x
0.47x
0.37x
0.27x
0.59x
0.61x
0.40x
0.47x
nm
2.1%
1.9%
3.6%
4.0%
1.5%
1.8%
1.5%
3.7%
3.2%
4.9%
7.0%
2.8%
3.6%
nm
2.2%
2.5%
4.8%
4.2%
2.1%
2.3%
1.8%
3.9%
4.1%
6.4%
7.3%
3.7%
4.4%
Portugal
Millennium BCP
Banco Espirito Santo
Banco BPI
0.14
1.56
1.33
0.15
1.73
1.47
0.71x
0.46x
0.73x
0.68x
0.42x
0.66x
0.14
1.59
1.41
0.15
1.64
1.58
-18%
2%
1%
4%
3%
12%
0.71x
0.45x
0.69x
0.69x
0.44x
0.62x
nm
nm
5.9%
2.8%
3.9%
7.2%
nm
nm
5.2%
2.8%
4.0%
6.7%
Scandinavia
Danske
DNB
Jyske Bank
Nordea
Pohjola
SEB
Sparebank 1 SR
Svenska Handelsbanken
Swedbank
144
85.0
242
7.35
9.21
52.5
54.4
174
96.3
153
93.4
265
7.80
9.78
55.6
59.8
184
99.7
0.79x
1.08x
0.93x
1.23x
1.34x
1.29x
0.94x
1.63x
1.59x
0.74x
0.99x
0.85x
1.16x
1.26x
1.22x
0.86x
1.54x
1.53x
125
81.8
238
6.53
6.31
46.1
53.6
164
85.5
134
90.2
261
6.97
6.94
49.2
59.1
174
88.4
6%
10%
10%
6%
11%
1%
13%
9%
4%
7%
10%
10%
7%
10%
7%
10%
6%
3%
0.91x
1.13x
0.95x
1.39x
1.95x
1.47x
0.96x
1.74x
1.79x
0.85x
1.02x
0.86x
1.30x
1.78x
1.38x
0.87x
1.63x
1.73x
6.2%
11.4%
9.1%
11.4%
12.3%
11.1%
12.0%
12.8%
14.0%
8.2%
11.7%
10.0%
12.0%
12.1%
11.6%
11.8%
12.8%
14.5%
7.2%
11.9%
9.3%
12.9%
17.9%
12.7%
12.2%
13.8%
15.9%
9.4%
12.2%
10.2%
13.5%
17.3%
13.2%
11.9%
13.6%
16.3%
Spain
Bankinter
BBVA
Banco de Sabadell
Banco Popular
Banesto
Caixabank
Santander
3.70
7.96
2.80
1.06
7.18
4.36
6.94
3.82
8.43
2.87
1.12
7.31
4.38
7.1
0.77x
0.87x
0.50x
0.59x
0.49x
0.61x
0.78x
0.75x
0.82x
0.49x
0.57x
0.48x
0.61x
0.77x
3.46
6.44
2.41
0.84
7.04
3.77
4.70
3.48
6.90
2.47
0.91
7.36
3.83
4.86
7%
9%
-4%
-16%
0%
-10%
-5%
0%
7%
3%
8%
5%
2%
3%
0.82x
1.08x
0.58x
0.75x
0.50x
0.71x
1.15x
0.82x
1.01x
0.57x
0.69x
0.48x
0.70x
1.11x
5.6%
9.1%
2.7%
1.3%
5.3%
2.2%
6.9%
6.8%
9.9%
5.9%
6.3%
7.3%
6.3%
8.6%
6.0%
11.3%
3.2%
1.6%
5.4%
2.4%
10.1%
7.4%
12.2%
6.9%
7.9%
7.4%
7.2%
12.6%
Switzerland
BCV
Credit Suisse
EFG International
Julius Baer
UBS
Vontobel
388
27.0
9.40
22.7
12.7
25.2
391
29.1
10.26
23.7
13.5
26.4
1.23x
1.00x
1.22x
1.63x
1.32x
1.17x
1.22x
0.93x
1.12x
1.56x
1.25x
1.12x
386
21.5
6.72
12.1
11.2
23.4
390
23.5
7.59
13.0
11.9
24.4
2%
2%
8%
-8%
-4%
8%
1%
9%
13%
8%
7%
4%
1.23x
1.26x
1.70x
nm
1.51x
1.26x
1.22x
1.16x
1.51x
2.84x
1.42x
1.21x
8.6%
9.6%
11.6%
9.5%
7.6%
9.4%
8.7%
10.6%
11.3%
11.9%
9.8%
10.4%
8.7%
12.1%
15.3%
17.1%
8.6%
10.2%
8.8%
13.2%
15.5%
22.0%
11.2%
11.2%
Turkey
Akbank
Garanti Bank
Turkiye Is Bankasi
Yapi Kredi
6.00
5.67
5.58
4.08
6.65
6.34
6.15
4.71
1.36x
1.50x
1.06x
1.19x
1.22x
1.34x
0.96x
1.03x
6.00
5.73
5.55
3.87
6.66
6.41
6.17
4.42
17%
17%
20%
22%
11%
12%
11%
14%
1.36x
1.48x
1.06x
1.25x
1.22x
1.33x
0.96x
1.09x
15.0%
16.5%
14.7%
15.5%
14.1%
15.5%
13.1%
13.9%
15.0%
16.5%
14.7%
16.4%
14.0%
15.4%
13.2%
14.7%
423
975
62.5
570.2
1930.4
0.21
450
1028
66.0
591.1
2087.1
0.22
0.73x
1.11x
0.99x
0.59x
1.19x
0.81x
0.69x
1.06x
0.93x
0.57x
1.10x
0.78x
368
825
56.3
462.4
1659.9
0.19
396
881
60.0
485.0
1812.9
0.20
-1%
9%
-1%
-1%
12%
-5%
8%
7%
7%
5%
9%
3%
0.84x
1.32x
1.09x
0.72x
1.38x
0.90x
0.78x
1.23x
1.03x
0.69x
1.27x
0.87x
8.5%
10.5%
7.3%
3.8%
12.7%
nm
10.1%
10.8%
9.2%
5.3%
12.5%
1.9%
9.9%
12.4%
8.1%
4.6%
14.8%
nm
11.5%
12.7%
10.1%
6.6%
14.5%
2.1%
UK & Ireland
Barclays
HSBC
Lloyds
RBS
Standard Chartered
Bank of Ireland
70
European Banks
Banking
Price
Price
12m l
12m h
1w
12m
6.99
30.9
4.57
13.93
7.91
33.1
26.8
12.87
26.8
12.87
-2%
2%
3%
0%
7%
3%
-2%
32%
45%
116%
0%
4%
7%
4%
9%
5%
-8%
23%
8%
60%
23.8
3722
172
36.8
5080
25.4
97.8
13.3
3280
133
30.5
3307
21.7
81.4
26.9
4235
173
38.5
5313
34.0
112
9.39
141
45.0
45.9
1422
4.97
2111
9.39
5.51
10.54
10.76
4.75
4.97
49.5
-5%
0%
5%
8%
5%
-3%
-1%
-2%
3%
14%
11%
4%
-8%
-6%
-7%
-10%
7%
7%
5%
-15%
-7%
8%
-6%
5%
3%
27%
-20%
5%
65%
11%
23%
15%
49%
11%
20%
-2%
3%
7%
10%
7%
0%
1%
1%
6%
18%
15%
8%
-4%
-2%
-5%
-8%
9%
10%
7%
-14%
-5%
1%
-12%
-2%
-4%
19%
-25%
-2%
23%
-18%
-8%
-14%
11%
-17%
-11%
France
BNP Paribas
Credit Agricole
Natixis
Societe Generale
43.9
7.01
3.49
29.7
26.2
2.91
1.76
15.3
47.9
7.995
3.70
34.4
54.5
17.5
10.79
23.2
54.5
17.5
10.79
23.2
-3%
-3%
-3%
-3%
-2%
1%
0%
-1%
-2%
-3%
7%
-4%
2%
18%
38%
3%
54%
122%
73%
70%
-1%
-1%
-1%
-1%
2%
5%
4%
3%
0%
-2%
9%
-2%
-5%
10%
29%
-4%
15%
65%
29%
26%
Germany
Commerzbank
Deutsche Bank
7.59
36.2
6.79
22.1
13.04
38.7
8.64
36.9
8.64
36.9
-2%
1%
-2%
0%
-30%
4%
-26%
6%
-27%
27%
1%
3%
2%
3%
-28%
6%
-31%
-1%
-46%
-6%
Italy
Banca Monte Paschi Siena
Banca Popolare di Milano
Banco Popolare
Intesa Sanpaolo
Mediobanca
UBI Banca
Unicredit
0.23
0.40
1.05
1.36
4.96
3.17
3.99
0.14
0.30
0.79
0.85
2.34
1.82
2.25
0.31
0.62
1.60
1.54
5.66
4.04
4.9
2.65
1.28
1.86
21.1
4.27
2.86
23.1
2.65
1.28
1.86
21.1
4.27
2.86
23.1
-7%
-5%
-8%
-5%
-3%
-7%
-7%
5%
-15%
-13%
-3%
-3%
-7%
-4%
7%
-22%
-11%
8%
6%
-10%
1%
17%
2%
-2%
12%
22%
8%
15%
5%
13%
9%
24%
54%
27%
47%
-5%
-2%
-5%
-3%
0%
-5%
-5%
9%
-12%
-10%
1%
1%
-3%
0%
9%
-21%
-9%
10%
8%
-8%
3%
10%
-5%
-9%
4%
14%
1%
8%
-22%
-16%
-19%
-8%
14%
-6%
9%
Portugal
Millennium BCP
Banco Espirito Santo
Banco BPI
0.10
0.72
0.97
0.05
0.46
0.40
0.12
1.19
1.38
1.97
2.89
1.35
1.97
2.89
1.35
-5%
-4%
-5%
-7%
-10%
-14%
-10%
-27%
-19%
41%
-12%
14%
85%
40%
134%
-2%
-2%
-2%
-3%
-6%
-10%
-8%
-25%
-17%
31%
-18%
7%
37%
4%
74%
113.5
92.0
226
79.1
12.33
67.8
51.3
284
153
76.5
53.9
148
54.9
8.42
41.7
30.1
208
104.0
117
97.75
242.3
83.9
13.7
72.45
54.25
304
170
114.5
149.8
16.1
320
3
147.1
13.1
177
173.0
15.4
19.7
2.2
36.7
3.1
16.9
1.7
20.3
19.8
0%
-4%
-1%
-2%
-1%
-2%
-1%
0%
-1%
9%
-4%
-4%
-1%
-7%
-3%
-1%
-4%
-8%
4%
-1%
14%
4%
0%
-1%
6%
1%
-4%
16%
31%
39%
28%
13%
22%
40%
19%
22%
39%
63%
44%
43%
41%
62%
58%
36%
43%
3%
-1%
1%
0%
1%
1%
1%
2%
1%
13%
0%
0%
3%
-4%
1%
2%
0%
-4%
6%
1%
16%
6%
1%
1%
8%
3%
-2%
8%
22%
30%
20%
5%
14%
31%
11%
14%
3%
22%
7%
6%
5%
20%
17%
1%
6%
Spain
Bankinter
BBVA
Banco de Sabadell
Banco Popular
Banesto
Caixabank
Santander
2.85
6.94
1.40
0.63
3.51
2.67
5.41
1.32
4.17
1.17
0.53
1.90
1.95
3.67
3.06
7.72
2.27
1.06
3.99
3.15
6.38
2.50
38.4
4.14
5.40
2.41
12.4
58.5
2.50
38.4
4.14
5.40
2.41
12.4
58.5
1%
-3%
-3%
-1%
0%
-2%
-2%
1%
-7%
-10%
6%
0%
-5%
-2%
-1%
-8%
-19%
-10%
-4%
-11%
-7%
48%
9%
-34%
12%
25%
3%
-1%
78%
39%
3%
-30%
31%
21%
25%
3%
-1%
0%
2%
2%
0%
1%
5%
-4%
-7%
10%
4%
-2%
2%
1%
-6%
-18%
-8%
-2%
-10%
-5%
38%
1%
-38%
4%
17%
-4%
-7%
33%
4%
-23%
-48%
-2%
-10%
-7%
Switzerland
BCV
Credit Suisse
EFG International
Julius Baer
UBS
Vontobel
477
27.1
11.45
37.0
16.9
29.5
466
15.6
4.77
29.9
9.685
17.8
560
29.3
13.3
41.0
18.0
33.4
4.1
42.8
1.68
8.29
64.6
1.91
3.3
34.5
1.36
6.69
52.1
1.54
0%
-3%
0%
-1%
0%
-2%
-7%
-5%
-11%
-4%
-3%
-3%
-10%
7%
-11%
-1%
12%
-11%
-5%
22%
34%
13%
13%
8%
-4%
45%
84%
20%
51%
51%
2%
0%
2%
1%
2%
1%
-4%
-1%
-7%
0%
1%
1%
-8%
9%
-9%
1%
14%
-9%
-11%
14%
26%
6%
5%
1%
-29%
8%
37%
-11%
12%
13%
Turkey
Akbank
Garanti Bank
Turkiye Is Bankasi
Yapi Kredi
8.14
8.50
5.90
4.84
6.00
6.34
4.00
3.23
10.50
11.35
7.80
6.28
32.6
35.7
26.5
21.0
13.0
14.2
10.58
8.38
0%
1%
-5%
-2%
-18%
-19%
-21%
-19%
-14%
-10%
-13%
-11%
-7%
-4%
-4%
-6%
36%
32%
48%
50%
3%
3%
-3%
0%
-15%
-16%
-17%
-16%
-12%
-8%
-11%
-9%
-13%
-11%
-10%
-12%
1%
-2%
10%
12%
309
700
61.6
334.0
1480.0
0.171
148
509
27.8
193.3
1092.0
0.082
338
773
63.7
370.6
1860.5
0.199
39.7
130.4
43.8
20.4
35.9
5.15
46.7
153
51.5
24.1
42.2
5.15
-3%
-3%
0%
0%
-4%
-8%
-2%
-6%
4%
12%
-7%
-4%
-3%
-5%
23%
9%
-18%
9%
24%
9%
32%
12%
-1%
41%
62%
32%
120%
50%
9%
75%
0%
0%
2%
3%
-1%
-5%
2%
-2%
8%
16%
-3%
-1%
-1%
-3%
25%
11%
-16%
11%
16%
2%
23%
5%
-8%
32%
21%
-2%
64%
11%
-19%
30%
Scandinavia
Danske
DNB
Jyske Bank
Nordea
Pohjola
SEB
Sparebank 1 SR
Svenska Handelsbanken
Swedbank
UK & Ireland
Barclays
HSBC
Lloyds
RBS
Standard Chartered
Bank of Ireland
71
European Banks
Banking
% up
% down
1w
26
22
4%
14%
4%
23%
-1%
-2%
-3%
-3%
-5%
1%
-16%
-10%
-26%
-15%
-12%
-3%
-1%
-1%
-2%
-1%
-4%
-1%
-12%
-13%
-22%
-19%
-8%
-6%
21
16
23
22
14
22
6
4
0%
0%
9%
0%
14%
18%
17%
0%
14%
19%
26%
32%
36%
41%
17%
0%
-1%
-2%
-2%
-4%
-2%
-6%
0%
0%
-5%
-3%
-1%
-7%
-3%
-8%
0%
0%
-8%
-4%
-2%
-11%
0%
-17%
4%
0%
-12%
-7%
-8%
-18%
-12%
-24%
5%
0%
-28%
-12%
-18%
-25%
-19%
-33%
7%
0%
-12%
-6%
-7%
-15%
-3%
-19%
4%
0%
-1%
-3%
-2%
-3%
-3%
-5%
0%
30%
-1%
-3%
-3%
-7%
-4%
-5%
0%
30%
-3%
-3%
-3%
-9%
-16%
-15%
3%
30%
-6%
-9%
-11%
-17%
-27%
-19%
2%
30%
-18%
-14%
-20%
-25%
-31%
-30%
3%
30%
-5%
-7%
-9%
-14%
-18%
-14%
4%
30%
France
BNP Paribas
Credit Agricole
Natixis
Societe Generale
28
24
14
27
7%
8%
14%
30%
25%
4%
0%
22%
-1%
0%
2%
-2%
-6%
-7%
-1%
-8%
-11%
-10%
-7%
-12%
-13%
-14%
-17%
-14%
-19%
-13%
-25%
-22%
-13%
-13%
-10%
-14%
-1%
0%
3%
-3%
-4%
-6%
0%
-2%
-6%
-8%
-5%
-4%
-8%
-9%
-14%
-7%
-14%
-10%
-18%
-13%
-8%
-8%
-5%
-7%
Germany
Commerzbank
Deutsche Bank
28
28
25%
11%
54%
14%
-1%
1%
-36%
4%
-55%
0%
-63%
-9%
-79%
-26%
-58%
-5%
-5%
-2%
-21%
-5%
-41%
-7%
-47%
-12%
-66%
-21%
-43%
-10%
Italy
Banca Monte Paschi Siena
Banca Popolare di Milano
Banco Popolare
Intesa Sanpaolo
Mediobanca
UBI Banca
Unicredit
19
12
17
28
10
17
31
16%
0%
12%
14%
0%
12%
23%
16%
17%
29%
36%
10%
18%
29%
0%
-23%
-6%
-5%
-5%
-8%
1%
100%
-23%
4%
-13%
-26%
-17%
-13%
0%
-23%
-22%
-19%
-41%
-37%
-34%
-200%
-23%
-33%
-25%
-40%
-42%
-42%
-150%
-43%
-48%
-45%
-53%
-54%
-62%
-300%
-23%
-22%
-25%
-41%
-37%
-38%
-10%
0%
-4%
3%
0%
-2%
0%
-10%
0%
3%
-4%
-1%
-8%
-7%
-55%
-20%
-9%
-10%
-5%
-21%
-18%
-70%
-20%
-19%
-15%
-8%
-25%
-24%
-85%
-33%
-30%
-35%
-23%
-36%
-42%
-55%
-20%
-14%
-15%
-5%
-21%
-21%
Portugal
Millennium BCP
Banco Espirito Santo
Banco BPI
10
13
10
0%
0%
20%
0%
31%
0%
-25%
0%
4%
-25%
-110%
4%
-25%
-108%
4%
50%
-104%
-9%
-250%
-103%
-27%
50%
-106%
4%
0%
-9%
0%
0%
-29%
-9%
0%
-29%
-9%
-60%
-36%
-9%
-80%
-51%
-23%
0%
-36%
-9%
Scandinavia
Danske
DNB
Jyske Bank
Nordea
Pohjola
SEB
Sparebank 1 SR
Svenska Handelsbanken
Swedbank
29
30
7
28
6
29
7
28
27
14%
3%
0%
4%
0%
7%
0%
4%
7%
3%
10%
14%
7%
0%
3%
0%
7%
7%
2%
0%
-1%
1%
0%
1%
0%
0%
0%
-8%
1%
7%
-1%
5%
1%
5%
1%
2%
-11%
3%
4%
1%
4%
3%
9%
0%
2%
-17%
6%
-1%
2%
-2%
7%
22%
0%
6%
-25%
7%
-18%
2%
-5%
15%
16%
1%
11%
-16%
6%
0%
2%
-2%
8%
21%
0%
6%
2%
0%
0%
0%
0%
0%
0%
0%
0%
-6%
3%
3%
-1%
2%
0%
6%
0%
1%
-6%
6%
-1%
1%
3%
3%
15%
0%
3%
-8%
11%
1%
4%
-4%
8%
27%
0%
6%
-14%
12%
-17%
4%
-3%
13%
20%
1%
12%
-8%
11%
-1%
4%
-1%
8%
26%
0%
6%
Spain
Bankinter
BBVA
Banco de Sabadell
Banco Popular
Banesto
Caixabank
Santander
21
32
24
26
0
19
32
24%
13%
4%
4%
na
0%
3%
10%
19%
17%
12%
na
11%
22%
1%
-3%
-3%
50%
0%
-3%
-3%
-4%
-7%
-13%
-25%
0%
8%
-13%
-4%
-5%
-13%
-63%
0%
-12%
-17%
-4%
-7%
-35%
-75%
0%
-52%
-20%
-26%
-16%
-59%
-90%
0%
-67%
-34%
-4%
-8%
-29%
-63%
0%
-43%
-17%
-2%
-2%
-1%
-1%
0%
-2%
-1%
-2%
-5%
-12%
-14%
0%
-8%
-9%
-2%
-11%
-16%
-23%
0%
-11%
-13%
2%
-9%
-20%
-37%
0%
-14%
-14%
-15%
-8%
-30%
-62%
0%
-28%
-24%
2%
-10%
-20%
-31%
0%
-11%
-14%
Switzerland
BCV
Credit Suisse
EFG International
Julius Baer
UBS
Vontobel
6
27
9
21
30
8
0%
22%
0%
38%
20%
13%
0%
4%
22%
14%
7%
13%
0%
1%
2%
0%
0%
0%
-6%
-1%
1%
0%
4%
-1%
-6%
1%
12%
0%
1%
0%
-7%
5%
11%
-5%
-17%
1%
-7%
-21%
4%
-24%
-37%
-12%
-7%
4%
6%
-1%
-7%
0%
0%
1%
-2%
2%
1%
-1%
-7%
0%
-4%
1%
4%
1%
-7%
5%
-1%
-1%
10%
1%
-10%
7%
-3%
-2%
-9%
4%
-9%
-18%
-5%
-14%
-24%
-7%
-10%
5%
-5%
3%
1%
2%
Turkey
Akbank
Garanti Bank
Turkiye Is Bankasi
Yapi Kredi
20
19
20
16
35%
37%
30%
19%
5%
0%
10%
19%
2%
3%
1%
0%
3%
5%
2%
5%
3%
4%
4%
7%
9%
4%
10%
11%
18%
7%
22%
11%
5%
2%
7%
9%
0%
1%
-1%
-1%
1%
1%
1%
-1%
0%
0%
3%
-3%
1%
-4%
3%
4%
10%
-1%
12%
2%
-2%
-5%
3%
0%
UK & Ireland
Barclays
HSBC
Lloyds
RBS
Standard Chartered
Bank of Ireland
26
30
29
26
32
11
8%
17%
21%
0%
3%
9%
12%
23%
7%
23%
25%
0%
1%
0%
0%
1%
0%
-15%
0%
-1%
13%
-20%
-2%
-15%
0%
-3%
17%
-24%
-2%
-15%
-1%
-3%
23%
-21%
-2%
-15%
0%
-4%
1%
-33%
-1%
0%
-1%
-4%
20%
-22%
-2%
-15%
0%
0%
0%
0%
0%
0%
0%
-2%
6%
-9%
-3%
0%
3%
-5%
7%
-16%
-2%
0%
5%
-7%
8%
-16%
-1%
0%
6%
-10%
1%
-29%
-2%
-60%
5%
-6%
8%
-15%
-2%
0%
72
1w
# ests
European Banks
Banking
Company section
73
Barclays plc
Banking
Sell
Rating system
Relative
Current price
Price target
GBp 309
GBp 160
2013e
2014e
2015e
old % old % old %
Income 28051 - 28107 - 27655 9219
9598
PPOP 8946
27.62
29.80
33.04
EPS
Source: Berenberg estimates
Share data
12,243
40,519,780
Performance data
High 52 weeks (GBp)
Low 52 weeks (GBp)
Relative performance to SXXP
1 month
0.5 %
3 months
-0.9 %
12 months
34.8 %
334
151
SX7P
1.9 %
0.4 %
26.7 %
Risks to our view: The main risk to our view is that our revenue
estimates are too low. For the retail and commercial businesses, this
could be driven by interest rates rising or yield curves steepening. For
IB revenues, this could be driven by higher client activity.
2011
2012
2013E
2014E
2015E
24.4
26.7
433.9
340.4
5.50
12,199
11.5x
0.90x
5.6
6.9
1.8
23
-5.1
-1.5
401.3
326.8
6.50
12,243
-205.4x
0.94x
-1.2
-1.5
2.1
-127
28.5
27.6
422.6
349.6
6.50
12,243
11.1x
0.88x
6.7
8.2
2.1
23
30.7
29.8
446.1
373.1
6.50
12,243
10.3x
0.83x
6.9
8.2
2.1
21
34.1
33.0
472.8
399.8
6.50
12,243
9.3x
0.77x
7.2
8.5
2.1
19
74
12 June 2013
James Chappell
Analyst
+44 20 3207 7844
james.chappell@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Barclays plc
Banking
Financials
Market ratios; per share data (GBP)
EPS (reported)
EPS (Berenberg adjusted)
2011
24.4
26.7
2012
-5.1
-1.5
2013e
28.5
27.6
2014e
30.7
29.8
2015e
34.1
33.0
TBVPS
BVPS (reported)
DPS
P/E (Berenberg adjusted)
340.4
433.9
5.50
11.6x
326.8
401.3
6.50
-206.0x
349.6
422.6
6.50
11.2x
373.1
446.1
6.50
10.4x
399.8
472.8
6.50
9.3x
0.91x
0.71x
1.8%
23%
12,526
0.94x
0.77x
2.1%
-127%
12,614
0.88x
0.73x
2.1%
23%
12,614
0.83x
0.69x
2.1%
21%
12,614
0.77x
0.65x
2.1%
19%
12,614
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
12,201
20,091
32,292
-20,886
11,406
-5,602
5,804
-34
5,770
-1,902
-944
2,924
11,654
13,355
25,009
-21,012
3,997
-3,340
657
140
797
-616
-805
-624
12,035
16,016
28,051
-19,105
8,946
-3,245
5,701
18
5,719
-1,430
-805
3,484
12,254
15,853
28,107
-18,888
9,219
-3,153
6,066
19
6,085
-1,521
-805
3,759
12,131
15,525
27,655
-18,057
9,598
-2,988
6,611
19
6,630
-1,657
-805
4,167
-4.5%
-33.5%
-22.6%
0.6%
-65.0%
-40.4%
-88.7%
3.3%
19.9%
12.2%
-9.1%
123.8%
-2.8%
767.8%
1.8%
-1.0%
0.2%
-1.1%
3.1%
-2.8%
6.4%
-1.0%
-2.1%
-1.6%
-4.4%
4.1%
-5.2%
9.0%
-86.2%
-67.6%
-14.7%
-121.3%
617.6%
132.1%
0.0%
-658.4%
6.4%
6.4%
0.0%
7.9%
8.9%
8.9%
0.0%
10.9%
1.19%
2.0x
64.7%
1.37%
1.30%
45.9%
32.8%
6.9%
5.6%
0.19%
36.0x
0.74%
1.17%
1.2x
84.0%
1.38%
0.78%
28.7%
93.8%
-1.5%
-1.2%
-0.04%
36.4x
-0.16%
1.19%
2.8x
68.1%
1.27%
0.74%
27.0%
25.1%
8.2%
6.7%
0.23%
35.2x
0.89%
1.19%
2.9x
67.2%
1.25%
0.69%
25.7%
25.1%
8.2%
6.9%
0.25%
33.2x
0.94%
1.16%
3.2x
65.3%
1.19%
0.64%
24.6%
25.1%
8.5%
7.2%
0.27%
31.2x
1.02%
-0.03%
0.02%
0.00%
-0.02%
19.3%
0.01%
-0.52%
-17.25%
61.0%
-8.4%
-6.7%
-0.23%
-15.9%
-0.10%
-0.04%
-1.70%
-68.7%
9.7%
7.9%
0.27%
-0.9%
-0.03%
-0.05%
-1.23%
0.0%
0.1%
0.2%
0.02%
-1.9%
-0.06%
-0.05%
-1.10%
0.0%
0.3%
0.3%
0.03%
-0.90%
1.05%
0.05%
0.08%
2011
2012
2013
2014
2015
11/12
12/13
13/14
14/15
431,934
1,562,083
999,374
366,032
154,606
9,607
54,352
46,506
43,066
390,999
423,906
1,488,335
996,644
385,411
143,543
9,371
50,615
42,700
41,722
386,858
455,726
1,512,317
1,028,464
454,215
143,543
9,371
53,304
45,389
42,838
394,510
463,553
1,518,095
1,036,291
466,680
143,543
9,371
56,267
48,352
40,952
406,167
474,465
1,523,686
1,047,203
480,035
143,543
9,371
59,638
51,723
44,323
408,729
-1.9%
-4.7%
-0.3%
5.3%
-7.2%
-2.5%
-6.9%
-8.2%
-3.1%
-1.1%
7.5%
1.6%
3.2%
17.9%
0.0%
0.0%
5.3%
6.3%
2.7%
2.0%
1.7%
0.4%
0.8%
2.7%
0.0%
0.0%
5.6%
6.5%
-4.4%
3.0%
2.4%
0.4%
1.1%
2.9%
0.0%
0.0%
6.0%
7.0%
8.2%
0.6%
25.0%
27.7%
118%
12.9%
11.0%
26.0%
28.5%
110%
13.2%
10.8%
26.1%
30.1%
100%
13.3%
10.9%
26.8%
30.5%
99%
12.4%
10.1%
26.8%
31.1%
99%
13.2%
10.8%
1.0%
0.8%
-8.0%
0.3%
-0.2%
0.1%
1.7%
-9.7%
0.0%
0.1%
0.7%
0.4%
-1.0%
-0.8%
-0.8%
0.1%
0.6%
-0.5%
0.7%
0.8%
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
Market Cap
Bloomberg ticker
Reuters ticker
Share price
Analyst
37,788
BARC LN
GBp
BARC.L
308.65
James Chappell
james.chappell@berenberg.com
+44 20 3207 7844
75
BBVA SA
Banking
2011
2012
2013E
2014E
2015E
0.64
0.64
7.94
6.26
0.40
4,668
10.8x
1.11x
7.7
9.9
5.8
62
0.32
0.32
7.81
6.09
0.40
5,176
21.4x
1.14x
4.1
5.3
5.8
124
0.99
0.99
8.85
7.20
0.40
5,449
7.0x
0.96x
12.2
15.3
5.8
40
0.83
0.83
9.35
7.73
0.41
5,527
8.4x
0.90x
9.2
11.2
5.9
49
0.96
0.96
9.56
7.99
0.47
5,687
7.2x
0.87x
10.3
12.4
6.8
49
76
Sell
Rating system
Relative
Current price
Price target
EUR 6.94
EUR 7.00
2013e
2014e
2015e
old % old % old %
23797
-3.0
24474
-2.0
25535
-1.8
Income
PPOP 12465 -6.0 12671 -3.9 13362 -3.2
0.99 0.0 0.83 0.0 0.96 0.0
EPS
Source: Berenberg estimates
Share data
5,449
35,493,000
Performance data
High 52 weeks (EUR)
Low 52 weeks (EUR)
Relative performance to SXXP
1 month
-5.0 %
3 months
-9.4 %
12 months
7.6 %
8
4
SX7P
-3.7 %
-8.1 %
-0.5 %
12 June 2013
Nick Anderson
Analyst
+44 20 3207 7838
nick.anderson@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
BBVA SA
Banking
Financials
Market ratios and per share data
EPS (reported)
EPS (Berenberg adjusted)
TBVPS
BVPS
DPS
P/E (Berenberg adjusted)
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
Income Statement and Ratios
Year to 31-Dec
Income Summary (EURm)
Net interest income (NII)
Net fees & commissions
Trading income
Other income
Total income
Operating expenses
Pre-provision op. profits (PPOP)
Loan loss charge (LLC)
Operating Profit
Other non-operating
Exceptionals
Reported profit before tax
Taxation
Discontinued Operations
Minorities + Preferences
Attributable profits (reported)
Adj. attributable profit
Income Ratios (%)
NII/Average Assets
PPOP/LLC (x)
Cost/income ratio
Cost/avg. assets
LLC/avg. loans
LLC/NII
Tax rate
RoTE adjusted (%)
RoE (%)
RoA
Asset Tangible Leverage (x)
RoRWA
Balance Sheet and Ratios
Year to 31-Dec
Balance Sheet Summary (EURm)
Customer loans
Total assets
Interest earning assets
Customer deposits
Debt securities & other borrowings
Minorities
Ordinary equity
Tangible equity
Core (Equity) Tier 1 Capital
Risk-weighted assets
Balance Sheet Ratios (%)
RWA/assets
Loans/assets
Loans/Deposits
Tier 1 ratio
Core (Equity) Tier 1 ratio
NPL/loans
Provision coverage
2011
0.64
0.64
6.26
7.94
0.40
10.8
1.11
0.87
5.8
62%
4,668
2012
0.32
0.32
6.09
7.81
0.40
21.4
1.14
0.89
5.8
124%
5,176
2013e
0.99
0.99
7.20
8.85
0.40
7.0
0.96
0.78
5.8
40%
5,449
2014e
0.83
0.83
7.73
9.35
0.41
8.4
0.90
0.74
5.9
49%
5,527
2015e
0.96
0.96
7.99
9.56
0.47
7.2
0.87
0.73
6.8
49%
5,687
2011
2012
2013e
2014e
2015e
13,152
4,031
1,481
1,363
20,028
-9,737
10,290
-4,226
6,064
-2,618
0
3,446
-206
246
-481
3,004
3,004
15,122
4,353
1,767
1,199
22,441
-10,786
11,655
-7,981
3,674
-2,015
0
1,659
276
393
-651
1,676
1,676
15,017
4,393
2,544
1,137
23,091
-11,369
11,722
-5,478
6,244
-544
0
5,700
-1,172
1,588
-700
5,416
5,416
16,145
4,527
1,915
1,390
23,977
-11,798
12,179
-4,835
7,345
-560
0
6,785
-1,497
0
-694
4,593
4,593
17,024
4,646
1,900
1,500
25,070
-12,136
12,934
-4,535
8,399
-360
0
8,039
-1,826
0
-754
5,458
5,458
2.29%
2.4x
48.6%
1.69%
1.22%
32.1%
6.0%
9.9%
7.7%
0.52%
18.5x
0.93%
2.45%
1.5x
48.1%
1.75%
2.26%
52.8%
-16.6%
5.3%
4.1%
0.27%
20.2x
0.51%
2.36%
2.1x
49.2%
1.79%
1.54%
36.5%
20.6%
15.3%
12.2%
0.85%
16.2x
1.61%
2.52%
2.5x
49.2%
1.84%
1.34%
29.9%
22.1%
11.2%
9.2%
0.72%
15.1x
1.35%
2.61%
2.9x
48.4%
1.86%
1.23%
26.6%
22.7%
12.4%
10.3%
0.84%
14.5x
1.58%
2011
2012
2013e
2014e
2015e
351,900
597,688
523,754
282,173
81,930
1,893
40,952
32,275
34,160
330,771
352,930
637,860
547,878
292,716
87,198
2,373
40,449
31,537
35,451
329,033
358,582
634,166
551,341
338,370
83,813
2,362
48,205
39,253
36,612
344,217
365,079
645,995
561,693
332,288
85,490
2,409
51,650
42,698
40,057
338,408
370,954
657,309
571,500
346,407
87,199
2,457
54,379
45,427
42,786
350,635
55.3%
58.9%
125%
10.3%
10.3%
4.0%
61%
51.6%
55.3%
121%
10.8%
10.8%
5.1%
72%
54.3%
56.5%
106%
10.6%
10.6%
52.4%
56.5%
110%
11.8%
11.8%
53.3%
56.4%
107%
12.2%
12.2%
77
Analyst
Phone
email:
37,832
BBVA SM
BBVA.MC
6.94
Nick Anderson
+44 20 3207 7838
nick.anderson@berenberg.com
11/12
12/13
13/14
Year-on-year change (%)
15.0
-0.7
7.5
8.0
0.9
3.0
19.3
44.0
-24.7
-12.1
-5.2
22.3
12.1
2.9
3.8
10.8
5.4
3.8
13.3
0.6
3.9
88.9
-31.4
-11.7
-39.4
70.0
17.6
14/15
5.4
2.6
-0.8
7.9
4.6
2.9
6.2
-6.2
14.4
-51.9
-233.6
243.6
-525.3
19.0
27.7
18.5
22.0
35.3
-44.2
-44.2
7.4
223.2
223.2
-0.7
-15.2
-15.2
8.6
18.8
18.8
11/12
12/13
13/14
Year-on-year change (%)
0.3
1.6
1.8
6.7
-0.6
1.9
4.6
0.6
1.9
3.7
15.6
-1.8
6.4
-3.9
2.0
25.3
-0.4
2.0
-1.2
19.2
7.1
-2.3
24.5
8.8
3.8
3.3
9.4
-0.5
4.6
-1.7
14/15
1.6
1.8
1.7
4.2
2.0
2.0
5.3
6.4
6.8
3.6
BNP Paribas SA
Banking
2011
2012
2013E
2014E
2015E
4.82
5.01
57.1
45.5
1.20
1,208
9.1x
0.96x
8.6
10.6
2.7
25
5.16
5.28
63.5
52.8
1.50
1,242
8.5x
0.83x
9.2
9.6
3.4
29
4.43
4.64
66.4
55.8
1.50
1,242
9.9x
0.79x
6.8
7.9
3.4
34
4.19
4.40
68.9
58.3
1.50
1,242
10.5x
0.75x
6.2
7.2
3.4
36
4.46
4.67
71.8
61.2
1.50
1,242
9.8x
0.72x
6.3
7.3
3.4
34
78
Sell
Rating system
Relative
Current price
Price target
EUR 43.90
EUR 25.00
2013e
2014e
2015e
old % old % old %
Income 38276 3.2 38406 2.6 38442 2.6
PPOP 13453 -1.6 13416 -3.6 13437 -0.6
4.62 0.3 4.54 -3.2 4.64 0.6
EPS
Source: Berenberg estimates
Share data
1,242
4,177,239
Performance data
High 52 weeks (EUR)
Low 52 weeks (EUR)
Relative performance to SXXP
1 month
0.6 %
3 months
-1.1 %
12 months
29.7 %
48
26
SX7P
2.0 %
0.2 %
21.6 %
12 June 2013
James Chappell
Analyst
+44 20 3207 7844
james.chappell@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
BNP Paribas SA
Banking
Financials
Market ratios; per share data (EUR)
2011
2012
2013e
2014e
2015e
EPS (reported)
4.82
5.16
4.43
4.19
4.46
Market Cap
TBVPS (reported)
45.5
52.8
55.8
58.3
61.2
Bloomberg ticker
46.3
57.1
1.20
9.1x
49.8
63.5
1.50
8.5x
52.8
66.4
1.50
9.9x
55.3
68.9
1.50
10.5x
58.2
71.8
1.50
9.8x
Reuters ticker
0.96x
0.77x
2.7%
25%
1,197
0.83x
0.69x
3.4%
29%
1,215
0.79x
0.66x
3.4%
34%
1,239
0.75x
0.64x
3.4%
36%
1,239
0.72x
0.61x
3.4%
34%
1,239
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
42,384
-26,116
16,268
-6,797
9,471
100
80
9,651
-2,757
-844
6,050
-282
5,768
39,072
-26,543
12,529
-3,941
8,588
1,302
489
10,379
-3,061
-754
6,564
-293
6,271
39,510
-26,278
13,232
-4,351
8,881
0
488
9,369
-2,811
-800
5,758
-275
5,483
39,396
-26,461
12,935
-4,447
8,488
4
454
8,946
-2,684
-800
5,462
-275
5,187
39,433
-26,071
13,363
-4,392
8,971
4
454
9,429
-2,829
-800
5,800
-275
5,525
-7.8%
1.6%
-23.0%
-42.0%
-9.3%
1.1%
-1.0%
5.6%
10.4%
3.4%
-0.3%
0.7%
-2.2%
2.2%
-4.4%
0.1%
-1.5%
3.3%
-1.2%
5.7%
7.5%
11.0%
-9.7%
-8.2%
-4.5%
-4.5%
5.4%
5.4%
8.5%
-12.3%
-5.1%
6.2%
8.7%
-12.6%
-5.4%
6.5%
2.14%
2.4x
61.6%
1.32%
1.01%
16.0%
28.6%
10.6%
8.6%
0.29%
36.2x
0.94%
2.02%
3.2x
67.9%
1.37%
0.61%
10.1%
29.5%
9.6%
9.2%
0.33%
29.1x
1.14%
2.08%
3.0x
66.5%
1.38%
0.69%
11.0%
30.0%
7.9%
6.8%
0.29%
27.4x
0.91%
2.09%
2.9x
67.2%
1.40%
0.71%
11.3%
30.0%
7.2%
6.2%
0.28%
25.9x
0.86%
2.11%
3.0x
66.1%
1.39%
0.69%
11.1%
30.0%
7.3%
6.3%
0.30%
24.5x
0.91%
-0.12%
0.06%
0.01%
0.02%
6.3%
0.05%
-0.40%
-5.95%
0.9%
-1.1%
0.6%
0.04%
-1.4%
0.01%
0.09%
0.93%
0.5%
-1.6%
-2.4%
-0.04%
0.7%
0.02%
0.02%
0.27%
0.0%
-0.8%
-0.6%
-0.01%
-1.1%
-0.01%
-0.02%
-0.15%
0.0%
0.1%
0.1%
0.02%
0.20%
-0.22%
-0.05%
0.05%
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
665,834
1,965,283
1,786,516
546,284
177,469
10,256
68,109
54,231
62,337
614,000
630,520
1,907,290
1,730,421
539,513
188,421
8,536
78,645
65,469
58,048
552,000
623,702
1,891,048
1,715,685
536,142
187,244
8,536
82,265
69,089
61,720
599,417
629,049
1,877,087
1,703,019
530,999
185,447
8,536
85,589
72,413
65,044
602,282
635,375
1,863,802
1,690,966
525,955
183,686
8,536
89,250
76,074
68,705
604,794
-5.3%
-3.0%
-3.1%
-1.2%
6.2%
-16.8%
15.5%
20.7%
-6.9%
-10.1%
-1.1%
-0.9%
-0.9%
-0.6%
-0.6%
0.0%
4.6%
5.5%
6.3%
8.6%
0.9%
-0.7%
-0.7%
-1.0%
-1.0%
0.0%
4.0%
4.8%
5.4%
0.5%
1.0%
-0.7%
-0.7%
-0.9%
-0.9%
0.0%
4.3%
5.1%
5.6%
0.4%
31.2%
33.9%
122%
11.6%
10.2%
28.9%
33.1%
117%
13.6%
10.5%
31.7%
33.0%
116%
12.0%
10.3%
32.1%
33.5%
118%
12.5%
10.8%
32.4%
34.1%
121%
13.0%
11.4%
-2.3%
-0.8%
-5.0%
2.1%
0.4%
2.8%
-0.1%
-0.5%
-1.6%
-0.2%
0.4%
0.5%
2.1%
0.5%
0.5%
0.4%
0.6%
2.3%
0.6%
0.6%
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
54,537
BNPP.PA
Share price
Analyst
BNP FP
EUR
43.90
James Chappell
james.chappell@berenberg.com
+44 20 3207 7844
79
Commerzbank AG
Banking
2011
2012
2013E
2014E
2015E
1.8
1.8
41.9
37.8
0.0
346
4.1x
0.20x
2.4
10.5
0.0
0
-0.1
-0.1
39.6
36.0
0.0
561
-122.2x
0.21x
-0.1
-0.6
0.0
0
0.3
0.3
22.8
20.9
0.0
930
22.1x
0.36x
1.2
1.4
0.0
0
0.8
0.8
23.6
21.8
0.0
1,138
9.0x
0.35x
3.7
4.0
0.0
0
1.0
1.0
24.6
22.7
0.0
1,138
8.0x
0.34x
4.0
4.3
0.0
0
80
Sell
Rating system
Relative
Current price
Price target
EUR 7.63
EUR 6.00
2013e
2014e
2015e
old % old % old %
9984
10161
10262
Income
3104
3226
PPOP 2765
0.55 -37.3 1.65 -48.8 1.86 -48.8
EPS
Source: Berenberg estimates
Share data
1,138
17,544,000
Performance data
High 52 weeks (EUR)
Low 52 weeks (EUR)
Relative performance to SXXP
1 month
-24.5 %
3 months
-47.2 %
12 months
-71.4 %
17
7
SX7P
-23.2 %
-45.9 %
-79.4 %
12 June 2013
Nick Anderson
Analyst
+44 20 3207 7838
nick.anderson@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Commerzbank AG
Banking
Financials
Market ratios; per share data (EUR)
EPS (reported)
EPS (Berenberg adjusted)
2011
1.85
1.85
2012
-0.06
-0.06
2013e
0.34
0.34
2014e
0.85
0.85
2015e
0.95
0.95
TBVPS
BVPS (reported)
DPS
P/E (Berenberg adjusted)
37.81
41.89
0.00
4.1x
36.01
39.57
0.00
-122.8x
20.94
22.77
0.00
22.2x
21.79
23.62
0.00
9.0x
22.74
24.57
0.00
8.0x
Reuters ticker
CBKG.DE
Share price
EUR
7.66
Analyst
Nick Anderson
nick.anderson@berenberg.com
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
0.20x
0.18x
0.0%
0%
346
0.21x
0.19x
0.0%
0%
561
0.37x
0.34x
0.0%
0%
930
0.35x
0.32x
0.0%
0%
1,138
0.34x
0.31x
0.0%
0%
1,138
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
6,725
3,495
1,986
-2,316
9,890
-7,992
1,898
-1,390
508
0
0
508
240
-109
639
639
6,487
3,249
89
50
9,875
-7,030
2,845
-1,660
1,185
0
0
1,185
-806
-103
276
-35
5,477
3,313
1,292
-99
9,984
-7,219
2,765
-1,643
1,121
0
0
1,121
-208
-100
813
320
5,516
3,388
1,200
57
10,161
-7,058
3,104
-1,685
1,419
0
0
1,419
-355
-100
964
964
5,549
3,456
1,200
57
10,262
-7,036
3,226
-1,649
1,577
0
0
1,577
-394
-100
1,083
1,083
-3.5%
-7.0%
-95.5%
-102.2%
-0.2%
-12.0%
49.9%
19.4%
133.3%
-15.6%
2.0%
1351.7%
-298.0%
1.1%
2.7%
-2.8%
-1.0%
-5.4%
0.7%
2.3%
-7.1%
-157.6%
1.8%
-2.2%
12.3%
2.5%
26.5%
0.6%
2.0%
0.0%
0.0%
1.0%
-0.3%
3.9%
-2.2%
11.2%
133.3%
-5.4%
-435.8%
-74.2%
-5.5%
-2.9%
-56.8%
194.7%
-105.5% -1015.0%
26.5%
70.4%
0.0%
18.5%
201.0%
11.2%
11.2%
0.0%
12.4%
12.4%
0.95%
1.4x
80.8%
1.13%
0.44%
20.7%
-47.2%
10.5%
2.4%
0.11%
99.6x
0.30%
0.97%
1.7x
71.2%
1.05%
0.57%
25.6%
68.0%
-0.6%
-0.1%
0.01%
-57.9x
0.03%
0.85%
1.7x
72.3%
1.12%
0.59%
30.0%
18.6%
1.4%
1.2%
0.07%
20.8x
0.20%
0.87%
1.8x
69.5%
1.12%
0.62%
30.5%
25.0%
4.0%
3.7%
0.17%
23.6x
0.52%
1.05%
2.0x
68.6%
1.08%
0.86%
29.7%
25.0%
-12.1%
-11.1%
-0.43%
28.2x
-1.36%
0.01%
-0.11%
0.02%
0.18%
-9.6%
-0.08%
0.13%
4.9%
115.3%
-11.1%
-2.6%
-0.10%
1.1%
0.08%
0.03%
4.4%
-49.5%
1.9%
1.4%
0.06%
-2.9%
-0.01%
0.03%
0.5%
6.4%
2.6%
2.4%
0.10%
-0.9%
-0.03%
0.24%
-0.8%
0.0%
-16.1%
-14.8%
-0.60%
-0.27%
0.17%
0.32%
-1.87%
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
296,586
661,763
278,546
636,012
276,023
637,797
271,469
627,275
267,745
618,669
-6.1%
-3.9%
-0.9%
0.3%
-1.6%
-1.6%
-1.4%
-1.4%
255,344
118,958
699
24,104
22,016
20,756
236,600
265,842
91,648
886
25,441
23,361
22,610
208,135
25,902
23,822
22,204
206,558
26,866
24,786
23,168
202,823
27,949
25,869
24,251
199,750
4.1%
-23.0%
26.8%
5.5%
6.1%
8.9%
-12.0%
1.8%
2.0%
-1.8%
-0.8%
3.7%
4.0%
4.3%
-1.8%
4.0%
4.4%
4.7%
-1.5%
35.8%
44.8%
116%
11.1%
8.8%
6.64%
44.0%
32.7%
43.8%
105%
13.1%
10.9%
6.79%
42.8%
32.4%
43.3%
32.3%
43.3%
32.3%
43.3%
-0.3%
-0.5%
-0.1%
0.0%
0.0%
0.0%
10.7%
11.4%
12.1%
-3.0%
-1.0%
-11%
2.0%
2.1%
0.15%
-1.2%
-0.1%
0.7%
0.7%
Market Cap
Bloomberg ticker
EURm
4463
CBK GY
81
Crdit Agricole SA
Banking
2011
2012
2013E
2014E
2015E
-0.61
-0.61
17.13
9.37
0.00
2,498
-11.5x
0.75x
-3.3
-6.1
0.0
0
-2.58
-2.58
15.90
9.63
0.00
2,498
-2.7x
0.73x
-15.5
-26.9
0.0
0
0.99
0.99
16.91
10.62
0.00
2,498
7.0x
0.66x
6.0
9.7
0.0
0
0.95
0.95
17.85
11.56
0.00
2,498
7.4x
0.61x
5.4
8.5
0.0
0
1.05
1.05
18.89
12.60
0.00
2,498
6.7x
0.56x
5.7
8.6
0.0
0
82
Sell
Rating system
Relative
Current price
Price target
EUR 7.01
EUR 3.00
2013e
2014e
2015e
old % old % old %
Income 16849 -3.7 16742 -1.0 16629 0.0
PPOP 5126 -3.9 5060 5.8 4999 9.0
0.93 7.5 0.92 3.2 0.89 18.4
EPS
Source: Berenberg estimates
Share data
2,498
12,614,740
Performance data
High 52 weeks (EUR)
Low 52 weeks (EUR)
Relative performance to SXXP
1 month
3.7 %
3 months
-2.6 %
12 months
103.7 %
8
3
SX7P
5.1 %
-1.3 %
95.6 %
12 June 2013
James Chappell
Analyst
+44 20 3207 7844
james.chappell@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Crdit Agricole SA
Banking
Financials
Market ratios; per share data (EUR)
EPS (reported)
TBVPS (reported)
TBVPS (Berenberg adjusted)
BVPS (reported)
DPS
P/E (Berenberg adjusted)
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
2011
-0.61
9.4
2012
-2.58
9.6
2013e
0.99
10.6
2014e
0.95
11.6
2015e
1.05
12.6
9.9
17.1
-
8.9
15.9
-
9.9
16.9
7.0x
10.8
17.8
7.4x
11.8
18.9
6.7x
0.75x
0.41x
2,498
0.73x
0.44x
2,498
0.66x
0.41x
2,498
0.61x
0.39x
2,498
0.56x
0.37x
2,498
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
19,385
-12,393
6,992
-4,252
2,740
-3
230
-1,575
16,440
-12,037
4,403
-3,736
667
188
503
-3,395
16,229
-11,302
4,927
-3,064
1,862
20
1,023
0
16,573
-11,222
5,351
-2,892
2,459
20
990
0
16,621
-11,129
5,492
-2,596
2,897
0
978
0
-15.2%
-2.9%
-37.0%
-12.1%
-75.7%
-1.3%
-6.1%
11.9%
-18.0%
2.1%
-0.7%
8.6%
-5.6%
32.0%
0.0%
-3.2%
0.3%
-0.8%
2.6%
-10.3%
17.8%
1,392
-885
-272
-1,705
-1,470
-2,037
-403
42
-3,991
-6,389
2,905
-577
-320
456
2,464
3,468
-800
-323
0
2,346
3,875
-930
-302
0
2,643
19.4%
38.7%
0.8%
11.7%
16.3%
-6.4%
-4.8%
12.7%
1.17%
1.6x
63.9%
0.75%
1.06%
21.9%
63.6%
-5.9%
-3.3%
-0.09%
69.0x
-0.28%
0.92%
1.2x
73.2%
0.68%
0.88%
1.6x
69.6%
0.61%
0.90%
1.9x
67.7%
0.61%
0.90%
2.1x
67.0%
0.60%
-21.1%
-28.3%
14.5%
-9.7%
-4.5%
36.4%
-4.9%
-9.1%
2.1%
15.1%
-2.8%
-0.7%
0.3%
14.4%
-1.1%
-0.8%
22.7%
-19.8%
-27.3%
-15.5%
-0.35%
78.7x
-1.33%
18.9%
19.8%
10.2%
6.0%
0.13%
76.6x
0.49%
17.5%
23.1%
8.8%
5.4%
0.13%
69.4x
0.46%
15.6%
24.0%
9.2%
5.7%
0.14%
63.8x
0.52%
3.6%
-16.9%
14.0%
-2.7%
-7.6%
16.2%
-13.7%
-10.1%
-4.8%
-9.4%
-5.3%
-10.5%
4.1%
3.5%
4.8%
12.7%
-8.1%
12.1%
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
399,381
1,723,608
1,525,342
525,636
148,320
6,495
42,797
24,964
62,100
522,200
329,756
1,842,361
1,637,692
483,638
150,390
5,505
39,727
23,401
61,700
480,000
1,842,400
1,842,400
1,842,400
5,562
42,232
24,044
62,340
503,400
5,562
44,578
26,532
65,837
505,800
5,562
47,177
28,878
69,441
508,400
-17.4%
6.9%
7.4%
-8.0%
1.4%
-15.2%
-7.2%
-6.3%
-0.6%
-8.1%
6.3%
2.7%
1.0%
4.9%
5.6%
10.3%
5.6%
0.5%
5.8%
8.8%
5.5%
0.5%
30.3%
23.2%
76%
9.6%
11.9%
26.1%
17.9%
68%
10.9%
12.9%
27.3%
27.5%
27.6%
10.5%
12.4%
11.2%
13.0%
11.8%
13.7%
1.3%
1.0%
-0.4%
-0.5%
0.6%
0.6%
0.7%
0.6%
Market Cap
Bloomberg ticker
17,510.98
ACA FP
Reuters ticker
CAGR.PA
Share price
Analyst
EUR
7.01
James Chappell
james.chappell@berenberg.com
+44 20 3207 7844
-89.4%
-54.5%
43.1%
-1.2%
83
Model still needs to change: Credit Suisses (CS) share price has
risen 25% ytd but with Wealth Management (WM) margins continuing
to fall and leverage issues still to address, we see little reason to be
optimistic given the market and regulatory headwinds that CS faces.
Sell
Risks to our view: The main risk to our view is that our revenue
estimates are too low. For both the private and investment banking
businesses, this could be driven by higher client activity helped by
better economic growth than expected.
2011
2012
2013E
2014E
2015E
1.36
1.81
27.59
20.32
0.75
1,220
14.9x
1.33x
5.2
7.1
2.8
55
0.80
2.66
27.44
20.77
0.75
1,294
10.2x
1.31x
3.2
4.3
2.8
94
1.74
1.74
25.96
20.64
0.75
1,660
15.5x
1.31x
7.5
9.6
2.8
43
1.92
1.92
26.52
21.32
0.75
1,700
14.1x
1.27x
7.3
9.2
2.8
39
2.16
2.16
27.32
22.23
0.75
1,740
12.5x
1.22x
8.0
9.9
2.8
35
84
Rating system
Relative
Current price
Price target
CHF 27.12
CHF 13.00
2013e
2014e
2015e
old % old % old %
Income 25066 - 24978 - 24695 5262
5498
PPOP 4926
1.74
1.92
2.16
EPS
Source: Berenberg estimates
Share data
1,660
6,239,293
Performance data
High 52 weeks (CHF)
Low 52 weeks (CHF)
Relative performance to SXXP
1 month
-2.5 %
3 months
3.9 %
12 months
13.2 %
29
16
SMI
-0.2 %
3.5 %
7.8 %
12 June 2013
James Chappell
Analyst
+44 20 3207 7844
james.chappell@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Financials
Market ratios; per share data (CHF)
EPS (reported)
TBVPS (reported)
2011
1.36
20.3
2012e
0.80
20.8
2013e
1.74
20.6
2014e
1.92
21.3
2015e
2.16
22.2
18.2
27.6
0.75
14.9x
20.6
27.4
0.75
10.2x
20.6
26.0
0.75
15.5x
21.3
26.5
0.75
14.1x
22.2
27.3
0.75
12.5x
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
1.33x
0.98x
2.8%
55%
1,207
1.31x
0.99x
2.8%
94%
1,307
1.31x
1.04x
2.8%
43%
1,683
1.27x
1.02x
2.8%
39%
1,680
1.22x
0.99x
2.8%
35%
1,720
2011
2012e
2013e
2014e
2015e
Market Cap
Bloomberg ticker
35,088
CSGN VX
Reuters ticker
CSGN:VX
Share price
Analyst
CHF
27.12
James Chappell
james.chappell@berenberg.com
+44 20 3207 7844
10/11
11/12
12/13
13/14
Net revenues
Operating expenses
Pre-provision op. profits (PPoP)
Loan loss charge (LLC)
Reported profit before tax
Taxation
Minorities + Preferences
Attributable profits (reported)
Dividends on preference shares
Adj. attributable profit
26,225
-22,577
3,648
-187
3,461
-671
-837
1,953
-216
1,737
23,966
-21,615
2,351
-170
2,181
-496
-336
1,349
-231
1,118
25,037
-20,140
4,897
-172
4,725
-1,226
-312
3,187
-250
2,937
24,978
-19,716
5,262
-203
5,059
-1,265
-312
3,482
-250
3,232
24,695
-19,197
5,498
-203
5,295
-1,324
-312
3,659
-250
3,409
2.52%
19.5x
86.1%
-2.17%
-0.08%
0.7%
19.4%
7.0%
5.2%
0.17%
42.3x
0.72%
2.43%
13.8x
90.2%
-2.19%
-0.07%
0.7%
22.7%
4.2%
3.1%
0.12%
34.4x
0.50%
2.68%
28.5x
80.4%
-2.15%
-0.07%
0.7%
25.9%
8.6%
6.8%
0.31%
27.6x
0.98%
2.62%
25.9x
78.9%
-2.07%
-0.08%
0.8%
25.0%
8.9%
7.2%
0.34%
26.6x
1.21%
2.54%
27.1x
77.7%
-1.98%
-0.08%
0.8%
25.0%
8.8%
7.2%
0.35%
25.3x
1.28%
2011
2012e
2013e
2014e
2015e
-16.4%
-5.8%
-50.8%
-336.7%
-53.8%
-56.7%
-8.6%
-4.3%
-35.6%
-9.1%
-37.0%
-26.1%
4.5%
-6.8%
108.3%
1.2%
116.6%
147.1%
-0.2%
-2.1%
7.4%
18.0%
7.1%
3.2%
-61.8%
-30.9%
136.3%
9.2%
-64.9%
-35.6%
162.7%
10.0%
10/11
11/12
12/13
13/14
5.0%
2.4%
1.7%
233,413
1,049,165
242,223
924,280
254,334
946,618
254,334
962,347
254,334
978,863
313,401
188,771
7,411
33,674
24,795
25,953
241,753
308,312
166,775
6,786
35,498
26,866
34,768
224,296
320,644
165,384
7,121
43,088
34,248
50,344
299,616
320,644
165,384
7,121
45,075
36,235
36,235
267,305
320,644
165,384
7,121
47,522
38,682
32,782
267,305
9.0%
-3.4%
-23.9%
1.2%
1.7%
-2.5%
10.5%
-1.6%
-11.7%
-8.4%
5.4%
8.4%
34.0%
-7.2%
21.4%
27.5%
44.8%
33.6%
4.6%
5.8%
-28.0%
-10.8%
23.0%
22.2%
74%
15.2%
10.7%
24.3%
26.2%
79%
19.4%
15.5%
31.7%
26.9%
79%
17.3%
16.8%
27.8%
26.4%
79%
14.1%
13.6%
27.3%
26.0%
79%
12.8%
12.3%
8.7%
4.9%
-2.1%
-11.7%
-11.8%
5.3%
17.8%
5.5%
27.4%
44.4%
30.4%
2.5%
1.0%
-10.8%
8.4%
-12.2%
-1.6%
85
4.0%
-0.8%
-18.4%
-19.3%
2011
2012
2013E
2014E
2015E
1.9
2.5
135.7
115.6
0.0
879
45.7x
0.98x
1.5
2.2
0.0
0
5.0
5.5
137.9
119.4
0.0
1,003
20.7x
0.95x
3.7
4.7
0.0
0
8.3
8.7
146.3
127.8
0.0
1,000
13.0x
0.89x
5.8
7.0
0.0
0
8.8
9.2
152.4
133.9
2.6
1,000
12.3x
0.85x
5.9
7.0
0.0
0
9.2
9.7
158.9
140.3
2.8
1,000
11.7x
0.81x
5.9
7.1
0.0
0
86
Sell
Rating system
Relative
Current price
Price target
DKK 113.50
DKK 82.00
10/06/2013
NASDAQ
Copenhagen Close
Market cap DKK 113,500 m
Reuters
DANSKE.CO
Bloomberg
DANSKE DC
OMX
2013e
2014e
2015e
old % old % old %
Income 47091 - 47811 - 48317 PPOP 19601 - 20320 - 20827 8.71
9.20
9.68
EPS
Source: Berenberg estimates
Share data
1,000
2,784,000
Performance data
High 52 weeks (DKK)
Low 52 weeks (DKK)
Relative performance to SXXP
1 month
12.2 %
3 months
4.7 %
12 months
9.3 %
115
78
SX7P
13.6 %
6.0 %
1.3 %
12 June 2013
Nick Anderson
Analyst
+44 20 3207 7838
nick.anderson@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Financials
Market ratios; per share data (DKK)
EPS (reported)
EPS (Berenberg adjusted)
TBVPS
BVPS (reported)
DPS
P/E (Berenberg adjusted)
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
Income Statement and Ratios
Year to 31-Dec
Income Summary (DKKm)
Net interest income (NII)
Net fees & commissions
Trading income
Other income
Total income
Operating expenses
Pre-provision op. profits (PPoP)
Loan loss charge (LLC)
Operating Profit
Other non-operating
Exceptionals
Reported profit before tax
Taxation
Minorities + Preferences
Attributable profits (reported)
Adj. attributable profit
Income Ratios (%)
NII/ Average Total Assets
PPoP/LLC
Cost/income ratio
Cost/avg. assets
LLC/avg. loans
LLC/NII
Tax rate
RoTE adjusted (%)
RoE (stated) (%)
RoA
Asset Leverage (x)
RoRWA
Balance Sheet and Ratios
Year to 31-Dec
Balance Sheet Summary (DKKm)
Customer loans
Total assets
Interest earning assets
Customer deposits
Debt securities & other borrowings
Minorities
Ordinary equity
Tangible equity
Core (Equity) Tier 1 Capital
Risk-weighted assets
Balance Sheet Ratios (%)
RWA/assets
Loans/assets
Loans/deposits
Tier 1 ratio
Core (Equity) Tier 1 ratio
NPL/loans
Provision coverage
2011
1.95
2.48
115.59
135.69
0.00
45.1x
0.97x
0.83x
0.0%
0%
878.6
2012
4.73
5.48
119.39
137.87
0.00
20.4x
0.94x
0.81x
0.0%
0%
945.3
2013e
8.27
8.71
127.77
146.30
0.00
12.9x
0.88x
0.77x
0.0%
0%
1,000.3
2014e
8.76
9.20
133.88
152.41
2.63
12.2x
0.84x
0.73x
2.3%
30%
1,000.0
2015e
9.24
9.68
140.33
158.86
2.77
11.6x
0.80x
0.71x
2.5%
30%
1,000.0
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
23,537
8,298
7,325
4,217
43,377
-25,987
17,390
-13,185
4,205
0
0
4,205
-2,482
-11
1,712
2,181
24,788
8,782
8,901
5,215
47,686
-26,588
21,098
-12,529
8,569
0
0
8,569
-3,819
-4
4,746
5,185
25,039
8,815
6,770
4,868
45,491
-25,890
19,601
-8,117
11,484
0
0
11,484
-3,215
0
8,268
8,708
25,489
8,880
6,919
4,923
46,211
-25,890
20,320
-8,149
12,171
0
0
12,171
-3,408
0
8,763
9,203
25,927
8,948
6,919
4,923
46,717
-25,890
20,827
-7,990
12,837
0
0
12,837
-3,594
0
9,242
9,682
5.3%
5.8%
21.5%
23.7%
9.9%
2.3%
21.3%
-5.0%
103.8%
1.0%
0.4%
-23.9%
-6.7%
-4.6%
-2.6%
-7.1%
-35.2%
34.0%
1.8%
0.7%
2.2%
1.1%
1.6%
0.0%
3.7%
0.4%
6.0%
1.7%
0.8%
0.0%
0.0%
1.1%
0.0%
2.5%
-2.0%
5.5%
103.8%
53.9%
34.0%
-15.8%
6.0%
6.0%
5.5%
5.5%
177.2%
137.7%
74.2%
68.0%
6.0%
5.7%
5.5%
5.2%
1.03%
1.3x
59.9%
0.86%
0.79%
56.0%
59.0%
2.2%
1.5%
0.05%
41.5x
0.20%
1.00%
1.7x
55.8%
0.81%
0.74%
50.5%
44.6%
4.7%
3.7%
0.14%
34.7x
0.54%
0.99%
2.4x
56.9%
0.78%
0.48%
32.4%
28.0%
7.0%
5.8%
0.24%
29.9x
1.00%
0.99%
2.5x
56.0%
0.77%
0.48%
32.0%
28.0%
7.0%
5.9%
0.25%
28.6x
1.05%
0.98%
2.6x
55.4%
0.76%
0.46%
30.8%
28.0%
7.1%
5.9%
0.26%
27.6x
1.09%
-0.03%
-0.01%
0.00%
0.00%
-4.2%
-0.05%
-0.05%
1.2%
-0.02%
-0.26%
-0.9%
-0.01%
-0.01%
-0.6%
-0.01%
-0.02%
-14.5%
2.5%
-16.6%
2.4%
0.0%
0.0%
0.0%
0.0%
0.08%
0.10%
0.01%
0.01%
0.34%
0.46%
0.04%
0.04%
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
1,698,025
3,424,403
1,674,390
3,485,181
1,695,788
3,529,720
1,722,476
3,585,271
1,750,306
3,643,197
-1.4%
1.8%
1.3%
1.3%
1.6%
1.6%
1.6%
1.6%
848,994
991,947
60
125,795
107,164
106,826
905,979
929,092
1,022,115
4
138,230
119,700
119,097
819,436
146,301
127,771
127,201
829,908
152,412
133,882
133,312
842,969
158,858
140,328
139,758
856,589
9.9%
11.7%
11.5%
-9.6%
5.8%
6.7%
6.8%
1.3%
4.2%
4.8%
4.8%
1.6%
4.2%
4.8%
4.8%
1.6%
26.5%
49.6%
200%
16.0%
11.8%
4.93%
42.9%
23.5%
48.0%
180%
18.9%
14.5%
3.79%
52.0%
23.5%
48.0%
23.5%
48.0%
23.5%
48.0%
-2.9%
-1.5%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
19.9%
15.3%
20.5%
15.8%
20.9%
16.3%
2.9%
2.7%
1.0%
0.8%
0.6%
0.5%
0.4%
0.5%
87
Market Cap
DKKm
112,000
Bloomberg ticker
DANSKE DC
Reuters ticker
DANSKE.CO
Share price
DKK 112
Analyst
Nick Anderson
nick.anderson@berenberg.com
+44 20 3207 7838
Deutsche Bank AG
Banking
Too much leverage: While the market took the capital raise at
Deutsche Bank (DBK) positively, we still believe DBK depends on
leverage to deliver double-digit returns. With retained profits unlikely
to reduce these ratios in the near term, we still believe DBK is likely to
need to resort to outside equity to reduce this as regulatory pressure
continues to grow.
Capital raise all well and good, but leverage issues remain:
DBKs capital raise was warmly received by the market and will add
another 70bp to its Basel III CT1 ratio of 8.8% as of Q1 2013.
However, we still remain concerned about the leverage in the
business. On our estimates, DBK has a Basel III leverage ratio of
2.0%, post the 2.9bn raising. To get above the 3% level, required by
2019, requires four years worth of profits and, in our view, delays
dividends.
On our leverage ratios DBK is in the bottom three: On our pain
and plain leverage ratios (tangible equity/tangible assets), DBK
scores in the bottom three among US/European banks. While DBK
might point to its assets being less risky than peers, the fact that Level
3 assets equate to 96% of TBV does little to persuade us of the fact.
Leverage and revenue headwinds make DBK expensive: DBK is
trading on 7.6x 2014 consensus EPS, 0.75x TBV for a consensus
forecast ROTE of 10.1% in 2014, which we believe is more than fully
valued given the leverage in the model and the regulatory/market
headwinds DBK faces.
Estimates cut to reflect capital raise and revenue headwinds: We
cut our EPS estimates to reflect the 10% dilutive 2.9bn capital raise
completed in April and the structural revenue headwinds we believe
the sector faces, particularly in FICC where revenues continue to fall.
Price target of 23 points to 36% downside and 16bn capital
shortfall: Our price target on DBK rises by 3 to 23 due to the
2.9bn capital raise completed in April. Our price target is calculated
using a capital allocation sum-of-the-parts and this shows a 16bn
capital shortfall, mainly driven by the Investment Bank. This is 4bn
lower than our previous estimate, mainly due to the capital raising.
Risks to our view: The main risk to our view is that our revenue
estimates are too low. For the retail and commercial businesses, this
could be driven by interest rates rising or yield curves steepening. For
CIB revenues, this could be driven by higher client activity helped by
better economic growth than expected.
2011
2012
2013E
2014E
2015E
4.28
4.28
55.77
39.26
0.75
957
8.5x
0.92x
8.1
11.7
2.1
18
0.41
0.41
56.26
41.44
0.75
960
88.1x
0.88x
0.7
1.0
2.1
182
2.50
2.50
57.84
43.90
0.75
1,020
14.5x
0.83x
4.5
6.0
2.1
30
3.17
3.17
60.27
46.32
0.75
1,020
11.4x
0.78x
5.4
7.0
2.1
24
4.79
4.79
64.30
50.36
0.75
1,020
7.6x
0.72x
7.7
9.9
2.1
16
88
Sell
Rating system
Relative
Current price
Price target
EUR 36.27
EUR 23.00
2013e
2014e
2015e
old % old % old %
31957
3.0
31657
-1.1
31454
-1.7
Income
PPOP 5198 -1.5 6587 -6.5 9036 -5.8
2.60 -4.1 3.79 -16.4 5.64 -15.1
EPS
Source: Berenberg estimates
Share data
1,020
6,994,427
Performance data
High 52 weeks (EUR)
Low 52 weeks (EUR)
Relative performance to SXXP
1 month
2.5 %
3 months
6.0 %
12 months
0.5 %
39
23
DAX
0.8 %
5.0 %
-3.1 %
12 June 2013
James Chappell
Analyst
+44 20 3207 7844
james.chappell@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Deutsche Bank AG
Banking
Financials
Market ratios; per share data (EUR)
EPS (reported)
TBVPS (reported)
BVPS (reported)
DPS
P/E (Berenberg adjusted)
2011
4.28
39.3
55.8
0.75
8.5x
2012
0.41
41.4
56.3
0.75
88.1x
2013e
2.50
43.9
57.8
0.75
14.5x
2014e
3.17
46.3
60.3
0.75
11.4x
2015e
4.79
50.4
64.3
0.75
7.6x
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
0.92x
0.65x
2.1%
18%
930
0.88x
0.64x
2.1%
182%
930
0.83x
0.63x
2.1%
30%
1,020
0.78x
0.60x
2.1%
24%
1,020
0.72x
0.56x
2.1%
16%
1,020
2011
2012
2013e
2014e
2015e
Market Cap
Bloomberg ticker
Reuters ticker
33,708
DBK GY
DBKGn.DE
Share price
Analyst
EUR
36.27
James Chappell
james.chappell@berenberg.com
+44 20 3207 7844
10/11
11/12
12/13
13/14
-5.0%
33,863
32,925
31,294
30,913
16.3%
1.9%
-2.8%
-25,998
-31,200
-27,806
-25,136
-22,404
11.5%
20.0%
-10.9%
-9.6%
7,230
-1,840
5,390
2,663
-1,721
942
5,119
-1,364
3,755
6,157
-1,412
4,746
8,508
-1,378
7,131
37.7%
44.4%
35.6%
-63.2%
-6.5%
-82.5%
92.2%
-20.7%
298.6%
20.3%
3.5%
26.4%
5,390
-1,064
-194
4,132
942
-493
-54
395
3,755
-1,169
-40
2,546
4,746
-1,471
-40
3,234
7,131
-2,210
-40
4,880
35.6%
-35.3%
-82.5%
-53.7%
298.6%
137.0%
26.4%
25.9%
78.9%
-90.4%
544.6%
27.0%
1.63%
3.9x
78.2%
1.28%
0.45%
5.5%
19.7%
11.0%
8.1%
0.19%
57.6x
1.08%
1.62%
1.5x
92.1%
1.49%
0.42%
5.1%
52.3%
1.0%
0.7%
0.02%
50.8x
0.12%
1.63%
3.8x
84.5%
1.38%
1.55%
4.4x
80.3%
1.25%
1.53%
6.2x
72.5%
1.11%
4.1%
31.1%
5.7%
4.5%
0.13%
45.2x
0.79%
4.5%
31.0%
6.8%
5.4%
0.16%
42.7x
1.01%
4.5%
31.0%
9.5%
7.7%
0.24%
39.2x
1.56%
2011
2012
2013e
2014e
2015e
10/11
11/12
12/13
13/14
17.6%
19.1%
69%
12.9%
10%
2,022,275
2,021,507
2,015,998
0
2,014,361
13.6%
-6.6%
0.0%
-0.3%
9.4%
13.1%
21.2%
10.1%
1.1%
5.8%
4.5%
-12.4%
9.2%
12.5%
11.8%
-3.8%
4.2%
5.5%
3.3%
0.1%
239
54,001
39,782
37,957
334,000
239
58,979
44,760
42,420
321,145
239
61,449
47,230
43,813
321,459
0
0
239
65,565
51,346
47,929
313,651
16.5%
0.0%
15.9%
0.0%
15.9%
0.0%
15.6%
0.0%
15.1%
11.4%
17.1%
13.2%
17.6%
13.6%
19.3%
15.3%
89
DNB ASA
Banking
DNB has one of the strongest balance sheets among European banks,
yet the regulator wants more. This reflects, in our view, the unusual
risk profile of the Norwegian economy and therefore the bank. Being
a play on global liquidity, Norway/DNB is at risk from any tapering
by the various expansionary central banks. For now, DNBs near-term
growth opportunities and Nordic virtues will sustain outperformance
but longer-term, the risks remain material.
Capital strength but regulator wants more: As per our analysis,
DNB has the third-strongest balance sheet overall among European
commercial banks, and on the pain ratio, it is one of only three to
clear the 4% threshold. It also has the most liquid balance sheet.
Transplanted to Sweden, it would report a c16% fully-loaded Basel III
ratio. The regulator, however, remains concerned about the build-up
of risk in Norway, most noticeably in the housing market, and so it
does everything it can to force the Norwegian banks to hold more.
Nordic virtues: DNB has demonstrated the classic Nordic virtues of
a strong track record managing credit risk and its cost base. We also
like its limited direct exposure to the Eurozone.
2011
2012
2013E
2014E
2015E
8.0
8.2
72.3
69.2
2.0
1,629
11.2x
1.33x
11.4
12.4
0.0
0
8.4
8.5
78.6
75.7
2.1
1,629
10.8x
1.22x
11.2
11.9
0.0
0
8.4
8.4
84.2
81.3
2.8
1,629
11.0x
1.13x
10.2
10.6
0.0
0
9.6
9.6
90.6
87.7
3.2
1,629
9.6x
1.05x
11.0
11.3
0.0
0
10.0
10.0
95.6
92.7
5.0
1,629
9.2x
0.99x
10.7
11.1
0.1
1
90
Buy
Rating system
Relative
Current price
Price target
NOK 92.00
NOK 88.00
2013e
2014e
2015e
old % old % old %
42815
45606
46822
Income
PPOP 21794 - 24388 - 25407 8.37
9.59
10.01
EPS
Source: Berenberg estimates
Share data
1,629
1,837,000
Performance data
High 52 weeks (NOK)
Low 52 weeks (NOK)
Relative performance to SXXP
1 month
-1.5 %
3 months
1.9 %
12 months
37.5 %
98
55
SX7P
-0.2 %
3.2 %
29.5 %
12 June 2013
Nick Anderson
Analyst
+44 20 3207 7838
nick.anderson@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
DNB ASA
Banking
Financials
Market ratios; per share data (NOK)
EPS (reported)
EPS (Berenberg adjusted)
2011
7.97
8.21
2012
8.37
8.54
2013e
8.37
8.37
2014e
9.59
9.59
2015e
10.01
10.01
TBVPS
BVPS (reported)
DPS
P/E (Berenberg adjusted)
69.16
72.33
2.00
11.3x
75.71
78.61
2.10
10.8x
81.32
84.21
2.76
11.1x
87.74
90.64
3.17
9.6x
92.75
95.65
5.01
9.2x
Reuters ticker
DNB.OL
Share price
NOK
92.55
Analyst
Nick Anderson
nick.anderson@berenberg.com
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
1.34x
1.28x
2.2%
25%
1,629
1.22x
1.18x
2.3%
25%
1,629
1.14x
1.10x
3.0%
33%
1,629
1.05x
1.02x
3.4%
33%
1,629
1.00x
0.97x
5.4%
50%
1,629
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
25,251
6,878
7,660
2,217
42,006
-19,789
22,217
-3,442
18,775
-380
13
18,408
-5,423
0
12,985
13,365
27,216
6,962
3,909
3,630
41,717
-20,693
21,024
-3,179
17,845
-287
95
17,653
-4,028
0
13,625
13,912
28,393
29,890
30,886
4.3%
5.3%
3.3%
14,422
42,815
-21,021
21,794
-3,380
18,414
0
0
18,414
-4,788
0
13,626
13,626
15,716
45,606
-21,217
24,388
-3,275
21,113
0
0
21,113
-5,489
0
15,624
15,624
15,936
46,822
-21,415
25,407
-3,370
22,037
0
0
22,037
-5,730
0
16,307
16,307
7.8%
1.2%
-49.0%
63.7%
-0.7%
4.6%
-5.4%
-7.6%
-5.0%
-24.5%
630.8%
-4.1%
-25.7%
297.3%
2.6%
1.6%
3.7%
6.3%
3.2%
9.0%
6.5%
0.9%
11.9%
-3.1%
14.7%
1.4%
2.7%
0.9%
4.2%
2.9%
4.4%
4.3%
18.9%
14.7%
14.7%
4.4%
4.4%
4.9%
4.1%
0.0%
-2.1%
14.7%
14.7%
4.4%
4.4%
1.18%
6.5x
47.1%
0.92%
0.29%
13.6%
28.9%
12.4%
11.4%
0.60%
20.5x
1.21%
1.15%
6.6x
49.6%
0.88%
0.25%
11.7%
22.6%
11.9%
11.2%
0.58%
20.7x
1.23%
1.22%
6.4x
49.1%
0.90%
0.26%
11.9%
26.0%
10.6%
10.2%
0.59%
18.0x
1.23%
1.24%
7.4x
46.5%
0.88%
0.24%
11.0%
26.0%
11.3%
11.0%
0.65%
17.5x
1.36%
1.24%
7.5x
45.7%
0.86%
0.24%
10.9%
26.0%
11.1%
10.7%
0.65%
17.0x
1.38%
-0.02%
0.07%
0.02%
0.00%
2.5%
-0.05%
-0.04%
-2.0%
-6.3%
-0.5%
-0.2%
-0.03%
-0.5%
0.03%
0.01%
0.2%
3.4%
-1.4%
-1.0%
0.01%
-2.6%
-0.03%
-0.02%
-0.9%
0.0%
0.8%
0.8%
0.06%
-0.8%
-0.02%
0.00%
0.0%
0.0%
-0.3%
-0.2%
0.01%
0.02%
0.00%
0.13%
0.01%
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
1,279,259
2,126,098
1,297,892
2,264,845
1,358,932
2,371,360
1,405,226
2,452,144
1,453,212
2,535,881
1.5%
6.5%
4.7%
4.7%
3.4%
3.4%
3.4%
3.4%
740,036
659,320
0
117,815
112,641
104,191
1,061,772
810,959
729,137
0
128,036
123,319
115,627
1,023,825
49.9%
60.2%
173%
10.4%
9.8%
2.27%
40.4%
45.2%
57.3%
160%
11.6%
11.3%
2.25%
40.4%
Market Cap
Bloomberg ticker
NOKm
150,745
DNB NO
9.6%
10.6%
137,166
132,449
124,757
1,043,398
147,634
142,917
135,225
1,078,943
155,787
151,070
143,378
1,115,787
8.7%
9.5%
11.0%
-3.6%
7.1%
7.4%
7.9%
1.9%
7.6%
7.9%
8.4%
3.4%
5.5%
5.7%
6.0%
3.4%
44.0%
57.3%
44.0%
57.3%
44.0%
57.3%
-4.7%
-2.9%
-1.2%
0.0%
0.0%
0.0%
0.0%
0.0%
12.3%
12.0%
12.8%
12.5%
13.1%
12.8%
1.2%
1.5%
0.7%
0.7%
0.6%
0.6%
0.3%
0.3%
91
EFG International AG
Small/Mid-Cap: Banking
Building capital
2011
2012
2013E
2014E
2015E
-2.32
0.30
7.3
5.2
0.10
134
38.2x
2.18x
2.6
3.0
0.9
33
79
-1.7
0.70
0.62
8.3
6.7
0.10
146
18.5x
1.72x
5.8
6.4
0.9
16
79
0.2
0.85
0.88
11.4
9.8
0.10
146
13.0x
1.17x
8.0
8.6
0.9
11
87
5.7
1.17
1.19
12.4
10.9
0.10
146
9.6x
1.05x
10.6
11.0
0.9
8
95
6.2
1.41
1.44
13.7
12.2
0.10
146
8.0x
0.94x
12.5
12.5
0.9
7
104
7.8
92
Buy
Rating system
Relative
Current price
Price target
CHF 11.45
CHF 13.50
2013e
2014e
old % old %
780
848
Income
168
223
Op Pr
0.88
1.19
EPS
Source: Berenberg estimates
Share data
2015e
old %
930
267
1.44
-
146,659
89,285
Performance data
High 52 weeks (CHF)
Low 52 weeks (CHF)
Relative performance to SXXP
1 month
-8.2 %
3 months
-12.6 %
12 months
59.3 %
13
5
SX7P
-6.9 %
-11.3 %
51.2 %
12 June 2013
Eleni Papoula
Analyst
+44 20 3465 2741
eleni.papoula@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
EFG International AG
Small/Mid-Cap: Banking
Financials
EFG International
Market ratios and per share data (CHF)
EPS reported
EPS (Berenberg adjusted)
2011
-2.32
0.30
2012 E
0.70
0.62
5.25
7.35
0.10
38.15
2013 E
0.85
0.88
2014 E
1.17
1.19
2015 E
1.41
1.44
6.66
9.79
10.88
12.21
Reuters ticker
8.26
0.10
18.46
11.37
0.10
13.02
12.43
0.10
9.61
13.74
0.10
7.96
Rating
Analyst
Share price (CHF)
2.18
1.56
3.0
0.9
33.3
134
1.72
1.39
6.4
0.9
16.1
146
1.17
1.01
8.6
0.9
11.4
146
1.05
0.92
11.0
0.9
8.4
146
0.94
0.83
12.5
0.9
7.0
146
2011
2012 E
2013 E
2014 E
2015 E
80.9
567
79.3
477
83.1
487
90.7
496
99.6
506
2011
2012 E
2013 E
2014 E
2015 E
Phone
email:
11/12
1,679
EFGN SW
EFGN.S
Buy
Eleni Papoula
11.45
13.50
18%
+44 20 3465 2741
eleni.papoula@berenberg.com
12/13
13/14
14/15
9.2
2.0
9.7
2.0
13/14
14/15
4.5
9.2
9.2
36.1
8.7
2.2
32.2
0.0
na
4.0
11.8
9.7
20.1
9.6
6.0
19.9
0.0
na
11/12
12/13
212
454
83
15
763
-699
64
-14
-339
225
492
70
-12
775
-653
121
-5
28
253
449
50
29
780
-612
168
-4
0
265
490
54
39
848
-626
223
-4
0
276
548
60
47
930
-663
267
-4
0
-289
-2
-17
-311
40
144
-20
-13
98
91
165
-23
0
125
128
219
-31
0
170
174
263
-37
0
206
210
-149.7
857.1
-24.4
-131.6
124.8
14.5
14.7
na
26.8
41.7
32.9
32.9
na
36.6
35.5
20.2
20.2
na
21.2
20.7
-8.5
-5.6
1.6
-46.6
-58.1
-79.9
8.3
1.5
-6.6
90.0
-131.6
124.8
-8.8
0.8
-6.3
39.0
26.8
41.7
9.2
8.7
2.2
32.2
36.6
35.5
11.8
9.6
6.0
19.9
21.2
20.7
-197.5
-126.9
-523.3
-293.2
126.7
-256.2
-205.1
-49.3
-3.7
-56.7
-120.3
-66.6
-205.1
1,045.0
-134.9
-17.5
36.7
-14.9
27.9
10.8
169.7
-38.3
-42.2
-41.7
2011
2012 E
2013 E
2014 E
2015 E
11/12
12/13
13/14
14/15
4.0
0.0
2.0
4.0
14.8
16.8
11.6
16.8
2.0
4.0
0.0
2.0
4.0
14.4
17.7
12.7
17.7
2.0
0.0
2.0
0.0
14.5
14.5
0.0
2.0
0.0
15.4
15.4
9,548
3,984
21,041
14,398
25
235
711
235
5,614
10,434
3,298
23,626
16,084
104
719
1,022
719
6,046
11,177
3,298
24,101
17,229
121
925
1,377
925
6,748
11,629
3,298
24,585
17,925
139
1,081
1,537
1,081
6,884
12,098
3,298
25,079
18,649
159
1,273
1,732
1,273
7,022
26.7
45.4
66.3
12.9
4.2
25.6
44.2
64.9
17.2
11.9
28.0
46.4
64.9
13.7
13.7
28.0
47.3
64.9
15.7
15.7
28.0
48.2
64.9
18.1
18.1
93
-4.1
-2.7
-2.2
33.2
183.9
9.4
5.0
0.0
-20.1
15.3
2011
2012
2013E
2014E
2015E
-2.28
1.51
26.1
17.4
0.00
378
15.8x
1.37x
-5.5
8.4
0.0
0
0.87
2.14
26.2
20.8
0.40
394
11.1x
1.15x
3.9
10.3
1.7
19
1.17
1.53
27.2
21.8
0.38
394
15.5x
1.09x
5.0
7.0
1.6
25
1.34
1.70
28.1
22.7
0.43
394
14.0x
1.05x
5.3
7.5
1.8
25
1.29
1.67
29.0
23.6
0.42
394
14.2x
1.01x
5.1
7.1
1.8
25
94
Sell
Rating system
Relative
Current price
Price target
EUR 23.81
EUR 13.00
2013e
2014e
old % old %
6991
6938
Income
2919
PPOP 2919
1.53
1.70
EPS
Source: Berenberg estimates
Share data
2015e
old %
6897
2882
1.67
-
395
691,543
Performance data
High 52 weeks (EUR)
Low 52 weeks (EUR)
Relative performance to SXXP
1 month
-0.1 %
3 months
-4.7 %
12 months
41.2 %
27
13
SX7P
1.3 %
-3.4 %
33.1 %
12 June 2013
Eleni Papoula
Analyst
+44 20 3465 2741
eleni.papoula@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Financials
Erste
Market ratios and per share data (EUR)
EPS (reported)
New EPS (Berenberg adjusted)
2011
-2.28
1.51
2012
0.87
2.14
2013 E
1.17
1.53
2014 E
1.34
1.70
2015 E
1.29
1.67
1.51
1.48
1.65
1.76
1.77
Reuters ticker
Change
TBVPS
BVPS
DPS
0%
17.4
26.1
0.00
45%
20.8
26.2
0.40
-7%
21.8
27.2
0.38
-3%
22.7
28.1
0.43
-6%
23.6
29.0
0.42
Rating
Analyst
Share price (EUR)
Target price (EUR)
15.8
11.1
15.5
14.0
14.2
Upside
P/TBV (x)
P/BV (x)
RoTE adjusted (%)
Dividend yield (%)
Payout ratio (%)
Weighted avg. number of shares (m)
1.37
0.91
8.4
0.0
0.0
378
1.15
0.91
10.3
1.7
18.7
394
1.09
0.88
7.0
1.6
25.0
394
1.05
0.85
7.5
1.8
25.0
394
1.01
0.82
7.1
1.8
25.0
394
Phone
email:
2011
2012
2013 E
2014 E
2015 E
9,395
EBS AV
EBKOF.PK
Sell
Eleni Papoula
23.81
13.00
-45%
5,569
1,787
122
0
7,479
-3,851
-1,683
1,945
-2,267
-322
-240
-156
-719
1,289
570
-141
5,235
1,721
273
0
7,230
-3,757
-692
2,781
-1,980
801
-170
-147
484
361
844
-141
4,919
1,742
330
0
6,991
-3,705
-367
2,919
-1,800
1,119
-277
-238
603
0
603
-141
4,766
1,784
388
0
6,938
-3,691
-328
2,919
-1,672
1,247
-349
-228
670
0
670
-141
4,714
1,795
388
0
6,897
-3,686
-329
2,882
-1,648
1,234
-347
-229
658
0
658
-150
2.88
0.9
51.5
1.9
1.70
40.7
-74.6
8.4
2.66
1.4
52.0
1.8
1.48
37.8
21.2
10.3
2.48
1.6
53.0
1.7
1.37
36.6
24.8
7.0
2.41
1.7
53.2
1.7
1.28
35.1
28.0
7.5
-5.5
0.27
16.8
6.3
3.9
0.40
14.7
8.9
5.0
0.28
14.4
5.9
2011
2012
2013 E
11/12
12/13
13/14
14/15
-3.1
2.4
17.6
na
-0.8
-0.4
-1.1
0.6
0.0
na
-0.6
-0.1
43.0
-12.7
-348.7
-29.2
-5.7
-167.3
5.0
-9.1
39.6
63.0
61.6
24.7
0.0
-7.1
11.5
25.8
-4.1
11.0
-1.3
-1.4
-1.1
-0.6
0.1
-1.7
48.2
0.0
-28.5
0.0
11.0
0.0
-1.7
6.3
2.37
1.7
53.4
1.7
1.25
35.0
28.1
7.1
-7.7
63.7
0.9
-4.3
-12.5
-7.1
-128.5
21.9
-6.5
15.4
2.0
-2.2
-7.7
-3.2
16.7
-31.9
-3.2
7.7
0.4
-0.6
-6.9
-4.1
12.9
6.6
-1.4
0.2
0.5
-0.6
-1.9
-0.3
0.4
-5.4
5.3
0.31
14.1
6.4
5.1
0.31
13.8
6.0
-170.2
45.4
-12.4
41.7
30.1
-29.2
-2.3
-33.6
4.5
10.8
-2.0
7.7
-3.2
-2.2
-1.8
-4.9
2014 E
2015 E
11/12
12/13
13/14
14/15
131,928
213,824
198,203
123,053
29,427
3,483
16,338
8,197
11,848
10,084
105,323
130,768
213,698
197,776
124,904
29,811
3,518
16,741
8,601
12,120
10,356
104,378
131,386
214,707
198,394
126,342
29,811
3,518
17,102
8,962
12,481
10,717
104,739
132,039
215,775
199,047
127,821
29,811
3,518
17,446
9,306
12,825
11,061
105,122
-2.1
1.8
1.2
3.5
-4.4
10.8
7.6
21.6
10.9
13.1
-7.6
-0.9
-0.1
-0.2
1.5
1.3
1.0
2.5
4.9
2.3
2.7
-0.9
0.5
0.5
0.3
1.2
0.0
0.0
2.2
4.2
3.0
3.5
0.3
0.5
0.5
0.3
1.2
0.0
0.0
2.0
3.8
2.8
3.2
0.4
54.3
64.2
113.3
13.3
9.4
7.8
8.5
49.3
61.7
107.2
15.5
11.2
9.6
9.2
48.8
61.2
104.7
16.0
11.6
9.9
8.5
48.8
61.2
104.0
16.3
11.9
10.2
8.1
48.7
61.2
103.3
16.6
12.2
10.5
8.0
-9.3
-3.8
-5.4
16.5
20.1
22.4
8.5
-0.8
-0.8
-2.3
3.4
3.2
3.6
-6.8
-0.1
0.0
-0.7
1.8
2.6
3.1
-5.4
-0.1
0.0
-0.7
1.6
2.4
2.8
-0.7
Svenska Handelsbanken AB
Banking
20:20 vision
2011
2012
2013E
2014E
2015E
19.2
19.2
151.5
141.3
9.8
623
14.8x
2.01x
13.8
14.8
0.0
0
21.6
21.6
164.1
154.2
10.8
628
13.2x
1.84x
14.8
15.9
0.0
0
21.4
21.4
163.6
153.8
10.9
634
13.3x
1.85x
13.3
14.2
0.0
1
22.4
22.4
175.0
165.2
11.4
635
12.7x
1.72x
13.5
14.3
0.0
1
23.4
23.4
187.0
177.1
11.9
635
12.1x
1.60x
13.2
14.0
0.0
1
96
Hold
Rating system
Relative
Current price
Price target
SEK 284.20
SEK 250.00
10/06/2013
NASDAQ
Stockholm Close
Market cap SEK 180,353 m
Reuters
SHBa.ST
Bloomberg
SHBA SS
OMX
2013e
2014e
2015e
old % old % old %
Income 35506 1.0 36817 1.7 38109 1.6
PPOP 19373 -1.6 20326 -0.2 21268 -0.2
21.36 0.1 22.36 0.0 23.39 0.1
EPS
Source: Berenberg estimates
Share data
635
1,143,000
Performance data
High 52 weeks (SEK)
Low 52 weeks (SEK)
Relative performance to SXXP
1 month
-1.5 %
3 months
1.0 %
12 months
8.7 %
302
209
SX7P
-0.2 %
2.3 %
0.7 %
12 June 2013
Nick Anderson
Analyst
+44 20 3207 7838
nick.anderson@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Svenska Handelsbanken AB
Banking
Financials
Market ratios; per share data (SEK)
EPS (reported)
EPS (Berenberg adjusted)
TBVPS
BVPS (reported)
DPS
P/E (Berenberg adjusted)
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
2011
19.18
19.18
2012
21.60
21.60
2013e
21.38
21.38
2014e
22.37
22.37
2015e
23.40
23.40
Market Cap
Bloomberg ticker
141.30
151.48
9.75
14.9x
154.20
164.11
10.75
13.2x
153.78
163.59
10.92
13.3x
165.20
175.01
11.42
12.7x
177.14
186.95
11.94
12.2x
Reuters ticker
SHBa.ST
Share price
SEK
284.9
Analyst
Nick Anderson
nick.anderson@berenberg.com
2.02x
1.88x
3.4%
49%
623.1
1.85x
1.74x
3.8%
48%
628.498
1.85x
1.74x
3.8%
50%
634.225
1.72x
1.63x
4.0%
50%
634.6
1.61x
1.52x
4.2%
50%
634.6
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
23,613
7,673
1,016
507
32,809
-15,464
17,345
-816
16,529
7
159
16,695
-4,372
0
12,323
12,323
26,081
7,369
1,120
492
35,062
-16,700
18,362
-1,251
17,111
-3
22
17,130
-3,092
-1
14,037
14,037
26,584
7,540
1,182
553
35,859
-16,789
19,069
-1,427
17,643
1
15
17,659
-3,813
0
13,846
13,846
27,717
7,754
1,389
575
37,435
-17,154
20,281
-1,702
18,579
0
0
18,579
-4,087
0
14,492
14,492
28,827
7,943
1,371
585
38,726
-17,501
21,225
-1,792
19,432
0
0
19,432
-4,275
0
15,157
15,157
10.5%
-4.0%
10.2%
-3.0%
6.9%
8.0%
5.9%
53.3%
3.5%
1.9%
2.3%
5.5%
12.4%
2.3%
0.5%
3.9%
14.1%
3.1%
4.3%
2.8%
17.5%
4.0%
4.4%
2.2%
6.4%
19.3%
5.3%
4.0%
2.4%
-1.3%
1.7%
3.4%
2.0%
4.7%
5.3%
4.6%
2.6%
-29.3%
3.1%
23.3%
5.2%
7.2%
4.6%
4.6%
13.9%
13.9%
-1.4%
-1.4%
4.7%
4.7%
4.6%
4.6%
1.02%
21.3x
47.1%
0.67%
0.05%
3.5%
26.5%
14.8%
13.8%
0.53%
27.9x
2.35%
1.05%
14.7x
47.6%
0.67%
0.08%
4.8%
18.1%
15.9%
14.8%
0.57%
28.1x
2.83%
1.10%
13.4x
46.8%
0.70%
0.09%
5.4%
21.6%
14.2%
13.3%
0.57%
24.7x
2.85%
1.11%
11.9x
45.8%
0.69%
0.10%
6.1%
22.0%
14.3%
13.5%
0.58%
24.6x
2.90%
1.12%
11.8x
45.2%
0.68%
0.10%
6.2%
22.0%
14.0%
13.2%
0.59%
23.6x
2.94%
0.03%
0.05%
0.01%
0.01%
0.5%
0.01%
0.02%
-0.8%
0.02%
0.01%
-1.0%
-0.01%
0.01%
-0.6%
-0.01%
0.00%
-8.4%
1.1%
3.5%
-1.7%
0.4%
0.1%
0.0%
-0.4%
0.03%
0.01%
0.01%
0.01%
0.47%
0.03%
0.05%
0.04%
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
1,591,128
2,454,366
1,680,479
2,383,951
1,699,565
2,453,145
1,750,027
2,525,983
1,805,279
2,605,733
5.6%
-2.9%
1.1%
2.9%
3.0%
3.0%
3.2%
3.2%
724,888
1,175,391
0
94,524
88,172
79,384
508,317
682,223
1,172,593
2
103,848
97,575
87,207
486,588
20.7%
64.8%
219%
18.4%
15.6%
0.43%
60.7%
20.4%
70.5%
246%
20.4%
17.9%
0.43%
56.4%
SEKm
180,798
SHBA SS
-5.9%
-0.2%
2
103,817
97,588
89,797
492,490
2
111,063
104,834
97,043
507,113
2
118,641
112,412
104,621
523,123
9.9%
10.7%
9.9%
-4.3%
0.0%
0.0%
3.0%
1.2%
7.0%
7.4%
8.1%
3.0%
6.8%
7.2%
7.8%
3.2%
20.1%
69.3%
20.1%
69.3%
20.1%
69.3%
-0.3%
5.7%
-0.3%
5.7%
-0.3%
-1.2%
0.0%
0.0%
20.6%
18.2%
21.4%
19.1%
22.2%
20.0%
2.0%
2.3%
2.0%
2.3%
0.2%
0.3%
0.8%
0.9%
97
Buy
Chg
Risks to our view: The key risks to our view are that our revised
revenue estimates are still too high or that HSBC is hit with additional
regulatory requirements.
2011
2012
2013E
2014E
2015E
91.7
91.7
885.6
708.5
41.0
17,868
11.9x
1.54x
10.6
13.1
3.8
45
74.2
74.2
959.1
804.9
45.0
18,476
14.7x
1.35x
8.1
9.8
4.1
61
96.5
96.5
995.8
845.2
50.0
18,675
11.3x
1.29x
9.9
11.7
4.6
52
106.4
106.4
1,046.0
896.2
55.0
18,675
10.3x
1.22x
10.4
12.2
5.0
52
116.9
116.9
1,107.4
957.6
60.0
18,675
9.3x
1.14x
10.8
12.5
5.5
51
98
Rating system
Relative
Current price
Price target
GBp 700
GBp 790
Share data
18,675
18,685,830
Performance data
High 52 weeks (GBp)
Low 52 weeks (GBp)
Relative performance to SXXP
1 month
-3.6 %
3 months
-4.7 %
12 months
4.0 %
770
511
SX7P
-2.3 %
-3.4 %
-4.1 %
12 June 2013
James Chappell
Analyst
+44 20 3207 7844
james.chappell@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Financials
Market ratios; per share data (USD)
EPS (reported)
EPS (Berenberg adjusted)
2011
91.7
91.7
2012
74.2
74.2
2013e
96.5
96.5
2014e
106.4
106.4
2015e
116.9
116.9
TBVPS
BVPS (reported)
DPS
P/E (Berenberg adjusted)
708
886
41.00
11.9x
805
959
45.00
14.7x
845
996
50.00
11.3x
896
1,046
55.00
10.2x
958
1,107
60.00
9.3x
1.54x
1.23x
3.8%
45%
17,922
1.35x
1.14x
4.1%
61%
18,271
1.29x
1.09x
4.6%
52%
18,700
1.22x
1.04x
5.0%
52%
18,809
1.14x
0.98x
5.5%
51%
18,809
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
Market Cap
Bloomberg ticker
Reuters ticker
Share price
130,764
HSBA LN
GBp
USD
GBP-USD
Analyst
HSBA.L
700
1,090
1.56
James Chappell
james.chappell@berenberg.com
+44 20 3207 7844
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
40,662
31,618
72,280
-41,545
30,735
-12,127
18,608
3,264
21,872
3,928
1,720
27,520
37,672
23,634
61,306
-42,927
18,379
-8,311
10,068
10,581
20,649
5,315
1,880
27,844
36,460
30,606
67,067
-38,814
28,253
-5,884
22,369
2,646
25,015
5,253
1,848
32,117
36,686
31,505
68,191
-38,261
29,930
-5,230
24,701
2,781
27,482
5,771
1,848
35,101
37,480
32,458
69,938
-38,014
31,924
-4,880
27,044
2,925
29,969
6,293
1,848
38,110
-7.4%
-25.3%
-15.2%
3.3%
-40.2%
-31.5%
-45.9%
224.2%
-5.6%
35.3%
9.3%
1.2%
-3.2%
29.5%
9.4%
-9.6%
53.7%
-29.2%
122.2%
-75.0%
21.1%
-1.2%
-1.7%
15.3%
0.6%
2.9%
1.7%
-1.4%
5.9%
-11.1%
10.4%
5.1%
9.9%
9.9%
0.0%
9.3%
2.2%
3.0%
2.6%
-0.6%
6.7%
-6.7%
9.5%
5.2%
9.0%
9.0%
0.0%
8.6%
1.98%
2.5x
57.5%
-1.66%
1.28%
29.8%
-21.1%
13.1%
10.6%
0.65%
20.2x
1.40%
1.69%
2.2x
70.0%
-1.64%
1.22%
22.1%
-52.8%
9.8%
8.1%
0.51%
19.2x
1.15%
2.13%
4.8x
57.9%
-1.44%
0.82%
16.1%
-23.5%
11.7%
9.9%
0.66%
17.7x
1.55%
3.60%
5.7x
56.1%
-1.41%
0.51%
14.3%
-23.4%
12.2%
10.4%
0.73%
16.6x
1.69%
3.58%
6.5x
54.4%
-1.37%
0.47%
13.0%
-23.3%
12.5%
10.8%
0.79%
15.9x
1.84%
-0.28%
0.44%
1.46%
-0.02%
12.5%
0.02%
-0.06%
-7.76%
-31.7%
-3.2%
-2.5%
-0.13%
-12.1%
0.20%
-0.40%
-5.92%
29.3%
1.9%
1.9%
0.15%
-1.8%
0.03%
-0.31%
-1.88%
0.1%
0.4%
0.5%
0.07%
-1.8%
0.04%
-0.05%
-1.23%
0.1%
0.4%
0.4%
0.05%
-0.25%
0.40%
0.13%
0.15%
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
940,429
2,555,579
2,041,799
1,253,925
161,619
7,368
158,725
129,691
122,496
1,209,514
421,101
2,692,538
2,409,414
1,340,014
148,940
7,887
175,242
145,389
138,789
1,123,943
1,006,829
2,707,420
1,006,829
1,375,919
1,032,183
2,730,511
1,032,183
1,455,387
1,060,200
2,828,823
1,060,200
1,499,241
139.1%
0.6%
-58.2%
2.7%
2.5%
0.9%
2.5%
5.8%
2.7%
3.6%
2.7%
3.0%
8,281
186,210
156,357
149,706
1,183,841
8,695
196,735
166,882
162,660
1,172,260
9,130
208,291
178,438
176,630
1,201,705
-55.2%
5.4%
18.0%
6.9%
-7.8%
7.0%
10.4%
12.1%
13.3%
-7.1%
5.0%
6.3%
7.5%
7.9%
5.3%
5.0%
5.7%
6.7%
8.7%
-1.0%
5.0%
5.9%
6.9%
8.6%
2.5%
47.3%
36.8%
75%
11.5%
10.1%
41.7%
15.6%
31%
13.4%
12.3%
43.7%
37.2%
73%
13.7%
12.6%
42.9%
37.8%
71%
15.0%
13.9%
42.5%
37.5%
71%
15.8%
14.7%
-5.6%
-21.2%
-43.6%
1.9%
2.2%
2.0%
21.5%
41.7%
0.3%
0.3%
-0.8%
0.6%
-2.3%
1.2%
1.2%
-0.5%
-0.3%
-0.2%
0.8%
0.8%
99
ING Groep NV
Banking
Risks to our view: 1) The market declines, reducing the valuation for
future insurance sales or reducing interest in potential asset sales. 2)
Significant deterioration in the Dutch housing market causes higher
write-downs. 3) A further deterioration in Spain affects INGs 33bn
exposure.
2011
2012
2013E
2014E
2015E
1.12
1.12
12.34
11.40
0.0
3,782
6.2x
0.61x
13.2
14.7
0.0
0
0.74
0.74
13.62
12.92
0.0
3,802
9.4x
0.54x
8.0
8.5
0.0
0
0.63
0.63
14.07
13.37
0.0
3,811
11.0x
0.52x
4.6
4.8
0.0
0
0.82
0.82
14.42
13.71
0.0
3,811
8.5x
0.51x
5.7
6.0
0.0
0
0.92
0.92
14.85
14.14
0.0
3,811
7.6x
0.49x
6.3
6.6
0.0
0
100
Buy
Rating system
Relative
Current price
Price target
EUR 6.99
EUR 8.00
2013e
2014e
old % old %
Income
PPOP
0.72 -11.6 0.82 -0.7
EPS
Source: Berenberg estimates
Share data
2015e
old %
0.92 -0.7
3,811
17,822,230
Performance data
High 52 weeks (EUR)
Low 52 weeks (EUR)
Relative performance to SXXP
1 month
5.2 %
3 months
8.0 %
12 months
16.9 %
8
5
SX7P
6.5 %
9.3 %
8.9 %
12 June 2013
James Chappell
Analyst
+44 20 3207 7844
james.chappell@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
ING Groep NV
Banking
Financials
Market ratios; per share data (EUR)
EPS (reported)
TBVPS (reported)
BVPS (reported)
DPS
P/E (Berenberg adjusted)
2011
1.12
11.4
12.3
0.00
6.2x
2012
0.74
12.9
13.6
0.00
9.4x
2013e
0.63
13.4
14.1
0.00
11.0x
2014e
0.82
13.7
14.4
0.00
8.5x
2015e
0.92
14.1
14.8
0.00
7.6x
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
0.61x
0.57x
0.0%
0%
3,782
0.54x
0.51x
0.0%
0%
3,802
0.52x
0.50x
0.0%
0%
3,811
0.51x
0.48x
0.0%
0%
3,811
0.49x
0.47x
0.0%
0%
3,811
2011
2012
2013e
2014e
2015e
12,246
11,684
-4.6%
Non-interest income
30,707
29,100
-5.2%
Operating expenses
-37,504
-34,672
-7.6%
5,449
6,112
12.2%
-1,341
-2,124
58.4%
-195
-346
77.4%
Operating Profit
3,913
3,642
Other non-operating
2,944
1,253
-995
-350
6,857
-1,006
-83
5,768
-1,520
4,248
3,642
-844
-111
2,687
-1,125
1,562
4,898
-1,272
-216
3,409
-400
3,009
5,044
-1,311
-265
3,467
-400
3,067
1.22%
4.1x
61.7%
3.96%
0.23%
11.0%
14.7%
9.9%
1317.4%
0.33%
29.7x
1.43%
1.30%
2.9x
61.8%
3.86%
0.38%
18.2%
23.2%
3.2%
800.5%
0.13%
23.7x
0.56%
1.35%
2011
2012
602,525
1,279,228
1,150,303
467,547
168,403
777
46,663
43,105
31,772
297,241
563,404
1,166,193
1,046,069
455,003
168,945
1,081
51,777
49,138
31,494
278,656
23.2%
47.1%
129%
13.0%
10.7%
23.9%
48.3%
124%
13.7%
11.3%
Market Cap
Bloomberg ticker
Reuters ticker
Share price
Analyst
26,576
INGA:NA
ING.AS
EUR
6.99
James Chappell
james.chappell@berenberg.com
+44 20 3207 7844
11/12
12/13
13/14
14/15
-57.4%
-179.4%
-64.8%
-100.0%
5,088
-1,311
-278
3,499
-400
3,099
-46.9%
-16.1%
34.5%
50.7%
3.0%
3.1%
0.9%
0.0%
-53.4%
26.9%
1.7%
0.9%
-63.2%
92.7%
1.9%
1.0%
1.35%
1.35%
0.08%
0.05%
57.5%
56.9%
56.6%
0.1%
-0.10%
0.15%
-4.3%
-3.86%
-0.38%
-0.5%
-0.3%
26.0%
5.9%
458.0%
0.26%
22.5x
1.08%
26.0%
5.9%
574.1%
0.27%
21.9x
1.10%
25.8%
5.8%
627.4%
0.27%
21.3x
1.10%
8.5%
-6.7%
2.8%
2.7%
0.0%
0.0%
-0.2%
-0.1%
-0.20%
0.13%
0.01%
0.00%
-0.87%
0.52%
0.01%
0.00%
2013e
2014e
2015e
11/12
12/13
13/14
14/15
1,146,464
1,146,093
1,145,825
-8.8%
-1.7%
0.0%
0.0%
3,733
53,633
50,942
32,767
277,470
3,655
54,953
52,262
32,789
279,111
3,655
56,577
53,886
33,138
280,966
11.0%
14.0%
-0.9%
-6.3%
3.6%
3.7%
4.0%
-0.4%
2.5%
2.6%
0.1%
0.6%
3.0%
3.1%
1.1%
0.7%
24.2%
24.4%
24.5%
14.3%
11.8%
14.2%
11.7%
14.3%
11.8%
-5.0%
0.7%
0.6%
0.6%
0.5%
-0.1%
-0.1%
0.0%
0.0%
-6.9%
101
Long-term bear case intact: We still believe that the loan losses of
Intesa (like those of Unicredit) will remain higher for longer than
consensus expects on poor asset quality (driven by an oversized SME
sector). We also expect further pressure on net interest income, driven
by weak debt demand and low re-investment yields (NII dropped by
7.3% qoq in Q1 2013, suffering larger erosion than peers).
2011
2012
2013E
2014E
2015E
-0.56
0.17
2.86
1.95
0.05
13,775
7.8x
0.70x
-16.3
6.4
3.7
-9
0.11
0.14
3.02
2.11
0.05
13,775
9.5x
0.64x
3.4
4.8
3.7
44
0.11
0.14
3.06
2.17
0.06
13,775
10.1x
0.63x
3.3
4.6
4.4
53
0.13
0.15
3.11
2.22
0.07
13,775
9.1x
0.61x
3.9
5.4
5.1
52
0.15
0.16
3.16
2.28
0.08
13,775
8.5x
0.60x
4.2
5.7
5.9
54
102
Sell
Rating system
Relative
Current price
Price target
EUR 1.36
EUR 1.00
2013e
2014e
2015e
old % old % old %
16571
-0.2
16461
0.0
16501
-0.2
Income
PPOP 7755 -0.4 7588 -0.1 7545 -0.5
0.14 -0.4 0.15 1.5 0.16 0.6
EPS
Source: Berenberg estimates
Share data
15,502
174,750,000
Performance data
High 52 weeks (EUR)
Low 52 weeks (EUR)
Relative performance to
1 month
3 months
12 months
2
1
SXXP
MSCI
Europe Banks
-0.6 %
0.3 %
8.4 %
9.6 %
4.5 %
-7.2 %
12 June 2013
Eleni Papoula
Analyst
+44 20 3465 2741
eleni.papoula@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Financials
Intesa
Market ratios and per share data (EUR)
EPS (reported)
EPS (Berenberg adjusted)
TBVPS
BVPS
DPS
P/E (Berenberg adjusted)
P/TBV (x)
P/BV (x)
RoTE adjusted (%)
Dividend yield (%)
Payout ratio (%)
Weighted avg. number of shares (m)
Income Statement and Ratios
Year to 31-Dec
Income Summary (EURm)
Net interest income (NII)
Net fees & commissions
Trading income
Other income
Total income
Operating expenses
Pre-provision op. profits (PPOP)
Loan loss charge (LLC)
Operating Profit
Other non-operating
Exceptional items
Reported profit before tax
Taxation
Minorities + Preferences
Attributable profits (reported)
Adj. attributable profit
Income Ratios (%)
NII/AIEAs
PPOP/LLC
Cost/income ratio
Cost/avg. assets
LLC/avg. loans
LLC/NII
Tax rate
RoTE adjusted (%)
RoE (%)
RoA
Asset Tangible Leverage (x)
RoRWA
Balance Sheet and Ratios
Year to 31-Dec
Balance Sheet Summary (EURm)
Customer loans
Total assets
Interest earning assets
Customer deposits
Debt securities & other borrowings
Minorities
Ordinary equity
Tangible equity
Core (Equity) Tier 1 Capital
Risk-weighted assets
Balance Sheet Ratios (%)
RWA/assets
Loans/assets
Loans/Retail Funds
Tier 1 ratio
Core (Equity) Tier 1 ratio
NPL/loans
Provision coverage
2011
-0.56
0.17
1.95
2.86
0.05
7.8
0.70
0.48
6.4
3.7
-8.9
13,775
2012
0.11
0.14
2.11
3.02
0.05
9.5
0.64
0.45
4.8
3.7
44.0
13,775
2013E
0.11
0.14
2.17
3.06
0.06
10.1
0.63
0.44
4.6
4.4
53.1
13,775
2014E
0.13
0.15
2.22
3.11
0.07
9.1
0.61
0.44
5.4
5.1
52.0
13,775
2015E
0.15
0.16
2.28
3.16
0.08
8.45
0.60
0.43
5.7
5.9
54.2
13,775
2011
2012
2013E
2014E
2015E
9,780
5,466
920
619
16,785
-9,137
7,648
-4,243
3,405
-1,772
-10,720
-9,087
910
-13
-8,190
2,530
9,430
5,451
2,182
818
17,881
-8,913
8,968
-4,714
4,254
-644
-433
3,177
-1,523
0
1,654
2,087
9,244
5,134
1,380
785
16,543
-8,816
7,727
-4,261
3,465
-200
-321
2,945
-1,250
-50
1,645
1,966
9,180
5,109
1,390
775
16,454
-8,873
7,582
-3,673
3,909
-182
-210
3,518
-1,510
-50
1,958
2,168
9,173
5,125
1,390
775
16,463
-8,956
7,507
-3,429
4,078
-183
-197
3,698
-1,501
-50
2,146
2,343
1.67
1.8
54.4
1.4
1.12
43.4
10.0
6.4
3.3
0.4
21.6
0.8
1.58
1.9
49.8
1.4
1.25
50.0
47.9
4.8
3.3
0.3
19.7
0.7
1.51
1.8
53.3
1.3
1.14
46.1
42.4
4.6
3.8
0.3
19.1
0.7
1.50
2.1
53.9
1.3
0.98
40.0
42.9
5.4
4.1
0.3
18.6
0.7
1.50
2.2
54.4
1.3
0.92
37.4
40.6
5.7
4.1
0.3
18.1
0.8
2011
2012
2013E
2014E
2015E
376,974
639,451
578,453
325,300
32,110
718
47,040
31,999
32,797
325,206
376,625
673,472
612,948
349,082
28,276
586
49,613
34,745
33,469
298,619
373,469
668,502
609,792
345,560
26,119
636
50,272
35,604
34,128
295,248
374,234
670,142
610,557
346,343
26,119
686
51,079
36,511
34,935
295,560
375,149
672,032
611,472
347,351
26,119
736
51,911
37,443
35,767
296,081
50.9
59.0
115.9
11.5
10.1
11.1
45.4
44.3
55.9
107.9
12.1
11.2
13.2
44.5
44.2
55.9
108.1
12.4
11.6
13.3
45.0
44.1
55.8
108.1
12.7
11.8
13.3
45.0
44.1
55.8
108.0
12.9
12.1
13.2
45.0
23,200
ISP IM
ISP.MI
1.36
Eleni Papoula
Sell
1.00
-27%
11/12
12/13
13/14
Year-on-year change (%)
-3.6
-2.0
-0.7
-0.3
-5.8
-0.5
137.2
-36.8
0.7
32.1
-4.0
-1.3
6.5
-7.5
-0.5
-2.5
-1.1
0.6
17.3
-13.8
-1.9
11.1
-9.6
-13.8
24.9
-18.5
12.8
-63.7
-69.0
-9.1
-96.0
-25.9
-34.6
-135.0
-7.3
19.5
-267.4
-17.9
20.8
-100.0
na
0.0
-120.2
-0.6
19.0
-17.5
-5.8
10.3
14/15
11/12
12/13
13/14
Year-on-year change (%)
-0.1
-0.8
0.2
5.3
-0.7
0.2
6.0
-0.5
0.1
7.3
-1.0
0.2
-11.9
-7.6
0.0
-18.4
8.5
7.9
5.5
1.3
1.6
8.6
2.5
2.5
2.0
2.0
2.4
-8.2
-1.1
0.1
14/15
-0.1
0.3
0.0
0.0
0.1
0.9
-1.0
-6.6
4.3
1.0
-6.2
5.1
-0.6
0.0
9.6
8.1
0.2
0.3
0.1
0.3
0.0
7.3
1.6
2.6
2.4
0.2
Julius Br Gruppe AG
Small/Mid-Cap: Banking
2011
2012
2013E
2014E
2015E
1.27
2.24
21.8
14.0
1.00
203
16.5x
2.65x
10.5
17.2
2.7
76
170
10.2
1.47
2.14
22.5
15.4
0.60
202
17.3x
2.41x
8.9
14.9
1.6
66
189
9.7
-0.91
1.52
21.0
10.9
0.00
222
24.3x
3.38x
7.2
12.0
0.0
0
243
5.8
0.91
1.90
21.9
12.5
0.00
222
19.5x
2.97x
8.6
16.2
0.0
0
280
12.4
1.55
2.32
23.5
14.6
0.50
222
16.0x
2.54x
9.8
16.7
1.4
32
302
13.7
104
Hold
Rating system
Relative
Current price
Price target
CHF 37.03
CHF 39.00
2013e
old %
1970
-
Total
Income
Op. Pr. 382
1.52
EPS
2014e
old %
2144
-
477
1.90
Source: Berenberg estimates
Share data
2015e
old %
2251
586
2.32
223,800
628,062
Performance data
High 52 weeks (CHF)
Low 52 weeks (CHF)
Relative performance to SXXP
1 month
-1.7 %
3 months
-1.9 %
12 months
-10.4 %
41
31
SX7P
-0.3 %
-0.6 %
-18.4 %
12 June 2013
Eleni Papoula
Analyst
+44 20 3465 2741
eleni.papoula@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Julius Br Gruppe AG
Small/Mid-Cap: Banking
Financials
Julius Baer
Market ratios and per share data (CHF)
New EPS (adjusted)
2011
2012
2013 E
2014 E
2015 E
2.24
2.14
1.52
1.90
2.32
Bloomberg ticker
1.52
1.90
2.32
0.00
0.91
12.5
0.00
1.55
14.6
Reuters ticker
Share price (CHF)
Analyst
Rating
Target price (CHF)
Upside
Old EPS
BAER VX
8.2
1.27
14.0
1.47
15.4
0.00
-0.91
10.9
21.8
1.00
16.5
22.5
0.60
17.3
21.0
0.00
24.3
21.9
0.00
19.5
23.5
0.50
16.0
P/TBV (x)
P/BV (x)
RoTE adjusted
Dividend Yield (%)
Payout ratio (%)
Weighted avg. number of shares (m)
2.65
1.70
17.2
2.7
76
203
2.41
1.65
14.9
1.6
66
202
3.38
1.76
12.0
0.0
0
222
2.97
1.69
16.2
0.0
0
222
2.54
1.58
16.7
1.4
32
222
2011
2012
2013 E
2014 E
2015 E
11/12
12/13
13/14
14/15
170.3
10.2
6.0
189.3
9.7
5.7
242.8
5.8
3.1
279.5
12.4
5.1
302.3
13.7
4.9
11.2
-5.1
-5.5
28.3
-40.2
-46.2
15.1
114.8
67.5
8.2
10.3
-4.2
2011
2012
2013 E
2014 E
2015 E
11/12
12/13
13/14
14/15
431
942
370
9
1,753
-1,214
539
-92
-128
465
980
266
26
1,737
-1,216
521
-91
-57
487
1,167
307
10
1,970
-1,588
382
-136
-490
507
1,240
387
10
2,144
-1,667
477
-136
-100
557
1,278
406
10
2,251
-1,664
586
-136
-40
7.9
4.1
-28.1
172.3
-0.9
0.2
-3.2
-1.0
-55.7
4.6
19.0
15.3
-60.9
13.4
30.6
-26.7
49.7
na
4.2
6.2
26.3
0.0
8.8
5.0
24.8
0.0
-79.6
9.7
3.1
4.9
0.0
4.9
-0.2
22.9
0.0
-60.0
319
-61
0
258
453
374
-76
1
297
434
-244
41
0
-203
338
241
-40
0
201
422
410
-66
0
344
514
17.2
24.8
149.3
15.3
-4.4
-165.3
-154.3
na
-168.2
-22.1
-198.7
-196.4
na
-199.2
24.7
70.2
65.6
na
71.1
22.0
Phone
email:
BAER.VX
37.0
Eleni Papoula
Hold
39.0
5%
102.7
25.7
56.2
22.1
68.6
19.0
10.5
103.6
25.7
54.1
14.7
68.6
20.3
8.9
108.8
22.5
54.0
14.2
77.6
16.8
7.2
99.2
19.4
47.5
14.8
75.0
16.5
8.6
86.2
19.1
43.9
14.0
71.3
16.0
9.8
0.9
-0.1
-3.6
-33.5
0.0
6.5
-15.4
5.0
-12.4
-0.2
-3.4
13.2
-16.9
-19.4
-8.8
-13.8
-12.1
4.5
-3.4
-2.4
19.6
-13.2
-1.5
-7.5
-5.8
-4.9
-2.7
14.0
0.86
12.3
3.65
2.70
0.79
11.3
3.43
2.39
0.58
12.4
2.50
1.73
0.69
12.5
2.81
1.99
0.79
12.3
3.26
2.20
-7.7
-8.3
-5.8
-11.4
-26.9
10.3
-27.3
-27.8
18.8
0.7
12.6
15.0
15.6
-1.3
15.9
10.7
2011
2012
2013 E
2014 E
2015 E
11/12
12/13
13/14
14/15
16,408
12,168
52,929
34,841
2
4,308
3,191
2,564
12,811
19,783
11,775
54,868
39,104
2
4,872
3,755
3,175
12,451
21,811
12,492
58,518
41,880
2
4,709
3,189
2,347
14,630
24,047
13,253
61,451
43,572
2
4,910
3,390
2,743
15,363
26,511
14,060
64,873
45,332
2
5,255
3,735
3,283
16,218
20.6
-3.2
3.7
12.2
17.8
13.1
17.7
23.8
-2.8
10.3
6.1
6.7
7.1
0.0
-3.3
-15.1
-26.1
17.5
10.3
6.1
5.0
4.0
0.0
4.3
6.3
16.9
5.0
10.3
6.1
5.6
4.0
0.0
7.0
10.2
19.7
5.6
24.2
31.0
47.1
21.8
20.0
22.7
36.1
50.6
29.3
25.5
25.0
37.3
52.1
19.3
16.0
25.0
39.1
55.2
20.9
17.9
25.0
40.9
58.5
23.1
20.2
-6.2
16.3
7.4
34.5
27.4
10.2
3.4
2.9
-34.2
-37.1
0.0
5.0
6.0
8.6
11.3
0.0
4.4
6.0
10.6
13.4
105
KBC Groupe SA
Banking
Buy
Rating system
Relative
Current price
Price target
EUR 30.86
EUR 35.00
2013e
2014e
old % old %
7348
7065
Income
2963
PPOP 3235
3.34
3.51
EPS
Source: Berenberg estimates
Share data
2015e
old %
7266
3086
3.61
-
417
1,509,607
Performance data
High 52 weeks (EUR)
Low 52 weeks (EUR)
Relative performance to SXXP
1 month
2.1 %
3 months
2.8 %
12 months
88.9 %
33
14
SX7P
3.4 %
4.1 %
80.8 %
2011
2012
2013E
2014E
2015E
-1.93
3.23
47.8
43.8
0.01
340
9.6x
0.70x
-6.0
7.6
0.0
1
-1.09
4.40
37.4
35.1
1.00
349
7.0x
0.88x
5.1
10.8
3.2
42
3.34
3.34
36.6
34.4
0.00
417
9.2x
0.90x
12.0
10.0
0.0
0
3.51
3.51
38.7
36.7
1.00
417
8.8x
0.84x
10.3
9.8
3.2
32
3.61
3.61
40.9
39.1
1.00
417
8.5x
0.79x
9.8
9.5
3.2
28
106
12 June 2013
Eleni Papoula
Analyst
+44 20 3465 2741
eleni.papoula@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
KBC Groupe SA
Banking
Financials
KBC
Market ratios and per share data (EUR)
EPS (reported)
EPS (Berenberg adjusted)
2011
-1.93
3.23
2012
-1.09
4.40
2013E
3.34
3.34
2014E
3.51
3.51
2015E
3.61
3.61
TBVPS
43.8
35.1
34.4
36.7
BVPS
DPS
P/E (Berenberg adjusted)
47.8
0.01
9.6
37.4
1.00
7.0
36.6
0.00
9.2
38.7
1.00
8.8
P/TBV (x)
P/BV (x)
RoTE adjusted (%)
Dividend yield (%)
Payout ratio (%)
Weighted avg. number of shares (m)
0.70
0.64
7.6
0.0
0.8
340
0.88
0.82
10.8
3.2
42.0
349
0.90
0.84
10.0
0.0
0.0
417
2011
2012
2013E
12,155
KBC BB
39.1
Reuters ticker
KBC.BR
40.9
1.00
8.5
Rating
Analyst
Share price (EUR)
0.84
0.80
9.8
3.2
32.3
417
0.79
0.75
9.5
3.2
27.7
417
2014E
2015E
Phone
email:
Buy
Eleni Papoula
30.86
35.00
13%
5,404
1,645
521
648
-37
8,181
-4,687
3,494
-1,335
2,159
-574
-57
1,528
-397
-35
1,096
4,533
1,326
366
1,276
40
7,541
-4,186
3,355
-1,070
2,285
-118
-33
2,134
-568
-29
1,537
4,226
1,558
247
1,269
49
7,348
-4,114
3,235
-1,053
2,182
-167
0
2,015
-598
-25
1,392
4,389
1,588
242
800
45
7,065
-4,102
2,963
-743
2,220
-168
0
2,052
-534
-56
1,462
4,546
1,617
258
800
45
7,266
-4,180
3,086
-764
2,322
-168
0
2,154
-560
-88
1,506
-1,443
-395
164
359
-530
12
-670
426
612
-543
994
1,556
0
1,392
1,462
-170
1,292
2.09
3.8
57.3
1.5
0.40
10.6
26.0
7.6
1.94
19.4
55.5
1.5
0.09
2.6
26.6
10.8
2.52
13.1
56.0
1.6
0.25
4.0
29.7
10.0
RoE (%)
RoA (%)
Asset Tangible Leverage (x)
RoRWA (%)
5.1
0.14
19.0
6.0
12.0
0.37
17.4
12.9
2011
2012
Operating expenses
Pre-provision profits
Loan loss provisions
CVA gains/(losses)
Adj. attributable profit (IFRS)
Coupon of stated aid
11/12
12/13
13/14
14/15
-6.8
17.5
-32.5
-0.5
22.5
-2.6
-1.7
-3.6
-1.6
-4.5
41.5
-100.0
-5.6
5.3
-13.8
-9.5
3.9
2.0
-2.0
-37.0
-8.2
-3.9
-0.3
-8.4
-29.4
1.7
0.6
na
1.8
-10.8
124.0
5.1
3.6
1.8
6.6
0.0
0.0
2.9
1.9
4.2
2.8
4.6
0.0
na
5.0
5.0
57.1
3.0
1,506
0
1,506
5,000.0
154.2
-6.0
3.0
133.3
40.0
-7.1
16.5
4.05
13.2
58.1
1.6
3.21
3.8
26.0
9.8
4.20
13.8
57.5
1.6
3.21
3.7
26.0
9.5
-7.1
414.8
-3.1
-0.2
-77.6
-75.5
2.4
41.1
29.6
-32.5
0.8
3.2
184.5
51.8
11.6
-7.5
61.1
1.1
3.7
-0.7
1,165.8
-3.1
-12.4
-1.3
3.6
4.6
-0.9
1.2
0.0
-3.5
0.0
-3.0
10.3
0.54
18.0
15.9
9.8
0.50
16.8
13.3
9.5
0.58
16.0
13.7
138.0
160.8
-8.5
116.9
-14.2
47.0
3.3
22.9
-5.4
-7.5
-6.5
-16.2
-2.4
15.7
-4.5
2.6
2013E
2014E
2015E
11/12
12/13
13/14
14/15
126,510
256,886
227,522
165,226
362
12,099
14,271
11,951
8,451
102,148
5,235
259,536
108,270
102,493
383
12,923
13,964
11,381
9,051
105,000
5,235
258,794
108,270
106,654
439
14,157
14,868
12,348
10,348
105,000
5,235
263,224
108,270
110,985
527
15,405
15,786
13,359
11,689
105,000
-8.5
-10.0
-4.9
0.0
-29.8
24.0
-0.6
-10.9
22.2
-19.1
-95.9
1.0
-52.4
-38.0
5.8
6.8
-2.2
-4.8
7.1
2.8
0.0
-0.3
0.0
4.1
14.6
9.6
6.5
8.5
14.3
0.0
0.0
1.7
0.0
4.1
20.0
8.8
6.2
8.2
13.0
0.0
48.5
81.5
12.3
10.6
5.5
4.9
69.0
49.2
76.6
13.8
11.7
8.3
5.3
66.0
2.0
5.1
21.8
10.8
8.6
5.3
66.0
2.0
4.9
22.1
11.8
9.9
5.3
66.0
2.0
4.7
22.5
12.7
11.1
5.3
66.0
1.6
-6.0
12.0
10.2
51.2
8.2
-4.3
-95.9
-93.3
58.1
-7.4
4.2
0.0
0.0
0.3
-3.9
1.6
8.5
14.3
0.0
0.0
-1.7
-3.9
1.6
8.2
13.0
0.0
0.0
2011
2012
2013E
2014E
2015E
-4.07
-4.07
66.8
55.2
0.00
68,727
-15.1x
1.12x
-6.1
1.2
0.0
0
-2.10
-2.10
62.5
52.9
0.00
70,343
-29.3x
1.16x
-3.3
14.8
0.0
0
3.59
3.59
63.5
54.0
0.00
71,113
17.1x
1.14x
5.7
7.9
0.0
0
2.81
2.81
66.3
56.8
0.00
71,113
21.9x
1.08x
4.3
8.1
0.0
0
3.63
3.63
67.9
58.4
2.00
71,113
17.0x
1.05x
5.4
7.1
3.2
55
108
Sell
Rating system
Relative
Current price
Price target
GBp 62
GBp 24
2013e
2014e
2015e
old % old % old %
Income 17996 0.3 16849 2.4 16385 -3.4
PPOP 8290 1.7 7688 3.9 7386 -2.1
0.48 650 3.24 -13.2 3.94 -7.9
EPS
Source: Berenberg estimates
Share data
71,113
117,380,800
Performance data
High 52 weeks (GBp)
Low 52 weeks (GBp)
Relative performance to SXXP
1 month
6.8 %
3 months
23.1 %
12 months
88.8 %
63
28
SX7P
8.1 %
24.4 %
80.8 %
12 June 2013
James Chappell
Analyst
+44 20 3207 7844
james.chappell@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Financials
Market ratios; per share data (GBP)
EPS (reported)
EPS (Berenberg adjusted)
2011
-4.07
-4.07
2012
-2.10
-2.10
2013e
3.59
3.59
2014e
2.81
2.81
2015e
3.63
3.63
TBVPS
BVPS (reported)
DPS
P/E (Berenberg adjusted)
55
67
0
-15.1x
53
63
0
-29.3x
54
63
0
17.1x
57
66
0
21.9x
58
68
2.00
17.0x
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
1.12
0.92
0
0
68,470
1.16
0.98
0
0
69,841
1.14
0.97
0
0
70,921
1.09
0.93
0
0
70,921
1.06
0.91
3.2%
55%
70,921
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
12,210
8,836
21,046
-10,621
10,425
-9,787
638
-4,179
-3,541
828
-73
-2,786
10,335
8,051
18,386
-10,124
8,262
-5,697
2,565
-3,177
-612
-773
-84
-1,469
10,197
7,848
18,045
-9,610
8,435
-4,018
4,417
-694
3,723
-1,050
-125
2,548
10,060
7,202
17,262
-9,278
7,984
-3,599
4,385
-1,670
2,715
-597
-125
1,993
8,938
6,895
15,833
-8,602
7,231
-3,252
3,978
-520
3,458
-761
-125
2,573
-15.4%
-8.9%
-12.6%
-4.7%
-20.7%
-41.8%
302.0%
-1.3%
-2.5%
-1.9%
-5.1%
2.1%
-29.5%
72.2%
-1.3%
-8.2%
-4.3%
-3.5%
-5.3%
-10.4%
-0.7%
-11.2%
-4.3%
-8.3%
-7.3%
-9.4%
-9.6%
-9.3%
-82.7%
-193.4%
-708.3%
35.8%
-27.1%
-43.1%
27.4%
27.4%
-47.3%
-273.4%
-21.8%
29.1%
2.07%
1.1x
50.5%
1.08%
1.62%
80.2%
-129.8%
1.2%
-6.1%
-0.28%
-4.2x
-0.73%
1.93%
1.5x
55.1%
1.07%
1.02%
55.1%
30.1%
14.8%
-3.3%
-0.16%
-95.5x
-0.44%
2.01%
2.1x
53.3%
1.05%
0.75%
39.4%
23.8%
7.9%
5.7%
0.28%
28.2x
0.85%
2.02%
2.2x
53.7%
1.05%
0.68%
35.8%
13.6%
8.1%
4.3%
0.23%
35.8x
0.70%
1.83%
2.2x
54.3%
1.01%
0.65%
36.4%
19.1%
7.1%
5.4%
0.30%
23.6x
0.96%
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
565,638
970,546
585,400
413,906
220,148
674
45,920
40,708
37,991
352,341
517,225
924,552
543,300
426,912
151,461
685
43,999
39,191
37,193
310,299
502,469
901,578
511,950
440,459
486,668
866,728
502,700
448,428
459,588
831,508
492,600
428,284
-8.6%
-4.7%
-7.2%
3.1%
-2.9%
-2.5%
-5.8%
3.2%
-3.1%
-3.9%
-1.8%
1.8%
-5.6%
-4.1%
-2.0%
-4.5%
685
45,147
40,339
38,494
290,500
685
47,140
42,332
40,487
276,702
685
48,290
43,482
41,637
259,153
-4.2%
-3.7%
-2.1%
-11.9%
2.6%
2.9%
3.5%
-6.4%
4.4%
4.9%
5.2%
-4.7%
2.4%
2.7%
2.8%
-6.3%
36.3%
58.3%
137%
12.5%
10.8%
33.6%
55.9%
121%
13.8%
12.0%
32.2%
55.7%
114%
15.2%
13.2%
31.9%
56.2%
109%
16.6%
14.6%
31.2%
55.3%
107%
18.2%
16.0%
Market Cap
Bloomberg ticker
Reuters ticker
Share price
Analyst
43,777
LLOY LN
GBp
LLOY.L
61.6
James Chappell
james.chappell@berenberg.com
+44 20 3207 7844
research
109
Nordea Bank AB
Banking
2011
2012
2013E
2014E
2015E
0.65
0.65
6.43
5.80
0.26
4,027
14.0x
1.57x
10.6
11.8
0.0
0
0.77
0.77
6.91
6.26
0.34
4,026
11.7x
1.45x
11.7
13.0
0.0
0
0.81
0.81
7.02
6.37
0.36
4,026
11.2x
1.43x
11.6
12.8
0.0
0
0.87
0.87
7.53
6.87
0.38
4,040
10.4x
1.32x
11.9
13.1
0.0
0
0.91
0.91
8.04
7.38
0.40
4,040
10.0x
1.23x
11.7
12.8
0.0
0
110
Buy
Rating system
Relative
Current price
Price target
SEK 79.10
SEK 81.00
10/06/2013
NASDAQ
Stockholm Close
Market cap SEK 320,276 m
Reuters
NDA.ST
Bloomberg
NDA SS
OMX
2013e
2014e
2015e
old % old % old %
Income 10284 -0.4 10597 -0.5 10829 -0.6
PPOP 5083 -0.5 5410 -1.0 5632 -1.0
0.81 0.1 0.87 0.0 0.91 0.0
EPS
Source: Berenberg estimates
Share data
4,049
6,524,000
Performance data
High 52 weeks (SEK)
Low 52 weeks (SEK)
Relative performance to SXXP
1 month
1.3 %
3 months
3.6 %
12 months
15.3 %
84
56
SX7P
2.6 %
4.9 %
7.3 %
12 June 2013
Nick Anderson
Analyst
+44 20 3207 7838
nick.anderson@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Nordea Bank AB
Banking
Financials
Market ratios; per share data (EUR)
EPS (reported)
EPS (Berenberg adjusted)
2011
0.65
0.65
2012
0.77
0.77
2013e
0.81
0.81
2014e
0.87
0.87
2015e
0.91
0.91
TBVPS
BVPS (reported)
DPS
P/E (Berenberg adjusted)
5.80
6.43
0.26
14.3x
6.26
6.91
0.34
12.0x
6.37
7.02
0.36
11.4x
6.87
7.53
0.38
10.7x
7.38
8.04
0.40
10.2x
Reuters ticker
Share price
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
1.60x
1.44x
2.8%
40%
4,027
1.48x
1.34x
3.7%
44%
4,026
1.46x
1.32x
3.9%
44%
4,026
1.35x
1.23x
4.1%
44%
4,040
1.26x
1.15x
4.3%
44%
4,040
Analyst
Market Cap
Bloomberg ticker
SEKm
EUR
SEK
EUR-SEK
325,540
NDA SS
NDA.ST
9.28
80.4
8.6661
Nick Anderson
nick.anderson@berenberg.com
+44 20 3207 7838
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
5,464
2,389
1,512
132
9,497
-5,223
4,274
-734
3,540
0
0
3,540
-913
-7
2,620
2,620
5,752
2,504
1,784
196
10,236
-5,186
5,050
-933
4,117
0
0
4,117
-991
-7
3,119
3,119
5,639
2,591
1,782
230
10,242
-5,185
5,057
-826
4,231
0
0
4,231
-952
-8
3,271
3,271
5,810
2,650
1,875
204
10,539
-5,186
5,354
-870
4,483
0
0
4,483
-959
-8
3,516
3,516
5,937
2,708
1,916
204
10,765
-5,191
5,574
-890
4,684
0
0
4,684
-1,002
-8
3,674
3,674
5.3%
4.8%
18.0%
48.5%
7.8%
-0.7%
18.2%
27.1%
16.3%
-2.0%
3.5%
-0.1%
17.3%
0.1%
0.0%
0.1%
-11.5%
2.8%
3.0%
2.3%
5.2%
-11.3%
2.9%
0.0%
5.9%
5.4%
6.0%
2.2%
2.2%
2.2%
0.0%
2.1%
0.1%
4.1%
2.3%
4.5%
16.3%
8.5%
2.8%
-3.9%
6.0%
0.8%
4.5%
4.5%
19.1%
19.1%
4.9%
4.9%
7.5%
7.5%
4.5%
4.5%
0.87%
5.8x
55.0%
0.84%
0.22%
13.4%
25.8%
11.8%
10.6%
0.42%
28.1x
1.44%
0.82%
5.4x
50.7%
0.74%
0.27%
16.2%
24.1%
13.0%
11.7%
0.44%
29.2x
1.74%
0.85%
6.1x
50.6%
0.78%
0.23%
14.6%
22.5%
12.8%
11.6%
0.50%
25.8x
1.96%
0.87%
6.2x
49.2%
0.78%
0.24%
15.0%
21.4%
13.1%
11.9%
0.53%
24.9x
2.08%
0.87%
6.3x
48.2%
0.76%
0.24%
15.0%
21.4%
12.8%
11.7%
0.54%
23.6x
2.13%
-0.06%
0.03%
0.02%
0.00%
-4.3%
-0.10%
0.05%
0.0%
0.05%
-0.03%
-1.4%
-0.01%
0.01%
-1.0%
-0.01%
0.00%
-1.7%
1.1%
-1.6%
-0.2%
-1.1%
0.3%
0.0%
-0.4%
0.02%
0.05%
0.03%
0.01%
0.30%
0.22%
0.12%
0.05%
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
337,203
716,204
346,251
677,309
354,574
661,487
361,554
674,510
368,718
687,874
2.7%
-5.4%
2.4%
-2.3%
2.0%
2.0%
2.0%
2.0%
190,092
186,453
86
26,034
23,459
20,677
185,200
200,678
192,137
5
28,000
25,344
21,961
167,892
28,441
25,785
23,238
168,035
30,410
27,754
25,207
171,343
32,467
29,811
27,264
174,738
7.6%
8.0%
6.2%
-9.3%
1.6%
1.7%
5.8%
0.1%
6.9%
7.6%
8.5%
2.0%
6.8%
7.4%
8.2%
2.0%
25.9%
47.1%
177%
12.2%
11.2%
1.31%
48.2%
24.8%
51.1%
173%
14.3%
13.1%
1.88%
41.2%
25.4%
53.6%
25.4%
53.6%
25.4%
53.6%
-1.1%
4.0%
0.6%
2.5%
0.0%
0.0%
0.0%
0.0%
15.0%
13.8%
15.8%
14.7%
16.7%
15.6%
2.0%
1.9%
0.7%
0.7%
0.8%
0.9%
0.9%
0.9%
111
2011
2012
2013E
2014E
2015E
3.95
5.95
37.3
31.9
1.05
195
4.3x
0.80x
10.8
13.3
4.1
27
2.70
4.06
39.1
32.4
1.17
195
6.3x
0.79x
7.3
8.9
4.6
43
2.02
3.05
43.6
36.9
1.00
195
8.3x
0.69x
5.6
6.1
3.9
49
2.58
3.61
44.0
37.3
1.00
195
7.0x
0.68x
6.4
7.2
3.9
39
2.46
3.56
46.4
39.7
1.00
195
7.2x
0.64x
6.1
6.7
3.9
41
112
Sell
Rating system
Relative
Current price
Price target
EUR 25.43
EUR 22.00
2013e
2014e
old % old %
5061
5104
Income
1916
PPOP 1877
3.05
3.61
EPS
Source: Berenberg estimates
Share data
2015e
old %
5017
1869
3.56
-
196
154,767
Performance data
High 52 weeks (EUR)
Low 52 weeks (EUR)
Relative performance to SXXP
1 month
-5.6 %
3 months
-14.8 %
12 months
-13.2 %
34
22
SX7P
-4.3 %
-13.5 %
-21.3 %
12 June 2013
Eleni Papoula
Analyst
+44 20 3465 2741
eleni.papoula@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Financials
Raiffeisen
Market ratios and per share data (EUR)
New EPS (reported)
New EPS (Berenberg adjusted)
2011
3.95
5.95
2012
2.70
4.06
2013E
2.02
3.05
2014E
2.58
3.61
2015E
2.46
3.56
5.95
0.0%
31.9
4.37
-7.2%
32.4
3.12
-2.3%
36.9
3.63
-0.6%
37.3
3.38
5.1%
39.7
Reuters ticker
Share price (EUR)
Analyst
BVPS
DPS
P/E (Berenberg adjusted)
37.3
1.05
4.3
39.1
1.17
6.3
43.6
1.00
8.3
44.0
1.00
7.0
46.4
1.00
7.2
Rating
Target price (EUR)
Upside
P/TBV (x)
P/BV (x)
RoTE adjusted (%)
0.80
0.68
13.3
0.79
0.65
8.9
0.69
0.58
6.1
0.68
0.58
7.2
0.64
0.55
6.7
Phone
email:
4.1
4.6
3.9
3.9
3.9
26.6
195
43.4
195
49.4
195
38.7
195
40.6
195
2011
2012
2013E
2014E
2015E
4,971
RBI AV
RAIFF.PK
25.43
Eleni Papoula
Sell
22.00
-13%
13/14
14/15
11/12
12/13
-3.0
0.5
0.0
0.0
-1.7
-1.3
-2.5
-4.7
-0.3
-0.6
36.2
-1.6
3,667
1,490
363
37
5,557
-3,120
2,437
-1,064
1,373
-399
-6
968
190
1,158
3,471
1,517
215
101
5,304
-3,263
2,041
-1,009
1,032
-284
-23
725
64
789
3,250
1,434
285
92
5,061
-3,185
1,877
-976
901
-277
-30
594
0
594
3,153
1,438
295
218
5,104
-3,188
1,916
-927
990
-261
-26
703
0
703
3,059
1,445
295
218
5,017
-3,148
1,869
-883
986
-259
-35
692
0
692
-31.8
-24.8
18.4
-200
-200
-200
-200
-213
0.0
0.0
0.0
6.3
958
589
394
503
479
-38.5
-33.2
27.7
-4.7
2.73
2.54
56.15
2.24
1.35
29.02
29.09
13.3
2.69
2.60
61.52
2.31
1.22
29.07
27.52
8.9
2.66
2.50
62.92
2.37
1.17
30.03
30.75
6.1
2.58
2.42
62.46
2.40
1.11
29.39
26.36
7.2
2.48
2.33
62.74
2.36
1.05
28.87
26.29
6.7
-1.2
2.5
9.6
2.8
-9.6
0.2
-5.4
-32.6
-1.3
-4.0
2.3
2.8
-4.3
3.3
11.8
-31.6
-3.1
-3.1
-0.7
1.3
-5.1
-2.2
-14.3
17.4
-3.9
-3.8
0.5
-1.8
-5.2
-1.8
-0.3
-6.0
10.8
1.0
14.6
19.8
7.3
0.6
14.0
12.6
5.6
0.4
12.5
8.7
6.4
0.5
12.3
10.3
6.1
0.5
11.9
9.9
-32.7
-43.1
-4.6
-36.4
-22.9
-25.1
-10.8
-30.6
13.3
16.3
-0.9
17.7
-3.9
3.7
-3.7
-3.9
2011
2012
2013E
2014E
2015E
11/12
12/13
13/14
14/15
2.2
-7.4
-4.2
-0.7
-7.5
-37.1
-0.6
1.2
-1.6
0.0
-2.5
-5.2
-1.7
-6.2
1.8
8.1
10.0
5.3
-1.6
75,657
131,173
124,894
57,633
16,555
1,066
10,404
8,118
9,191
81,576
146,985
134,481
66,747
14,367
1,143
10,936
8,727
9,415
83,343
136,115
128,839
66,297
13,290
719
10,872
8,832
9,265
83,369
132,697
122,192
65,185
12,470
732
11,754
9,715
9,753
4.3
-9.9
-9.6
4.0
-16.9
6.5
11.6
12.3
10.0
7.8
12.1
7.7
15.8
-13.2
7.2
5.1
7.5
2.4
5,856
6,691
6,915
6,765
7,253
14.3
3.3
-2.2
7.2
89,210
88,800
95,300
82,825
85,179
-0.5
7.3
-13.1
2.8
64.8
55.5
122.2
9.2
9.9
60.8
61.2
125.7
10.7
11.2
63.9
62.8
127.9
11.5
11.4
63.9
62.8
128.1
11.5
12.1
63.8
62.8
129.3
12.0
12.6
-6.1
10.3
2.9
16.4
13.2
5.0
2.6
1.7
7.5
2.4
0.0
0.0
0.2
0.7
5.6
-0.2
0.0
1.0
4.0
4.1
113
RBS plc
Banking
Financially repressed
PSC report and Mansion House speech key for future: The
Chancellors Mansion House speech on 19 June should give an
indication of the re-privatisation of RBS. Alongside this, the debate
over whether RBS should be split into a good/bad bank needs to be
resolved, with our view being a split achieves nothing new.
Target price unchanged at 190p: We use a capital allocation sumof-the-parts analysis to value RBS. On this basis, RBS is c1.9bn short
of our optimal capital target.
Risks to our view: The main risk to our view is that our revenue
estimates are too low.
2011
2012
2013E
2014E
2015E
-18.45
-18.45
635.7
477.7
0.0
11,023
-18.1x
0.70x
-2.8
-3.6
0.0
0
-55.04
-55.04
567.4
440.5
0.0
11,171
-6.1x
0.76x
-9.1
-11.9
0.0
0
6.13
6.13
567.1
436.9
0.0
11,298
54.5x
0.76x
1.1
1.4
0.0
0
15.17
15.17
582.2
456.4
0.0
11,298
22.0x
0.73x
2.6
3.4
0.0
0
23.91
23.91
605.9
484.6
0.0
11,298
14.0x
0.69x
4.0
5.0
0.0
0
114
Sell
Rating system
Relative
Current price
Price target
GBp 334
GBp 190
2013e
2014e
2015e
old % old % old %
22124
-5.2
20395
-0.2
20094
0.1
Income
PPOP 8088 -10.4 7399 -5.4 7310 -4.9
4.40 39.3 17.35 -12.6 25.47 -6.1
EPS
Source: Berenberg estimates
Share data
11,298
10,687,520
Performance data
High 52 weeks (GBp)
Low 52 weeks (GBp)
Relative performance to SXXP
1 month
13.9 %
3 months
10.8 %
12 months
23.6 %
368
197
SX7P
15.2 %
12.1 %
15.6 %
12 June 2013
James Chappell
Analyst
+44 20 3207 7844
james.chappell@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
RBS plc
Banking
Financials
Market ratios; per share data (GBP)
EPS (reported)
EPS (Berenberg adjusted)
2011
-18.45
-18.45
2012
-55.04
-55.04
2013e
6.13
6.13
2014e
15.17
15.17
2015e
23.91
23.91
TBVPS
BVPS (reported)
DPS
P/E (Berenberg adjusted)
478
636
0.00
-18.1x
441
567
0.00
-6.1x
437
567
0.00
54.5x
456
582
0.00
22.0x
485
606
0.00
14.0x
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
0.70
0.53
0.0%
0%
10,822
0.76
0.59
0.0%
0%
11,002
0.76
0.59
0.0%
0%
11,220
0.73
0.57
0.0%
0%
11,220
0.69
0.55
0.0%
0%
11,220
Market Cap
Bloomberg ticker
Reuters ticker
Share price
Analyst
37,001
RBS LN
GBp
RBS.L
334
James Chappell
james.chappell@berenberg.com
+44 20 3207 7844
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
12,689
12,052
24,741
-15,478
9,263
-7,439
1,824
-2,590
-766
-1,127
-28
-76
-1,997
11,695
11,665
23,360
-14,731
8,629
-5,279
3,350
-8,759
-5,409
-441
-165
-41
-6,056
10,669
10,315
20,985
-13,735
7,250
-4,135
3,115
-858
2,257
-1,100
-598
129
688
10,449
9,897
20,347
-13,351
6,996
-3,277
3,719
-1,000
2,719
-625
-392
0
1,702
10,358
9,756
20,113
-13,162
6,952
-2,609
4,342
-400
3,942
-867
-392
0
2,683
-7.8%
-3.2%
-5.6%
-4.8%
-6.8%
-29.0%
83.7%
-8.8%
-11.6%
-10.2%
-6.8%
-16.0%
-21.7%
-7.0%
-2.1%
-4.1%
-3.0%
-2.8%
-3.5%
-20.7%
19.4%
-0.9%
-1.4%
-1.1%
-1.4%
-0.6%
-20.4%
16.8%
606.1%
-60.9%
-141.7%
149.4%
20.5%
-43.1%
45.0%
38.7%
203.3%
-111.4%
147.3%
57.7%
1.88%
1.2x
62.6%
1.05%
1.55%
58.6%
61.8%
-3.6%
-2.8%
-0.13%
27.0x
-0.37%
1.85%
1.6x
63.1%
1.05%
1.19%
45.1%
13.2%
-11.9%
-9.1%
-0.43%
27.7x
-1.26%
1.84%
1.8x
65.5%
1.08%
1.01%
38.8%
35.3%
1.4%
1.1%
0.05%
25.9x
0.16%
1.92%
2.1x
65.6%
1.11%
0.86%
31.4%
16.8%
3.4%
2.6%
0.14%
23.7x
0.42%
1.97%
2.7x
65.4%
1.16%
0.71%
25.2%
20.0%
5.0%
4.0%
0.24%
21.4x
0.69%
-0.03%
0.00%
0.08%
0.05%
0.5%
0.00%
-0.36%
2.4%
0.03%
-0.18%
0.2%
0.04%
-0.15%
-0.2%
0.04%
-0.15%
-48.6%
-8.2%
22.1%
13.3%
-18.5%
2.0%
3.2%
1.7%
-0.29%
0.48%
0.09%
0.09%
-0.89%
1.42%
0.26%
0.27%
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
454,112
1,506,867
662,222
414,143
188,940
1,234
70,075
55,217
46,341
501,900
430,088
1,312,295
604,647
433,239
121,365
1,770
63,386
49,841
47,320
459,600
388,982
1,241,824
552,464
432,657
649,991
1,770
64,074
50,446
48,467
422,127
371,186
1,154,374
534,329
413,008
580,489
1,770
65,776
52,648
50,718
392,963
364,807
1,116,252
518,082
421,820
530,872
1,770
68,459
55,831
53,901
385,198
-5.3%
-12.9%
-9.6%
-5.4%
-4.6%
-7.0%
-1.7%
-3.3%
-9.5%
-9.7%
2.1%
-8.4%
1.1%
1.2%
2.4%
-8.2%
2.7%
4.4%
4.6%
-6.9%
4.1%
6.0%
6.3%
-2.0%
33.3%
30.1%
110%
13.2%
10.7%
35.0%
32.8%
99%
12.4%
10.3%
34.0%
31.3%
90%
13.7%
11.5%
34.0%
32.2%
90%
15.3%
12.9%
34.5%
32.7%
86%
16.4%
14.0%
-0.7%
-0.4%
1.2%
1.2%
1.6%
1.4%
1.1%
1.1%
115
Banco Santander SA
Banking
Macro risks in Spain matter: Spain may only account for 17% of
group revenues but the macro risks are material and threaten credit
quality. These include further asset deflation, prolonged recession
driven by deleveraging and government austerity, the net international
investment position and renewed disruption to wholesale funding.
Sell
Rating system
Relative
Current price
Price target
EUR 5.41
EUR 3.90
2013e
2014e
2015e
old % old % old %
44042
46417
47942
Income
PPOP 23179 - 25446 - 26350 0.51
0.58
0.61
EPS
Source: Berenberg estimates
Share data
11,961
67,528,000
Performance data
High 52 weeks (EUR)
Low 52 weeks (EUR)
Relative performance to SXXP
1 month
0.8 %
3 months
-8.3 %
12 months
-15.3 %
7
4
SX7P
2.1 %
-7.0 %
-23.3 %
Price target cut by 34%: After publishing our detailed sector report
on capital, our price target includes the capital deficit for the first time.
Based on a 24bn deficit, we cut our price target by 2.05.
2011
2012
2013E
2014E
2015E
0.60
0.57
8.53
5.85
0.60
8,957
9.6x
0.93x
6.8
10.0
11.1
100
0.23
0.20
7.59
5.41
0.60
9,833
27.6x
1.00x
2.7
3.6
11.1
266
0.51
0.51
7.21
5.28
0.50
11,141
10.6x
1.02x
6.8
10.2
9.2
98
0.58
0.58
7.05
5.32
0.28
12,425
9.3x
1.02x
8.0
11.6
5.2
48
0.61
0.61
6.95
5.32
0.30
13,192
8.9x
1.02x
8.4
11.8
5.5
49
116
12 June 2013
Nick Anderson
Analyst
+44 20 3207 7838
nick.anderson@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Banco Santander SA
Banking
Financials
Market ratios and per share data
EPS (reported)
EPS (Berenberg adjusted)
TBVPS
BVPS
DPS
P/E (Berenberg adjusted)
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
Income Statement and Ratios
Year to 31-Dec
Income Summary (EURm)
Net interest income (NII)
Net fees & commissions
Trading income
Other income
Total income
Operating expenses
Pre-provision op. profits (PPOP)
Loan loss charge (LLC)
Operating Profit
Other non-operating
Exceptionals
Reported profit before tax
Taxation
Minorities + Preferences
Attributable profits (reported)
Adj. attributable profit
Income Ratios (%)
NII/Average Total Assets
PPOP/LLC
Cost/income ratio
Cost/avg. assets
LLC/avg. loans
LLC/NII
Tax rate
RoTE adjusted (%)
RoE (%)
RoA
Asset Tangible Leverage (x)
RoRWA
Balance Sheet and Ratios
Year to 31-Dec
Balance Sheet Summary (EURm)
Customer loans
Total assets
Interest earning assets
Customer deposits
Debt securities & other borrowings
Minorities
Ordinary equity
Tangible equity
Core (Equity) Tier 1 Capital
Risk-weighted assets
Balance Sheet Ratios (%)
RWA/assets
Loans/assets
Loans/Deposits
Tier 1 ratio
Core (Equity) Tier 1 ratio
NPL/loans
Provision coverage
2011
0.60
0.57
5.85
8.53
0.60
9.7
0.94
0.64
11.0
99.7
8,957
2012
0.23
0.20
5.41
7.59
0.60
27.9
1.01
0.72
11.0
265.8
9,833
2013e
0.51
0.51
5.28
7.21
0.50
10.7
1.04
0.76
9.1
97.9
11,141
2014e
0.58
0.58
5.32
7.05
0.28
9.4
1.03
0.78
5.2
48.2
12,425
2015e
0.61
0.61
5.32
6.95
0.30
9.0
1.03
0.79
5.4%
49%
13,192
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
29,110
10,208
2,499
937
42,754
-19,559
23,195
-9,900
13,295
-2,984
0
10,311
-2,500
-766
5,351
5,071
30,147
10,307
2,698
523
43,675
-20,116
23,559
-12,666
10,893
-2,446
0
8,447
-2,299
-890
2,205
1,925
30,261
10,651
2,505
625
44,042
-20,864
23,179
-12,181
10,998
-1,828
0
9,171
-2,337
-1,146
5,688
5,688
32,254
11,050
2,480
633
46,417
-20,972
25,446
-12,172
13,274
-1,868
0
11,406
-2,861
-1,280
7,265
7,265
33,403
11,427
2,480
633
47,942
-21,592
26,350
-12,095
14,255
-1,709
0
12,546
-3,135
-1,373
8,038
8,038
3.6
1.0
8.0
-44.2
2.2
2.9
1.6
27.9
-18.1
0.4
3.3
-7.1
19.5
0.8
3.7
-1.6
-3.8
1.0
6.6
3.7
-1.0
1.2
5.4
0.5
9.8
-0.1
20.7
3.6
3.4
0.0
0.0
3.3
3.0
3.6
-0.6
7.4
-18.1
-8.0
16.2
-58.8
-62.0
8.6
1.7
28.7
158.0
195.5
24.4
22.4
11.7
27.7
27.7
10.0
9.6
7.3
10.6
10.6
2.36%
2.3x
45.7%
1.58%
1.31%
34.0%
24.2%
10.0%
6.4%
0.41%
23.9x
0.87%
2.39%
1.9x
46.1%
1.60%
1.67%
42.0%
27.2%
3.6%
2.4%
0.15%
23.9x
0.34%
2.37%
1.9x
47.4%
1.63%
1.63%
40.3%
25.5%
10.2%
6.8%
0.45%
21.8x
1.02%
2.49%
2.1x
45.2%
1.62%
1.61%
37.7%
25.1%
11.6%
8.0%
0.56%
19.8x
1.29%
2.53%
2.2x
45.0%
1.63%
1.57%
36.2%
25.0%
11.8%
8.4%
0.61%
19.0x
1.39%
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
769,036
1,251,525
941,436
632,533
230,105
6,445
80,895
52,365
56,694
565,958
745,987
1,269,628
926,572
626,639
236,083
9,672
81,243
53,176
57,558
557,030
751,779
1,285,911
936,487
639,171
240,440
9,866
86,931
58,864
63,246
558,640
764,082
1,308,914
952,993
651,955
244,884
10,063
94,196
66,128
70,511
569,317
777,400
1,333,146
970,600
664,994
249,417
10,264
98,215
70,147
74,530
585,111
-3.0
1.4
-1.6
-0.9
2.6
50.1
0.4
1.5
1.5
-1.6
0.8
1.3
1.1
2.0
1.8
2.0
7.0
10.7
9.9
0.3
1.6
1.8
1.8
2.0
1.8
2.0
8.4
12.3
11.5
1.9
1.7
1.9
1.8
2.0
1.9
2.0
4.3
6.1
5.7
2.8
45.2%
61.4%
122%
11.0%
10.0%
3.89%
61.4%
43.9%
58.8%
119%
11.2%
10.3%
4.54%
72.6%
43.4%
58.5%
118%
12.2%
11.3%
5.03%
58.0%
43.5%
58.4%
117%
13.2%
12.4%
4.97%
60.0%
43.9%
58.3%
117%
13.5%
12.7%
4.73%
60.0%
117
Analyst
56,426
SAN SM
SAN.MC
5.47
Nick Anderson
+44 20 3207 7838
nick.anderson@berenberg.com
SEB AB
Banking
2011
2012
2013E
2014E
2015E
4.9
4.9
46.7
41.9
1.8
2,205
13.8x
1.62x
11.2
12.5
2.6
35
5.3
5.3
49.9
45.1
2.8
2,198
12.8x
1.50x
11.1
12.4
4.1
52
5.7
5.7
53.0
48.3
2.6
2,207
12.0x
1.40x
11.1
12.7
3.8
45
5.9
5.9
56.3
51.6
2.7
2,207
11.4x
1.31x
10.9
11.9
4.0
45
6.1
6.1
59.7
55.0
2.8
2,207
11.1x
1.23x
10.6
11.6
4.1
45
118
Hold
Rating system
Relative
Current price
Price target
SEK 67.80
SEK 61.00
10/06/2013
NASDAQ
Stockholm Close
Market cap SEK 148,753 m
Reuters
SEBa.ST
Bloomberg
SEBA SS
OMX
2013e
2014e
2015e
old % old % old %
Income 39200 0.6 39930 0.6 40591 0.5
PPOP 16788 0.4 17507 0.7 18124 0.5
5.67 0.0 5.93 0.0 6.13 0.0
EPS
Source: Berenberg estimates
Share data
2,194
5,022,000
Performance data
High 52 weeks (SEK)
Low 52 weeks (SEK)
Relative performance to SXXP
1 month
-0.6 %
3 months
-0.8 %
12 months
33.3 %
72
42
SX7P
0.7 %
0.5 %
25.3 %
12 June 2013
Nick Anderson
Analyst
+44 20 3207 7838
nick.anderson@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
SEB AB
Banking
Financials
Market ratios; per share data (SEK)
EPS (reported)
EPS (Berenberg adjusted)
2011
4.91
4.91
2012
5.29
5.29
2013e
5.67
5.67
2014e
5.93
5.93
2015e
6.13
6.13
TBVPS
BVPS (reported)
DPS
P/E (Berenberg adjusted)
41.95
46.73
1.75
13.9x
45.11
49.87
2.75
12.9x
48.29
53.01
2.57
12.0x
51.57
56.29
2.68
11.5x
54.96
59.68
2.78
11.1x
Reuters ticker
SEBa.ST
Share price
SEK
68.1
Analyst
Nick Anderson
nick.anderson@berenberg.com
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
1.62x
1.46x
2.6%
35%
2,205
1.51x
1.37x
4.0%
52%
2,198
1.41x
1.28x
3.8%
45%
2,207
1.32x
1.21x
3.9%
45%
2,207
1.24x
1.14x
4.1%
45%
2,207
Market Cap
Bloomberg ticker
SEKm
149,411
SEBA SS
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
16,901
14,175
3,548
3,062
37,686
-23,513
14,173
778
14,951
0
-1,153
13,798
-2,942
-37
10,819
10,819
17,635
13,620
4,579
2,989
38,823
-23,652
15,171
-937
14,234
0
-487
13,747
-2,093
-22
11,632
11,632
18,161
13,803
4,179
3,307
39,450
-22,589
16,861
-1,252
15,609
0
10
15,619
-3,085
-18
12,516
12,516
18,553
14,081
4,240
3,315
40,189
-22,561
17,628
-1,243
16,385
0
0
16,385
-3,277
-20
13,088
13,088
18,796
14,332
4,245
3,405
40,779
-22,568
18,211
-1,268
16,943
0
0
16,943
-3,389
-20
13,534
13,534
4.3%
-3.9%
29.1%
-2.4%
3.0%
0.6%
7.0%
-220.4%
-4.8%
3.0%
1.3%
-8.7%
10.6%
1.6%
-4.5%
11.1%
33.6%
9.7%
2.2%
2.0%
1.5%
0.2%
1.9%
-0.1%
4.5%
-0.7%
5.0%
1.3%
1.8%
0.1%
2.7%
1.5%
0.0%
3.3%
2.1%
3.4%
-0.4%
-28.9%
13.6%
47.4%
4.9%
6.2%
3.4%
3.4%
7.5%
7.5%
7.6%
7.6%
4.6%
4.6%
3.4%
3.4%
0.76%
-18.2x
62.4%
1.05%
-0.07%
-4.6%
19.7%
12.5%
11.2%
0.49%
25.8x
1.60%
0.74%
16.2x
60.9%
1.00%
0.08%
5.3%
14.7%
12.4%
11.1%
0.49%
25.2x
1.84%
0.73%
13.5x
57.3%
0.91%
0.10%
6.9%
19.8%
12.7%
11.1%
0.50%
25.1x
2.13%
0.73%
14.2x
56.1%
0.89%
0.10%
6.7%
20.0%
11.9%
10.9%
0.52%
23.1x
2.18%
0.73%
14.4x
55.3%
0.88%
0.10%
6.7%
20.0%
11.6%
10.6%
0.53%
21.9x
2.23%
-0.01%
-0.01%
0.00%
0.00%
-1.5%
-0.06%
0.14%
-3.7%
-0.09%
0.02%
-1.1%
-0.02%
0.00%
-0.8%
-0.01%
0.00%
-5.0%
-0.1%
5.1%
0.3%
0.2%
-0.7%
0.0%
-0.4%
0.00%
0.01%
0.01%
0.01%
0.25%
0.29%
0.06%
0.05%
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
1,186,223
2,359,381
861,682
614,982
261
102,478
91,991
93,097
678,841
1,236,088
2,453,456
862,260
686,132
90
109,423
98,963
88,389
585,839
1,268,446
2,517,681
1,283,013
2,546,595
1,299,347
2,579,016
4.2%
4.0%
2.6%
2.6%
1.1%
1.1%
1.3%
1.3%
116,307
105,947
92,804
596,642
123,505
113,145
100,002
603,494
130,949
120,589
107,446
611,177
6.8%
7.6%
-5.1%
-13.7%
6.3%
7.1%
5.0%
1.8%
6.2%
6.8%
7.8%
1.1%
6.0%
6.6%
7.4%
1.3%
28.8%
50.3%
138%
15.9%
13.7%
1.36%
64.2%
23.9%
50.4%
143%
17.5%
15.1%
1.01%
66.3%
23.7%
50.4%
23.7%
50.4%
23.7%
50.4%
-4.9%
0.1%
-0.2%
0.0%
0.0%
0.0%
0.0%
0.0%
17.0%
15.6%
18.0%
16.6%
19.0%
17.6%
1.6%
1.4%
-0.5%
0.5%
1.0%
1.0%
1.0%
1.0%
119
Socit Gnrale SA
Banking
New strategy needs to address core issues. While the new strategy
provides short-term benefits in terms of 900m costs cuts, we wait to
see whether it sets out a clearer sense of purpose for SocGen. We
remain concerned that management is not addressing the structural
challenges that we think SocGen faces.
Risks to our view. The main risk to our view is that SocGen is able
to rebuild capital faster than expected. This would come from
earnings surprising positively or SocGen choosing to abandon growth
and scale back its CIB balance sheet and ambitions.
2011
2012
2013E
2014E
2015E
2.82
2.81
54.68
43.84
0.00
747
10.5x
0.68x
5.2
6.9
0.0
0
0.64
0.64
56.95
44.70
0.45
754
46.4x
0.66x
1.1
1.5
1.5
70
2.86
2.85
58.48
47.32
0.45
764
10.4x
0.63x
4.9
6.1
1.5
16
3.71
3.69
61.29
50.21
0.45
769
8.0x
0.59x
6.1
7.4
1.5
12
4.04
4.03
64.43
53.42
0.45
774
7.3x
0.56x
6.4
7.6
1.5
11
120
Sell
Rating system
Relative
Current price
Price target
EUR 29.72
EUR 16.00
2013e
2014e
2015e
old % old % old %
23962
-4.6
24043
-1.0
23925
-0.3
Income
PPOP 8282 -17.5 8803 -7.0 8795 -3.3
3.77 -24.4 4.14 -10.8 4.02 0.1
EPS
Source: Berenberg estimates
Share data
764
5,867,483
Performance data
High 52 weeks (EUR)
Low 52 weeks (EUR)
Relative performance to SXXP
1 month
1.2 %
3 months
-3.9 %
12 months
47.9 %
34
15
SX7P
2.5 %
-2.6 %
39.9 %
12 June 2013
James Chappell
Analyst
+44 20 3207 7844
james.chappell@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Socit Gnrale SA
Banking
Financials
Market ratios; per share data (EUR)
EPS (reported)
TBVPS (reported)
2011
2.82
42.0
2012
0.64
45.6
2013e
2.86
48.3
2014e
3.71
51.2
2015e
4.04
54
43.8
54.7
0.00
10.5x
44.7
56.9
0.45
46.4x
47.3
58.5
0.45
10.4x
50.2
61.3
0.45
8.0x
53.4
64.4
0.45
7.3x
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
0.68x
0.54x
0.0%
0%
739
0.66x
0.52x
1.5%
70%
752
0.63x
0.51x
1.5%
16%
758
0.59x
0.48x
1.5%
12%
758
0.56x
0.46x
1.5%
11%
763
2011
2012
2013e
2014e
2015e
Market Cap
Bloomberg ticker
22,338
GLE FP
Reuters ticker
SOGN.PA
Share price
Analyst
EUR
29.72
James Chappell
james.chappell@berenberg.com
+44 20 3207 7844
25,636
-17,036
8,600
-4,330
4,270
23,110
-16,438
6,672
-3,935
2,737
22,866
-16,031
6,835
-3,560
3,275
23,804
-15,616
8,188
-3,525
4,663
23,852
-15,349
8,502
-3,481
5,022
Other non-operating
12
-507
563
152
152
Associated companies
94
154
39
-265
-842
4,111
-1,323
-701
1,542
-334
-727
3,877
-1,007
-702
4,815
-1,317
-688
2,087
481
2,168
2.22%
2.0x
66.5%
1.47%
1.18%
16.9%
32.2%
6.9%
5.2%
0.18%
39.0x
0.60%
1.90%
1.7x
71.1%
1.35%
1.12%
17.0%
21.7%
1.5%
1.1%
0.04%
38.0x
0.15%
2011
2012
10/11
11/12
12/13
13/14
14/15
-9.9%
-3.5%
-22.4%
-9.1%
-35.9%
-1.1%
-2.5%
2.4%
-9.5%
19.6%
4.1%
-2.6%
19.8%
-1.0%
42.4%
0.2%
-1.7%
3.8%
-1.2%
7.7%
5,174
-1,399
-688
-29.7%
-14.2%
-62.5%
-74.8%
151.4%
201.5%
24.2%
30.8%
7.4%
6.2%
2,810
3,086
-41.7%
-77.0%
350.6%
29.6%
9.8%
1.81%
1.9x
70.1%
1.27%
1.00%
15.6%
26.0%
6.1%
4.9%
0.17%
35.7x
0.69%
1.86%
2.3x
65.6%
1.22%
0.98%
14.8%
27.4%
7.4%
6.1%
0.22%
33.8x
0.89%
1.83%
2.4x
64.4%
1.18%
0.95%
14.6%
27.0%
7.6%
6.4%
0.24%
32.2x
0.96%
-0.12%
-0.32%
-0.09%
0.05%
-0.02%
3.8%
0.01%
0.06%
4.7%
-0.12%
-0.05%
-1.0%
-0.08%
-0.12%
-4.5%
-0.05%
-0.02%
-1.2%
-0.04%
-0.03%
5.8%
-5.9%
-10.5%
-5.4%
4.3%
4.6%
1.4%
1.3%
-0.3%
0.2%
-0.14%
-0.14%
0.13%
0.05%
0.02%
-0.47%
-0.45%
0.55%
0.19%
0.07%
2013e
2014e
2015e
10/11
11/12
12/13
13/14
14/15
1.7%
1.7%
1.4%
1.4%
1.4%
1.4%
367,517
1,181,372
1,074,906
340,172
108,583
3,443
47,067
37,463
31,547
349,275
350,241
1,250,696
1,144,931
337,230
135,744
3,513
49,809
40,498
34,608
324,092
356,345
1,272,494
1,164,886
344,098
138,509
3,634
51,525
41,377
35,455
312,500
361,395
1,290,527
1,181,393
348,488
140,276
3,807
53,981
43,833
37,911
316,809
366,631
1,309,224
1,198,510
352,988
142,087
4,000
56,712
46,564
40,642
322,559
29.6%
31.1%
108%
10.7%
9.0%
25.9%
28.0%
104%
12.5%
10.7%
24.6%
28.0%
104%
13.2%
11.3%
24.5%
28.0%
104%
13.8%
12.0%
24.6%
28.0%
104%
14.4%
12.6%
121
-0.9%
25.0%
1.4%
5.9%
13.4%
4.3%
5.8%
8.1%
9.7%
-7.2%
3.4%
2.2%
2.4%
-3.6%
4.8%
5.9%
6.9%
1.4%
5.1%
6.2%
7.2%
1.8%
-2.2%
0.2%
0.7%
-4.2%
1.8%
1.6%
0.7%
0.7%
0.6%
0.6%
0.6%
0.6%
2011
2012
2013E
2014E
2015E
200.8
198.1
1,645.1
1,351.2
76.0
2,384
11.6x
1.71x
12.0
14.6
3.3
38
199.7
225.2
1,817.9
1,487.2
84.0
2,413
10.2x
1.55x
11.1
13.3
3.6
42
225.1
228.2
1,963.2
1,637.3
92.8
2,449
10.1x
1.41x
11.5
13.6
4.0
41
236.2
239.2
2,111.8
1,791.1
97.3
2,488
9.6x
1.29x
11.3
13.1
4.2
41
249.9
252.8
2,267.3
1,951.9
102.9
2,530
9.1x
1.18x
11.1
12.8
4.5
41
122
Sell
Rating system
Relative
Current price
Price target
GBp 1,480
GBp 1,450
2013e
2014e
2015e
old % old % old %
Income 20154 - 21411 - 22748 9855
10494
PPOP 9263
228
239
253
EPS
Source: Berenberg estimates
Share data
2,449
3,765,065
Performance data
High 52 weeks (GBp)
Low 52 weeks (GBp)
Relative performance to SXXP
1 month
-4.1 %
3 months
-18.8 %
12 months
-17.4 %
1,838
1,229
SX7P
-2.8 %
-17.5 %
-25.4 %
12 June 2013
James Chappell
Analyst
+44 20 3207 7844
james.chappell@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Financials
Market ratios; per share data (USD)
EPS (reported)
EPS (Berenberg adjusted)
2011
200.8
198.1
2012
199.7
225.2
2013e
225.1
228.2
2014e
236.2
239.2
2015e
249.9
252.8
TBVPS
BVPS (reported)
DPS
P/E (Berenberg adjusted)
1,351
1,645
76.00
11.6x
1,487
1,818
84.00
10.2x
1,637
1,963
92.82
10.1x
1,791
2,112
97.32
9.6x
1,952
2,267
102.86
9.1x
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
1.71
1.40
3.3%
38%
2,364
1.55
1.27
3.6%
37%
2,397
1.41
1.17
4.0%
41%
2,431
1.29
1.09
4.2%
41%
2,469
1.18
1.02
4.5%
41%
2,509
Market Cap
Bloomberg ticker
Reuters ticker
Share price
36,249
STAN LN
GBp
USD
GBP-USD
Analyst
STAN.L
1,480
2,305
1.56
James Chappell
james.chappell@berenberg.com
+44 20 3207 7844
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
10,153
7,484
17,637
-9,917
7,720
-1,019
6,701
74
6,775
-1,842
-185
4,748
10,723
8,061
18,784
-10,722
8,062
-1,392
6,670
181
6,851
-1,866
-199
4,786
11,230
8,925
20,154
-10,891
9,263
-1,584
7,679
160
7,839
-2,156
-206
5,478
11,961
9,451
21,411
-11,556
9,855
-1,701
8,153
175
8,328
-2,290
-206
5,832
12,731
10,017
22,748
-12,254
10,494
-1,751
8,743
190
8,933
-2,456
-206
6,270
5.6%
7.7%
6.5%
8.1%
4.4%
36.6%
-0.5%
4.7%
10.7%
7.3%
1.6%
14.9%
13.8%
15.1%
6.5%
5.9%
6.2%
6.1%
6.4%
7.4%
6.2%
6.4%
6.0%
6.2%
6.0%
6.5%
2.9%
7.2%
1.1%
1.3%
14.4%
15.5%
6.2%
6.2%
7.3%
7.3%
0.8%
14.4%
6.5%
7.5%
2.21%
7.6x
56.2%
1.79%
0.40%
10.0%
27.5%
14.6%
12.0%
0.86%
17.1x
1.84%
2.08%
5.8x
57.1%
1.74%
0.51%
13.0%
28.0%
13.3%
11.1%
0.78%
17.1x
1.67%
2.00%
5.8x
54.0%
1.63%
0.54%
14.1%
28.1%
13.6%
11.5%
0.82%
16.7x
1.69%
1.95%
5.8x
54.0%
1.58%
0.54%
14.2%
28.1%
13.1%
11.3%
0.80%
16.5x
1.61%
1.87%
6.0x
53.9%
1.54%
0.52%
13.8%
28.1%
12.8%
11.1%
0.79%
16.2x
1.57%
-0.13%
-0.08%
-0.05%
-0.08%
0.9%
-0.04%
0.10%
-3.0%
-0.12%
0.03%
-0.1%
-0.05%
0.00%
-0.1%
-0.04%
-0.02%
0.5%
-1.3%
0.1%
0.3%
0.0%
-0.5%
0.0%
-0.3%
-0.08%
0.04%
-0.02%
-0.01%
-0.17%
0.02%
-0.09%
-0.04%
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
266,790
592,686
491,149
345,726
63,857
661
40,714
33,653
31,833
270,510
283,885
636,518
540,759
377,639
74,778
693
45,362
38,050
35,339
301,861
304,704
703,379
582,115
409,274
80,756
748
49,578
42,266
39,610
345,438
326,803
762,632
645,825
439,877
88,426
727
54,046
46,734
44,056
380,761
350,818
827,256
717,693
473,131
96,830
808
58,863
51,551
48,955
419,836
6.4%
7.4%
10.1%
9.2%
17.1%
4.8%
11.4%
13.1%
11.0%
11.6%
7.3%
10.5%
7.6%
8.4%
8.0%
8.0%
9.3%
11.1%
12.1%
14.4%
7.3%
8.4%
10.9%
7.5%
9.5%
-2.9%
9.0%
10.6%
11.2%
10.2%
7.3%
8.5%
11.1%
7.6%
9.5%
11.2%
8.9%
10.3%
11.1%
10.3%
45.6%
45.0%
77%
13.7%
11.8%
1.52%
64.0%
47.4%
44.6%
75%
13.4%
11.7%
1.9%
56.7%
49.1%
43.3%
74%
13.0%
11.5%
1.6%
72.3%
49.9%
42.9%
74%
13.0%
11.6%
1.6%
79.8%
50.8%
42.4%
74%
12.9%
11.7%
1.6%
85.2%
1.8%
-0.4%
-2.0%
-0.2%
-0.1%
0.4%
-7.3%
1.7%
-1.3%
-0.7%
-0.4%
-0.2%
-0.3%
15.6%
0.8%
-0.5%
-0.2%
0.0%
0.1%
0.0%
7.5%
0.8%
-0.4%
-0.1%
0.0%
0.1%
0.0%
5.5%
123
Swedbank AB
Banking
2011
2012
2013E
2014E
2015E
9.5
11.3
89.3
78.5
5.3
1,130
13.6x
1.95x
12.2
15.4
3.5
54
12.1
12.1
96.7
86.2
9.9
1,102
12.6x
1.77x
14.4
15.2
6.5
82
13.4
13.4
100.0
89.8
10.0
1,099
11.4x
1.70x
14.7
16.6
6.6
75
13.9
13.9
103.5
93.4
10.4
1,099
11.0x
1.64x
13.7
15.2
6.8
75
14.4
14.4
107.1
97.0
10.8
1,100
10.6x
1.58x
13.7
15.1
7.1
75
124
Buy
Rating system
Relative
Current price
Price target
SEK 152.80
SEK 165.00
10/06/2013
NASDAQ
Stockholm Close
Market cap SEK 167,667 m
Reuters
SWEDa.ST
Bloomberg
SWEDA SS
OMX
2013e
2014e
2015e
old % old % old %
Income 35895 - 36428 - 36877 PPOP 19613 - 20371 - 20964 13.37
13.92
14.40
EPS
Source: Berenberg estimates
Share data
1,097
4,037,000
Performance data
High 52 weeks (SEK)
Low 52 weeks (SEK)
Relative performance to SXXP
1 month
-5.1 %
3 months
-3.9 %
12 months
15.1 %
169
105
SX7P
-3.8 %
-2.6 %
7.0 %
12 June 2013
Nick Anderson
Analyst
+44 20 3207 7838
nick.anderson@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Swedbank AB
Banking
Financials
Market ratios; per share data (SEK)
EPS (reported)
EPS (Berenberg adjusted)
2011
9.52
11.25
2012
12.07
12.09
2013e
13.37
13.37
2014e
13.92
13.92
2015e
14.40
14.40
Market Cap
Bloomberg ticker
TBVPS
BVPS (reported)
DPS
P/E (Berenberg adjusted)
78.55
89.26
5.30
13.6x
86.22
96.66
9.90
12.7x
89.83
100.01
10.04
11.5x
93.35
103.51
10.43
11.0x
96.95
107.11
10.80
10.6x
Reuters ticker
SWEDa.ST
Share price
SEK
153.3
Analyst
Nick Anderson
nick.anderson@berenberg.com
1.95x
1.72x
3.5%
54%
1129.6
1.78x
1.59x
6.5%
82%
1101.9
1.71x
1.53x
6.6%
75%
1099.1
1.64x
1.48x
6.8%
75%
1098.7
1.58x
1.43x
7.0%
75%
1100.0
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
19,014
9,597
1,584
3,850
34,045
-18,399
15,646
1,911
17,557
20,361
9,614
3,073
3,220
36,268
-16,560
19,708
185
19,893
21,003
9,648
2,195
3,049
35,895
-16,283
19,613
-403
19,210
20,924
9,904
2,570
3,030
36,428
-16,057
20,371
-920
19,451
21,058
10,184
2,600
3,035
36,877
-15,913
20,964
-940
20,024
7.1%
0.2%
94.0%
-16.4%
6.5%
-10.0%
26.0%
-90.3%
13.3%
3.2%
0.4%
-28.6%
-5.3%
-1.0%
-1.7%
-0.5%
-317.9%
-3.4%
-0.4%
2.6%
17.1%
-0.6%
1.5%
-1.4%
3.9%
128.4%
1.3%
0.6%
2.8%
1.2%
0.2%
1.2%
-0.9%
2.9%
2.1%
2.9%
Other non-operating
Exceptionals
Reported profit before tax
-2,134
4
15,427
-427
-997
18,469
-310
-390
18,510
-200
0
19,251
-100
0
19,924
19.7%
0.2%
4.0%
3.5%
Taxation
Minorities + Preferences
Attributable profits (reported)
Adj. attributable profit
-3,669
-14
11,744
13,704
-4,157
-8
14,304
14,324
-3,811
-3
14,696
14,696
-3,956
-2
15,293
15,293
-4,085
-2
15,836
15,836
13.3%
-8.3%
3.8%
3.3%
21.8%
4.5%
2.7%
2.6%
4.1%
4.1%
3.6%
3.6%
1.07%
-8.2x
54.0%
1.04%
-0.16%
-10.1%
20.9%
15.4%
12.2%
0.77%
19.9x
2.30%
1.09%
-106.5x
45.7%
0.88%
-0.02%
-0.9%
20.9%
15.2%
14.4%
0.76%
19.9x
2.96%
0.00%
48.7x
45.4%
0.85%
0.03%
1.9%
19.8%
16.6%
14.7%
0.77%
21.5x
3.21%
0.00%
22.1x
44.1%
0.83%
0.07%
4.4%
20.3%
15.2%
13.7%
0.79%
19.2x
3.32%
0.00%
22.3x
43.2%
0.81%
0.07%
4.5%
20.4%
15.1%
13.7%
0.81%
18.7x
3.40%
0.02%
-1.09%
0.00%
0.00%
-8.4%
-0.15%
0.15%
-0.3%
-0.03%
0.05%
-1.3%
-0.02%
0.04%
-0.9%
-0.02%
0.00%
0.0%
-0.2%
-1.1%
1.4%
0.5%
-1.4%
0.1%
-0.1%
-0.01%
0.00%
0.02%
0.02%
0.66%
0.25%
0.11%
0.07%
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
1,211,454
1,857,065
561,696
800,989
140
97,993
86,231
77,302
492,337
1,238,864
1,846,941
579,663
781,761
154
106,070
94,618
80,697
464,339
1,237,880
1,919,105
1,253,648
1,941,948
1,269,711
1,965,215
2.3%
-0.5%
-0.1%
3.9%
1.3%
1.2%
1.3%
1.2%
109,742
98,566
109,742
457,503
113,862
102,686
97,362
463,331
117,821
106,645
101,321
469,267
8.2%
9.7%
4.4%
-5.7%
3.5%
4.2%
36.0%
-1.5%
3.8%
4.2%
-11.3%
1.3%
3.5%
3.9%
4.1%
1.3%
26.5%
65.2%
216%
17.2%
15.7%
1.87%
61.5%
25.1%
67.1%
23.8%
64.5%
23.9%
64.6%
23.9%
64.6%
18.7%
17.4%
1.05%
61.9%
24.0%
24.0%
22.6%
21.0%
23.2%
21.6%
1.5%
1.7%
5.3%
6.6%
-1.4%
-3.0%
0.6%
0.6%
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
SEKm 168,216
SWEDA SS
125
UBS AG
Banking
2011
2012
2013E
2014E
2015E
1.10
1.08
12.7
10.1
0.10
3,747
15.6x
1.66x
8.7
11.9
0.6
9
-0.66
-0.66
12.0
10.3
0.15
3,776
-25.5x
1.64x
-6.0
-7.8
0.9
-23
0.70
0.69
12.7
11.0
0.20
3,758
24.6x
1.54x
5.6
7.0
1.2
29
0.92
0.90
13.4
11.7
0.60
3,758
18.7x
1.44x
6.9
8.5
3.6
65
1.06
1.03
13.9
12.1
0.70
3,758
16.3x
1.39x
7.6
9.3
4.2
66
126
Buy
Rating system
Relative
Current price
Price target
CHF 16.86
CHF 17.00
2013e
2014e
2015e
old % old % old %
Income 26026 9.5 26560 5.9 27262 4.8
PPOP 2879 42.3 5056 -2.3 5700 -1.3
0.48 43.5 0.94 -4.6 1.07 -3.6
EPS
Source: Berenberg estimates
Share data
3,758
12,018,430
Performance data
High 52 weeks (CHF)
Low 52 weeks (CHF)
Relative performance to SXXP
1 month
-0.5 %
3 months
11.7 %
12 months
25.9 %
18
10
SMI
1.9 %
11.3 %
20.4 %
12 June 2013
James Chappell
Analyst
+44 20 3207 7844
james.chappell@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
UBS AG
Banking
Financials
Market ratios; per share data (CHF)
EPS (reported)
EPS( adj)
TBVPS (reported)
2011
1.10
1.08
10.1
2012
-0.66
-0.66
10.3
2013e
0.70
0.69
11.0
2014e
0.92
0.90
11.7
2015e
1.06
1.03
12.1
8.9
12.7
0.10
15.6x
9.5
12.0
0.15
-25.5x
10.2
12.7
0.20
24.6x
10.9
13.4
0.60
18.7x
11.4
13.9
0.70
16.3x
P/TBV (x)
P/BV (x)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
1.66x
1.33x
0.6%
9%
3,774
1.64x
1.41x
0.9%
-23%
3,747
1.54x
1.32x
1.2%
29%
3,755
1.44x
1.25x
3.6%
65%
3,755
1.39x
1.21x
4.2%
66%
3,755
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
6,826
-22,482
-15,656
-84
-15,740
21,046
5,306
-900
-269
4,137
5,978
-27,219
-21,241
-117
-21,358
19,563
-1,795
-460
-223
-2,478
5,951
-24,410
-18,459
-63
-18,522
22,556
4,035
-1,200
-201
2,634
6,049
-23,181
-17,132
-65
-17,197
22,072
4,875
-1,219
-201
3,455
6,154
-22,941
-16,787
-66
-16,853
22,414
5,561
-1,390
-201
3,970
-12.4%
21.1%
35.7%
39.3%
35.7%
-7.0%
-133.8%
-48.9%
-17.1%
-159.9%
-0.5%
-10.3%
-13.1%
-46.3%
-13.3%
15.3%
-324.8%
160.8%
-9.9%
-206.3%
1.7%
-5.0%
-7.2%
2.8%
-7.2%
-2.1%
20.8%
1.6%
0.0%
31.2%
1.7%
-1.0%
-2.0%
1.8%
-2.0%
0.50%
186.4x
3.3x
-1.65%
-0.03%
0.0x
-17.0%
11.9%
8.7%
0.29%
40.7x
1.72%
0.45%
181.5x
4.6x
-2.03%
-0.04%
0.0x
25.6%
-7.8%
-6.0%
-0.20%
39.5x
-0.96%
0.49%
294.0x
4.1x
-2.03%
-0.02%
0.0x
-29.7%
7.0%
5.6%
0.23%
30.3x
1.05%
0.54%
265.3x
3.8x
-2.08%
0.58%
255.5x
3.7x
-2.17%
0.0x
-25.0%
8.5%
6.9%
0.32%
26.6x
1.47%
0.0x
-25.0%
9.3%
7.6%
0.38%
24.1x
1.76%
2011
2012
2013e
2014e
2015e
11/12
12/13
13/14
14/15
342,409
1,416,962
342,409
140,617
4,405
48,529
38,834
29,098
240,962
373,459
1,259,797
373,459
104,837
3,151
45,949
39,488
33,095
258,113
1,147,183
1,079,157
1,031,919
-8.9%
-5.9%
-4.4%
3,213
48,885
42,085
28,563
250,098
3,213
51,588
44,788
32,486
235,499
3,213
53,303
46,503
35,591
225,439
2.0%
6.4%
6.6%
-13.7%
-3.1%
0.0%
5.5%
6.4%
13.7%
-5.8%
3.3%
3.8%
9.6%
17.0%
24.2%
100%
13.8%
12.1%
20.5%
29.6%
100%
12.8%
12.8%
21.8%
21.8%
21.8%
11.4%
11.4%
13.8%
13.8%
15.8%
15.8%
Market Cap
Bloomberg ticker
Reuters ticker
Share price
Analyst
63,357
UBSN VX
UBSN:VX
CHF
16.86
James Chappell
james.chappell@berenberg.com
+44 20 3207 7844
14.1%
14.1%
14.9%
127
9.1%
-11.1%
9.1%
-25.4%
-28.5%
-5.3%
1.7%
13.7%
7.1%
Unicredit SpA
Banking
Sell
Weak demand for loans to put pressure on NII. As per the recent
Bank Lending Survey, demand for loans by households and SMEs is
expected to remain weak in 2013, which should put pressure on NII.
Any potential reduction of wholesale funding costs as per the bullcase argument will be offset by lower reinvestment yields, and the
inevitable repayment of LTRO money (26.1bn) will exert further
pressure on margins. We forecast NII of 13.9bn in 2013, -3% yoy.
2011
2012
2013E
2014E
2015E
-5.11
-5.11
26.67
18.55
0.00
1,833
-0.8x
0.22x
-17.9
-1.5
0.0
0
0.18
0.18
10.64
7.94
0.09
4,823
22.3x
0.50x
1.4
1.9
2.3
50
0.13
0.13
10.65
7.94
0.10
4,823
31.4x
0.50x
1.0
1.3
2.5
79
0.26
0.26
10.76
8.06
0.10
4,823
15.3x
0.50x
2.0
2.7
2.5
38
0.34
0.34
10.95
8.24
0.10
4,823
11.8x
0.48x
2.6
3.4
2.5
29
128
Rating system
Relative
Current price
Price target
EUR 3.99
EUR 2.50
Chg
2013e
2014e
2015e
old % old % old %
24090
1.0
24225
1.5
23891
3.9
Income
PPOP 9175 1.9 9310 2.9 8955 9.3
0.13 0.8 0.26 0.4 0.34 -0.1
EPS
Source: Berenberg estimates
Share data
5,787
111,294,000
Performance data
High 52 weeks (EUR)
Low 52 weeks (EUR)
Relative performance to
1 month
3 months
12 months
5
2
SXXP
MSCI
Europe Banks
-1.6 %
-0.7 %
2.3 %
3.5 %
33.6 %
21.8 %
12 June 2013
Eleni Papoula
Analyst
+44 20 3465 2741
eleni.papoula@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Unicredit SpA
Banking
Financials
Unicredit
Market ratios and per share data (EUR)
EPS (reported)
EPS (Berenberg adjusted)
TBVPS
BVPS
DPS
P/E (Berenberg adjusted)
P/TBV (x)
P/BV (x)
RoTE adjusted (%)
Dividend yield (%)
Payout ratio
Weighted avg. number of shares (m)
Income Statement and Ratios
Year to 31-Dec
Income Summary (EURm)
Net interest income (NII)
Net fees & commissions
Trading income
Other income
Total income
Operating expenses
Pre-provision op. profits (PPOP)
Loan loss charge (LLC)
Operating Profit
Other non-operating
Exceptionals
Reported profit before tax
Taxation
Minorities + Preferences
Attributable profits (reported)
Adj. attributable profit
Income Ratios (%)
NII/AIEAs
PPOP/LLC
Cost/income ratio
Cost/avg. assets
LLC/avg. loans
LLC/NII
Tax rate
RoTE (%) adjusted
RoE (%)
RoA (%)
Asset Tangible Leverage (x)
RoRWA
Balance Sheet and Ratios
Year to 31-Dec
Balance Sheet Summary (EURm)
Customer loans
Total assets
Interest earning assets
Customer deposits
Debt securities & other borrowings
Minorities
Ordinary equity
Tangible equity
Core (Equity) Tier 1 Capital
Risk-weighted assets
Balance Sheet Ratios (%)
RWA/assets
Loans/assets
Loans/Retail Funds
Tier 1 ratio
Core (Equity) Tier 1 ratio
NPL/loans
Provision coverage
2011
-5.11
-5.11
18.55
26.67
0.00
-0.78
0.22
0.15
-1.47
0.0
0.0
1,833
2012
0.18
0.18
7.94
10.64
0.09
22.28
0.50
0.38
1.95
2.3
50.2
4,823
2013E
0.13
0.13
7.94
10.65
0.10
31.41
0.50
0.38
1.33
2.5
78.6
4,823
2014E
0.26
0.26
8.06
10.76
0.10
15.32
0.50
0.37
2.70
2.5
38.3
4,823
2015E
0.34
0.34
8.24
10.95
0.10
11.78
0.48
0.36
3.43
2.5
29.5
4,823
2011
2012
2013E
2014E
2015E
15,252
8,048
1,099
613
25,012
-15,431
9,581
-5,733
3,848
-710
-9,756
-6,618
-1,414
-365
-9,205
551
14,285
7,793
2,808
657
25,543
-14,979
10,564
-9,613
951
-92
-742
118
1,539
-358
865
1,606
13,896
7,952
1,805
675
24,328
-14,983
9,345
-7,188
2,156
174
-650
1,681
-467
-200
613
1,263
14,125
7,991
1,805
675
24,597
-15,015
9,582
-6,310
3,272
194
-650
2,816
-958
-200
1,258
1,908
14,367
7,974
1,805
675
24,822
-15,036
9,786
-6,072
3,715
194
-650
3,259
-979
-244
1,636
2,286
1.64
1.67
61.7
1.66
1.03
37.6
14.8
-1.5
-17.9
-0.06
25.6
0.12
1.54
1.10
58.6
1.62
1.74
67.3
na
1.9
1.4
0.10
19.9
0.38
1.50
1.30
61.6
1.61
1.31
51.7
5.0
1.3
1.0
0.07
20.0
0.29
1.52
1.52
61.0
1.62
1.15
44.7
10.0
2.7
2.0
0.14
19.6
0.44
1.55
1.61
60.6
1.62
1.11
42.3
10.0
3.4
2.6
0.18
19.2
0.52
2011
2012
2013E
2014E
2015E
559,553
926,769
846,267
398,379
162,990
3,318
51,479
35,794
38,691
460,395
547,144
926,838
837,424
409,514
170,451
3,669
61,579
45,921
46,314
427,127
551,629
929,574
843,399
457,715
168,746
3,869
61,614
45,956
46,349
434,855
548,022
927,721
841,311
466,195
167,059
4,069
62,293
46,635
47,028
436,629
548,022
929,509
842,861
474,756
165,388
4,313
63,350
47,692
48,085
438,440
49.7
60.4
140.5
9.3
8.4
12.5
48.6
46.1
59.0
133.6
11.4
10.8
13.6
44.8
46.8
59.3
120.5
11.2
10.7
14.8
50.1
47.1
59.1
117.6
11.4
10.8
15.0
51.4
47.2
59.0
115.4
11.5
11.0
14.9
53.1
129
23,114
UCG IM
CRDI.MI
3.99
Eleni Papoula
Sell
2.50
-37%
11/12
12/13
13/14
Year-on-year change (%)
-6.3
-2.7
1.6
-3.2
2.0
0.5
155.4
-35.7
0.0
7.2
2.8
0.0
2.1
-4.8
1.1
-2.9
0.0
0.2
10.3
-11.5
2.5
67.7
-25.2
-12.2
-75.3
126.7
51.7
-101.8
-208.9
-1.9
-109.4
191.4
1,326.6
-130.4
-44.1
-29.1
-21.4
14/15
1.7
-0.2
0.0
0.0
0.9
0.1
2.1
-3.8
13.5
67.6
105.1
0.0
105.1
51.0
15.7
2.1
22.2
30.1
19.8
11/12
12/13
13/14
Year-on-year change (%)
-2.2
0.8
-0.7
0.0
0.3
-0.2
-1.0
0.7
-0.2
2.8
11.8
1.9
4.6
-1.0
-1.0
10.6
5.5
5.2
19.6
0.1
1.1
28.3
0.1
1.5
19.7
0.1
1.5
-7.2
1.8
0.4
14/15
0.0
0.2
0.2
1.8
-1.0
6.0
1.7
2.3
2.2
0.4
Vontobel Holding AG
Small/Mid-Cap: Banking
2011
2012
2013E
2014E
2015E
1.76
2.42
23.0
20.9
1.10
65
12.1x
1.41x
7.6
11.6
3.7
62
82
8.2
2.02
2.12
24.2
22.2
1.20
65
13.9x
1.33x
8.5
9.6
4.1
59
98
8.6
1.84
1.94
24.8
22.7
1.20
65
15.2x
1.30x
7.4
8.5
4.1
65
108
6.5
1.94
2.04
25.6
23.3
1.20
65
14.5x
1.26x
7.5
8.7
4.1
62
117
6.0
2.21
2.31
26.5
24.2
1.20
65
12.8x
1.22x
8.3
9.5
4.1
54
125
5.0
130
Hold
Rating system
Relative
Current price
Price target
CHF 29.45
CHF 25.00
2013e
2014e
old % old %
759
775
Income
157
Op. Pr. 149
1.94
2.04
EPS
Source: Berenberg estimates
Share data
2015e
old %
806
178
2.31
-
65
33,128
Performance data
High 52 weeks (CHF)
Low 52 weeks (CHF)
Relative performance to SXXP
1 month
-0.6 %
3 months
-10.8 %
12 months
24.2 %
33
18
SX7P
0.7 %
-9.5 %
16.2 %
12 June 2013
Eleni Papoula
Analyst
+44 20 3465 2741
eleni.papoula@berenberg.com
Iro Papadopoulou
Specialist Sales
+44 20 3207 7924
iro.papadopoulou@berenberg.com
Vontobel Holding AG
Small/Mid-Cap: Banking
Financials
Vontobel
Market ratios and per share data (CHF)
EPS reported
EPS (Berenberg adjusted)
2011
1.76
2.42
2012 E
2.02
2.12
2013 E
1.84
1.94
2014 E
1.94
2.04
20.9
22.2
22.7
23.3
24.2
Reuters ticker
23.0
1.10
12.1
24.2
1.20
13.9
24.8
1.20
15.2
25.6
1.20
14.5
26.5
1.20
12.8
Rating
Analyst
Share price (CHF)
P/TBV (x)
P/BV (x)
RoTE adjusted (%)
Dividend Yield (%)
Payout ratio (%)
Shares outstanding (m)
1.41
1.28
11.6
3.7
61.8
65.0
1.33
1.22
9.6
4.1
58.5
65.0
1.30
1.19
8.5
4.1
65.2
65.0
1.26
1.15
8.7
4.1
62.0
65.0
1.22
1.11
9.5
4.1
54.3
65.0
2011
2012 E
2013 E
2014 E
2015 E
2015
2015
E E
2.21
Market Cap (CHFbn)
2.31
Bloomberg ticker
82.2
8.2
10.4
98.4
8.6
10.5
108.5
6.5
6.6
117.2
6.0
5.5
125.3
5.0
4.3
2011
2012 E
2013 E
2014 E
2015 E
Phone
email:
11/12
1.9
VONN SW
VONN.S
Sell
Eleni Papoula
29.45
25.00
-15%
+44 20 3465 2741
eleni.papoula@berenberg.com
12/13
13/14
14/15
8.0
-8.3
-16.9
6.9
-15.6
-21.9
13/14
14/15
6.8
6.1
-15.5
na
2.1
1.4
4.9
0.0
na
1.6
4.3
4.0
na
4.0
1.6
13.5
0.0
na
11/12
12/13
60
452
249
28
790
-609
181
-10
-24
52
495
205
19
771
-611
161
-8
4
59
547
137
16
759
-610
149
-6
0
63
581
116
16
775
-619
157
-6
0
64
606
120
16
806
-628
178
-6
0
147
-33
0
114
157
156
-26
0
131
135
143
-26
0
117
124
150
-27
0
123
130
172
-31
0
141
147
6.3
-22.4
-100.0
14.9
-14.1
-8.6
0.1
na
-10.3
-8.3
5.2
5.2
na
5.2
4.9
14.1
14.1
na
14.1
13.4
67.3
7.5
56.3
78.6
22.5
11.6
62.1
5.7
54.3
77.5
16.4
9.6
58.4
5.5
51.4
80.3
18.0
8.5
57.4
5.5
50.5
79.8
18.0
8.7
55.7
5.2
49.2
77.9
18.0
9.5
-7.7
-23.7
-3.5
-1.3
-26.9
-16.8
-5.9
-3.1
-5.4
3.6
9.5
-12.1
-1.8
-1.1
-1.7
-0.7
0.0
2.3
-3.0
-5.2
-2.7
-2.3
0.0
9.8
RoE (stated)
RoA
Asset Leverage (x)
RoRWA
RoAUM
7.6
0.6
13.7
2.9
0.2
8.5
0.7
14.5
2.7
0.1
7.4
0.6
14.6
2.4
0.1
7.5
0.6
14.0
2.4
0.1
8.3
0.7
13.5
2.8
0.1
12.0
14.2
6.3
-8.4
-24.4
-13.6
-11.1
0.5
-11.6
-21.5
2.4
4.8
-4.1
2.6
-2.8
10.4
14.1
-3.9
14.7
5.8
2011
2012 E
2013 E
2014 E
2015 E
11/12
12/13
13/14
14/15
2,479
901
21,089
8,659
0
1,574
1,441
1,364
5,019
2,479
1,356
21,705
13,036
0
1,614
1,476
1,405
5,339
2,479
1,356
21,402
13,036
0
1,661
1,516
1,452
5,246
2,479
1,356
21,354
13,036
0
1,725
1,574
1,516
5,216
80.9
-13.4
12.8
14.9
na
5.1
6.3
17.7
1.0
0.0
50.6
2.9
50.6
na
2.6
2.4
3.0
6.4
0.0
0.0
-1.4
0.0
na
2.9
2.7
3.3
-1.7
0.0
0.0
-0.2
0.0
na
3.9
3.8
4.4
-0.6
26.6
7.3
18.2
23.3
23.3
26.6
11.8
28.6
27.2
27.2
26.6
11.4
19.0
26.3
26.3
26.6
11.6
19.0
27.7
27.7
26.6
11.6
19.0
29.1
29.1
0.0
60.3
57.5
16.6
16.6
0.0
-2.8
-33.6
-3.2
-3.2
0.0
1.4
0.0
5.2
5.2
0.0
0.2
0.0
5.0
5.0
131
European Banks
Banking
Appendices
Figure 40. Standing the test of time
EBA stress test results July 2011 CT1 ratios, all 91 banks
Name
Code
Banca March
ES079
Irish Life And Permanent IE039
OTP Bank
HU036
Sydbank
DK010
Banque Et Caisse D'Epargne LU045
Danske Bank
DK008
Jyske Bank
DK009
PKO Bank Polski
PL052
Op-Pohjola Group
FI012
Rabobank
NL048
SEB
SE085
Landesbank Berlin
DE027
Dexia
BE004
Bank Of Valletta
MT046
Kutxa
ES077
KBC Bank
BE005
Allied Irish Banks
IE037
Hypo Real Estate
DE023
Nordea
SE084
Swedbank
SE087
Unicaja
ES073
Nykredit
DK011
Dekabank
DE028
ABN Amro
NL049
BBVA
ES060
DnB NOR
NO051
Intesa Sanpaolo
IT040
Grupo BBK
ES075
WGZ Bank
DE029
Vital
ES080
ING Bank
NL047
Handelsbanken
SE086
Credit Agricole
FR014
HSBC
GB089
Santander
ES059
Erste Bank
AT001
NKBM dd
SI058
BNP Paribas
FR013
Raiffeisen Bank Int'l
AT002
AVERAGE BANK
Lloyds
GB091
National Bank Of Greece
GR031
UBI Banca
IT044
Alpha Bank
GR032
Barclays
GB090
Espiga
ES070
CT1% 2010
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
22.2%
10.6%
12.3%
12.4%
12.0%
10.0%
12.1%
11.8%
12.2%
12.6%
11.1%
14.6%
12.1%
10.5%
13.2%
10.5%
3.7%
28.4%
8.9%
8.7%
12.5%
8.8%
13.0%
9.9%
8.0%
8.3%
7.9%
10.2%
10.8%
12.5%
9.6%
7.7%
8.2%
10.5%
7.1%
8.7%
7.4%
9.2%
8.1%
8.9%
10.2%
11.9%
7.0%
10.8%
10.0%
8.2%
23.5%
20.4%
13.6%
13.6%
13.3%
13.0%
12.8%
12.2%
11.6%
10.8%
10.5%
10.4%
10.4%
10.4%
10.1%
10.0%
10.0%
10.0%
9.5%
9.4%
9.4%
9.4%
9.2%
9.2%
9.2%
9.0%
8.9%
8.8%
8.7%
8.7%
8.7%
8.6%
8.5%
8.5%
8.4%
8.1%
8.0%
7.9%
7.8%
7.7%
7.7%
7.7%
7.4%
7.4%
7.3%
7.3%
132
27.8%
20.0%
13.6%
13.6%
13.8%
13.0%
12.8%
12.2%
11.6%
10.8%
10.5%
10.4%
10.4%
10.4%
10.5%
10.0%
11.7%
10.0%
9.5%
9.4%
12.2%
9.4%
9.2%
9.2%
10.2%
9.0%
9.2%
11.3%
8.7%
9.2%
8.6%
8.6%
8.5%
8.5%
8.9%
8.1%
8.0%
7.9%
7.8%
8.1%
7.7%
9.7%
8.1%
8.2%
7.3%
8.4%
Capital deficit to
5%
6%
7%
8%
9%
10%
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-1,063
-197
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-42
-369
-67
-75
-21
-1,355
-394
-2,853
-5,684
-4,224
-1,145
-49
-8,296
-1,197
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-999
-492
-128
-485
-284
-960
-2,624
-1,218
-3,960
-360
-302
-84
-5,268
-1,447
-8,387
-16,254
-10,734
-2,476
-99
-15,529
-2,197
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-1,562
-239
-561
-295
-4,551
-176
-7,045
-962
-1,536
-797
-11,125
-428
-12,528
-1,685
-2,511
-1,299
-17,699
-681
European Banks
Banking
Figure 41. EBA stress test results July 2011 CT1 ratios, all 91 banks (contd)
Name
Code
LBW
DE019
Bayerische Landesbank
DE021
Bank Of Ireland
IE038
SNS Bank
NL050
DZ Bank
DE020
Effibank
ES063
BPCE
FR015
Ibercaja
ES072
Unicredit
IT041
Banco BPI
PT056
Societe Generale
FR016
Deutsche Bank
DE017
La Caixa
ES062
Commerzbank
DE018
RBS
GB088
Monte Dei Paschi
IT042
Caixa Geral
PT053
Pollensa
ES082
Bank Of Cyprus
CY007
Grupo BMN
ES068
WestLB
DE024
Banco De Sabadell
ES065
Banco Popolare
IT043
Banca Civica
ES071
Ontinyent
ES081
Norddeutsche Landesbank DE022
HSH Nordbank
DE025
TT Hellenic Postbank
GR035
Millennium BCP
PT054
BFA-Bankia
ES061
Novacaicagalicia
ES067
Banco Popular Espaol
ES064
NLB dd
SI057
Marfin Popular
CY006
Piraeus Bank
GR033
Bankinter
ES069
ESFG
PT055
EFG Eurobank
GR030
Catalunyacaixa
ES066
Oesterreichische Volksbank AT003
Unnim
ES076
Grupo Caja3
ES078
Banco Pastor
ES074
CAM
ES083
Agricultural Bank Of Greece GR034
CT1% 2010
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
PASS
NEAR FAIL
NEAR FAIL
NEAR FAIL
NEAR FAIL
NEAR FAIL
NEAR FAIL
NEAR FAIL
NEAR FAIL
NEAR FAIL
NEAR FAIL
NEAR FAIL
NEAR FAIL
NEAR FAIL
NEAR FAIL
NEAR FAIL
NEAR FAIL
FAIL
FAIL
FAIL
FAIL
FAIL
FAIL
FAIL
FAIL
8.2%
9.3%
8.4%
8.4%
8.2%
8.3%
7.8%
9.7%
7.8%
8.2%
8.1%
8.8%
6.8%
10.0%
9.7%
5.8%
8.5%
11.2%
8.1%
8.3%
8.7%
6.2%
5.8%
8.0%
8.9%
4.6%
10.7%
18.5%
5.9%
6.9%
5.2%
7.1%
5.2%
7.3%
8.0%
6.2%
6.4%
9.0%
6.4%
6.4%
6.3%
8.6%
7.6%
3.8%
6.3%
7.1%
7.1%
7.1%
7.0%
6.9%
6.8%
6.8%
6.7%
6.7%
6.7%
6.6%
6.5%
6.4%
6.4%
6.3%
6.3%
6.2%
6.2%
6.2%
6.1%
6.1%
5.7%
5.7%
5.6%
5.6%
5.6%
5.5%
5.5%
5.4%
5.4%
5.3%
5.3%
5.3%
5.3%
5.3%
5.3%
5.1%
4.9%
4.8%
4.5%
4.5%
4.0%
3.3%
3.0%
-0.8%
TOTAL
7.5%
8.3%
8.7%
7.0%
6.9%
8.3%
6.8%
7.3%
7.2%
7.0%
6.6%
6.5%
9.1%
6.4%
6.3%
8.8%
6.5%
8.0%
9.5%
9.3%
6.1%
8.0%
6.2%
9.4%
7.2%
5.6%
9.1%
7.1%
6.2%
6.5%
6.5%
7.4%
5.4%
9.2%
6.3%
6.8%
6.3%
7.6%
6.3%
9.8%
6.2%
6.6%
5.6%
5.1%
6.0%
Capital deficit to
5%
6%
7%
8%
9%
10%
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-58
-75
-160
-85
-140
-317
-947
-765
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
-151
-313
-168
-3
-466
-339
-35
-397
-1,325
-361
-640
-106
-197
-278
-232
-716
-551
-573
-498
-257
-279
-501
-1,430
-899
0
0
0
-3
-83
-75
-1,245
-76
-1,745
-94
-1,966
-2,271
-976
-2,175
-4,780
-796
-618
-1
-223
-355
-598
-716
-1,292
-634
-9
-1,545
-1,054
-103
-1,086
-3,488
-911
-1,594
-263
-483
-670
-555
-1,484
-1,045
-1,070
-836
-429
-417
-686
-1,912
-1,032
-1,220
-1,180
-715
-254
-1,323
-402
-6,370
-317
-7,043
-363
-6,421
-7,270
-2,622
-5,641
-11,628
-1,927
-1,420
-3
-486
-760
-1,278
-1,281
-2,271
-1,101
-16
-2,623
-1,769
-172
-1,775
-5,652
-1,460
-2,548
-420
-769
-1,062
-877
-2,251
-1,538
-1,568
-1,175
-602
-556
-871
-2,395
-1,165
-2,627
-2,525
-1,514
-505
-2,564
-729
-11,495
-557
-12,342
-632
-10,876
-12,269
-4,269
-9,108
-18,475
-3,058
-2,222
-5
-749
-1,165
-1,958
-1,846
-3,251
-1,567
-23
-3,702
-2,484
-240
-2,464
-7,815
-2,010
-3,502
-577
-1,054
-1,453
-1,200
-3,018
-2,031
-2,065
-1,513
-774
-694
-1,055
-2,878
-1,298
-4,035
-3,871
-2,313
-756
-3,804
-1,056
-16,620
-797
-17,640
-900
-15,332
-17,268
-5,915
-12,574
-25,322
-4,189
-3,023
-7
-1,011
-1,570
-2,637
-2,411
-4,230
-2,034
-29
-4,781
-3,199
-308
-3,152
-9,978
-2,559
-4,456
-734
-1,340
-1,845
-1,522
-3,785
-2,525
-2,563
-1,851
-946
-833
-1,240
-3,361
-1,431
133
European Banks
Banking
Savings limit
Coverage
Pre-funded?
Looking to
Are funds
move to ex-
Backed by
Costs to banks
Other Comments
ante?
Austria
100,000
100%
Belgium
100,000
100%
Denmark
100,000
* outstanding loans are deducted
from balance
Finland
No
No
n/a
Yes
n/a
Yes
Yes
100%
Yes
n/a
No, can be
No
used in a
dowry scheme
(take over)
100,000
100%
Yes
n/a
Yes
No
France
100,000
100%
Yes
n/a
No, can do
recaps
Yes
Germany
(mandatory)
100,000
100%
Yes
n/a
Yes
Yes
Germany
(voluntary)
Yes
n/a
No, broad
mandate
Italy
100,000
100%
No
No
n/a
No
134
- Raiffeisen banks will aid each other, as - Deposits must be in EEA ccy.
will the savings banks.
- If one group cannot cover the cost the
other will step in.
- If still short govt. will step in.
- Annual fee of 8bp of all eligible deposits - Fund is currently 2bn, no limit to the
(not just < 100k).
size of the fund.
- Written in law that deposits will be paid
(guaranteed by govt.)
- Deposits must be in EEA ccy.
- Annual fee of 25bp of covered deposits.
- Once fund reaches 1% payments will
stop (expected in 2015).
European Banks
Banking
Savings limit
Coverage
Pre-funded?
Looking to
Are funds
move to ex-
Backed by
Costs to banks
Other Comments
ante?
Ireland
100,000
100%
Netherlands
100,000
100%
Norway
Yes
n/a
Yes
Yes, initially
Jul'13 now
postponed.
Likely 2015.
n/a
NOK2m (c.270,000)
100%
* EC wants Norway to lower limit to
100k.
Yes
n/a
Spain
100,000
100%
Yes
Sweden
100,000
100%
Yes
Switzerland
CHF100,000 (c.80,000)
* up to a maximum total payout of
CHF6bn
100%
* conditional on
the size of total
payout
UK
85,000 (c.100,000)
100%
Yes
Yes, if
contribution
is above 5% of
equity then
govt. will loan
to the bank
No, fund has No formal
a broad remit obligation
n/a
No, can be
No
used to recap
banks
n/a
Yes
Yes
n/a
No formal
obligation
n/a
Yes
No
No
135
European Banks
Banking
Equity Research
BANKS
Nick Anderson
James Chappell
Andrew Lowe
Eoin Mullany
Eleni Papoula
Michelle Wilson
BEVERAGES
Philip Morrisey
Josh Puddle
BUSINESS SERVICES
William Foggon
Simon Mezzanotte
Arash Roshan Zamir
Konrad Zomer
CAPITAL GOODS
Frederik Bitter
Benjamin Glaeser
William Mackie
Margaret Paxton
Alexander Virgo
Felix Wienen
CHEMICALS
Asad Farid
John Philipp Klein
Jaideep Pandya
CONSTRUCTION
Chris Moore
Robert Muir
Michael Watts
DIVERSIFIED FINANCIALS
Pras Jeyanandhan
FOOD MANUFACTURING
Fintan Ryan
Andrew Steele
James Targett
REAL ESTATE
Kai Klose
Estelle Weingrod
TECHNOLOGY
Adnaan Ahmad
Sebastian Grabert
Daud Khan
Ali Khwaja
Tammy Qiu
TELECOMMUNICATIONS
Wassil El Hebil
Usman Ghazi
Stuart Gordon
Laura Janssens
Paul Marsch
Barry Zeitoune
TOBACCO
Erik Bloomquist
Kate Kalashnikova
UTILITIES
Robert Chantry
Andrew Fisher
Oliver Salvesen
Lawson Steele
HEALTHCARE
Scott Bardo
Alistair Campbell
Charles Cooper
Louise Hinds
Adrian Howd
Tom Jones
MEDIA
Robert Berg
Emma Coulby
Laura Janssens
Sarah Simon
Sales
Specialist Sales
BANKS
Iro Papadopoulou
CONSUMER
Rupert Trotter
INSURANCE
Trevor Moss
HEALTHCARE
Frazer Hall
INDUSTRIALS
Chris Armstrong
Kaj Alftan
MEDIA
Julia Thannheiser
TECHNOLOGY
Jean Beaubois
TELECOMMUNICATIONS
Julia Thannheiser
UTILITIES
Benita Barretto
Sales
FRANKFURT
Michael Brauburger
Nina Buechs
Andr Grosskurth
Boris Koegel
Joerg Wenzel
ECONOMICS
Dr. Holger Schmieding
Dr. Christian Schulz
Robert Wood
Sales
LONDON
John von Berenberg-Consbruch
Matt Chawner
Toby Flaux
Karl Hancock
Sean Heath
David Hogg
Zubin Hubner
Ben Hutton
James Matthews
David Mortlock
Peter Nichols
Richard Payman
George Smibert
Anita Surana
Paul Walker
ZURICH
Stephan Hofer
Carsten Kinder
Gianni Lavigna
Benjamin Stillfried
(London)
(Hamburg)
(London)
SCANDINAVIA
Ronald Bernette
(London)
Marco Weiss
(Hamburg)
LONDON
Stewart Cook
Simon Messman
Stephen O'Donohoe
CORPORATE ACCESS
Patricia Nehring
EVENTS
Natalie Meech
Charlotte Kilby
Charlotte Reeves
Hannah Whitehead
CRM
Greg Swallow
Laura Cooper
E-mail: firstname.lastname@berenberg-us.com
US Sales
BERENBERG CAPITAL MARKETS LLC
Member FINRA & SIPC
Andrew Holder
+1 (617) 292 8222
Colin Andrade
+1 (617) 292 8230
Cathal Carroll
+1 (646) 445 7206
PARIS
Sylvain Granjoux
PARIS
Christophe Choquart
Dalila Farigoule
Clmence La Clavire-Peyraud
Olivier Thibert
BENELUX
Miel Bakker
Susette Mantzel
Alexander Wace
Sales Trading
HAMBURG
Paul Dontenwill
Christian Endras
Gregor Labahn
Chris McKeand
Fin Schaffer
Lars Schwartau
Marvin Schweden
Tim Storm
Philipp Wiechmann
Burr Clark
Julie Doherty
Kelleigh Faldi
136
Kieran O'Sullivan
Emily Mouret
Jonathan Saxon
European Banks
Banking
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Joh. Berenberg, Gossler & Co. KG (hereinafter referred to as the Bank) and/or its affiliate(s) was Lead
Manager or Co-Lead Manager over the previous 12 months of a public offering of this company.
The Bank acts as Designated Sponsor for this company.
Over the previous 12 months, the Bank and/or its affiliate(s) has effected an agreement with this company
for investment banking services or received compensation or a promise to pay from this company for
investment banking services.
The Bank and/or its affiliate(s) holds 5% or more of the share capital of this company.
The Bank holds a trading position in shares of this company.
The Bank and/or its affiliate(s) holds a net short position of 1% or more of the share capital of this
company, calculated by methods required by German law as of the last trading day of the past month.
Historical price target and rating changes for Barclays plc in the last 12 months (full coverage)
Date
31 October 12
Rating
Sell
137
Initiation of coverage
17 February 11
European Banks
Banking
Historical price target and rating changes for BBVA SA in the last 12 months (full coverage)
Date
17 July 12
28 January 13
19 April 13
Rating
Sell
Sell
Sell
Initiation of coverage
19 March 12
Historical price target and rating changes for BNP Paribas SA in the last 12 months (full coverage)
Date
28 January 13
Rating
Sell
Initiation of coverage
28 January 13
Historical price target and rating changes for Commerzbank AG in the last 12 months (full coverage)
Date
02 October 12
24 April 13
07 May 13
Rating
Sell
Sell
Sell
Initiation of coverage
02 October 12
Historical price target and rating changes for Crdit Agricole SA in the last 12 months (full coverage)
Date
28 January 13
Rating
Sell
Initiation of coverage
28 January 13
Historical price target and rating changes for Credit Suisse Group AG in the last 12 months (full coverage)
Date
20 July 12
Rating
Sell
Initiation of coverage
20 July 12
Historical price target and rating changes for Danske Bank A/S in the last 12 months (full coverage)
Date
12 November 12
08 April 13
Rating
Sell
Sell
Initiation of coverage
15 March 11
Historical price target and rating changes for Deutsche Bank AG in the last 12 months (full coverage)
Date
20 July 12
12 June 13
Rating
Sell
Sell
Initiation of coverage
20 July 12
Historical price target and rating changes for DNB ASA in the last 12 months (full coverage)
Date
28 June 12
19 July 12
12 November 12
08 April 13
Rating
Buy
Buy
Buy
Buy
Initiation of coverage
15 March 11
Historical price target and rating changes for EFG International AG in the last 12 months (full coverage)
Date
26 July 12
22 January 13
12 February 13
Rating
Buy
Buy
Buy
Initiation of coverage
24 May 12
Historical price target and rating changes for Erste Group Bank AG in the last 12 months (full coverage)
Date
30 November 12
Rating
Sell
138
Initiation of coverage
15 April 11
European Banks
Banking
Historical price target and rating changes for Svenska Handelsbanken AB in the last 12 months (full
coverage)
Date
19 July 12
12 November 12
21 January 13
08 April 13
Rating
Hold
Hold
Hold
Hold
Initiation of coverage
15 March 11
Historical price target and rating changes for HSBC Holdings plc in the last 12 months (full coverage)
Date
15 May 13
Rating
Buy
Initiation of coverage
27 July 11
Historical price target and rating changes for ING Groep NV in the last 12 months (full coverage)
Date
28 January 13
Rating
Buy
Initiation of coverage
28 January 13
Historical price target and rating changes for Intesa Sanpaolo SpA in the last 12 months (full coverage)
Date
06 August 12
28 January 13
14 March 13
05 April 13
Rating
Buy
Hold
Hold
Sell
Initiation of coverage
18 August 11
Historical price target and rating changes for Julius Br Gruppe AG in the last 12 months (full coverage)
Date
22 January 13
Rating
Hold
Initiation of coverage
24 May 12
Historical price target and rating changes for KBC Groupe SA in the last 12 months (full coverage)
Date
30 November 12
15 February 13
17 May 13
Rating
Buy
Buy
Buy
Initiation of coverage
30 November 12
Historical price target and rating changes for Lloyds Banking Group plc in the last 12 months (full
coverage)
Date
Rating
Initiation of coverage
17 February 11
Historical price target and rating changes for Nordea Bank AB in the last 12 months (full coverage)
Date
19 July 12
12 November 12
21 January 13
08 April 13
Rating
Buy
Buy
Buy
Buy
Initiation of coverage
15 March 11
Historical price target and rating changes for Raiffeisen Bank International AG in the last 12 months (full
coverage)
Date
30 November 12
17 April 13
Rating
Sell
Sell
139
Initiation of coverage
15 April 11
European Banks
Banking
Historical price target and rating changes for RBS plc in the last 12 months (full coverage)
Date
Rating
Initiation of coverage
17 February 11
Historical price target and rating changes for Banco Santander SA in the last 12 months (full coverage)
Date
17 July 12
30 July 12
28 January 13
19 April 13
12 June 13
Rating
Sell
Buy
Sell
Sell
Sell
Initiation of coverage
19 March 12
Historical price target and rating changes for SEB AB in the last 12 months (full coverage)
Date
12 November 12
21 January 13
31 January 13
08 April 13
Rating
Buy
Buy
Hold
Hold
Initiation of coverage
15 March 11
Historical price target and rating changes for Socit Gnrale SA in the last 12 months (full coverage)
Date
28 January 13
Rating
Sell
Initiation of coverage
28 January 13
Historical price target and rating changes for Standard Chartered plc in the last 12 months (full coverage)
Date
07 August 12
12 March 13
Rating
Hold
Sell
Initiation of coverage
27 July 11
Historical price target and rating changes for Swedbank AB in the last 12 months (full coverage)
Date
12 November 12
21 January 13
08 April 13
03 May 13
Rating
Buy
Buy
Buy
Buy
Initiation of coverage
15 March 11
Historical price target and rating changes for UBS AG in the last 12 months (full coverage)
Date
20 July 12
30 October 12
Rating
Buy
Buy
Initiation of coverage
20 July 12
Historical price target and rating changes for Unicredit SpA in the last 12 months (full coverage)
Date
07 August 12
28 January 13
05 April 13
Rating
Buy
Hold
Sell
Initiation of coverage
18 August 11
Historical price target and rating changes for Vontobel Holding AG in the last 12 months (full coverage)
Date
30 July 12
22 January 13
07 March 13
Rating
Sell
Sell
Hold
140
Initiation of coverage
24 May 12
European Banks
Banking
41.10 %
20.16 %
38.75 %
50.00 %
12.50 %
37.50 %
Legal disclaimer
This document has been prepared by Joh. Berenberg, Gossler & Co. KG (hereinafter referred to as the Bank). This
document does not claim completeness regarding all the information on the stocks, stock markets or developments
referred to in it.
On no account should the document be regarded as a substitute for the recipient procuring information for
himself/herself or exercising his/her own judgements.
The document has been produced for information purposes for institutional clients or market professionals.
Private customers, into whose possession this document comes, should discuss possible investment decisions with
their customer service officer as differing views and opinions may exist with regard to the stocks referred to in this
document.
This document is not a solicitation or an offer to buy or sell the mentioned stock.
141
European Banks
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The document may include certain descriptions, statements, estimates, and conclusions underlining potential market
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Analyst certification
I, Nick Anderson, hereby certify that all of the views expressed in this report accurately reflect my personal views
about any and all of the subject securities or issuers discussed herein.
In addition, I hereby certify that no part of my compensation was, is, or will be, directly or indirectly related to the
specific recommendations or views expressed in this research report, nor is it tied to any specific investment
banking transaction performed by the Bank or its affiliates.
I, James Chappell, hereby certify that all of the views expressed in this report accurately reflect my personal views
about any and all of the subject securities or issuers discussed herein.
In addition, I hereby certify that no part of my compensation was, is, or will be, directly or indirectly related to the
specific recommendations or views expressed in this research report, nor is it tied to any specific investment
banking transaction performed by the Bank or its affiliates.
I, Eleni Papoula, hereby certify that all of the views expressed in this report accurately reflect my personal views
about any and all of the subject securities or issuers discussed herein.
In addition, I hereby certify that no part of my compensation was, is, or will be, directly or indirectly related to the
specific recommendations or views expressed in this research report, nor is it tied to any specific investment
banking transaction performed by the Bank or its affiliates.
I, Andrew Lowe, hereby certify that all of the views expressed in this report accurately reflect my personal views
about any and all of the subject securities or issuers discussed herein.
In addition, I hereby certify that no part of my compensation was, is, or will be, directly or indirectly related to the
specific recommendations or views expressed in this research report, nor is it tied to any specific investment
banking transaction performed by the Bank or its affiliates.
I, Eoin Mullany, hereby certify that all of the views expressed in this report accurately reflect my personal views
about any and all of the subject securities or issuers discussed herein.
In addition, I hereby certify that no part of my compensation was, is, or will be, directly or indirectly related to the
specific recommendations or views expressed in this research report, nor is it tied to any specific investment
banking transaction performed by the Bank or its affiliates.
I, Michelle Wilson, hereby certify that all of the views expressed in this report accurately reflect my personal views
about any and all of the subject securities or issuers discussed herein.
In addition, I hereby certify that no part of my compensation was, is, or will be, directly or indirectly related to the
specific recommendations or views expressed in this research report, nor is it tied to any specific investment
banking transaction performed by the Bank or its affiliates.
The preparation of this document is subject to regulation by German law. The distribution of this document in other
jurisdictions may be restricted by law, and persons into whose possession this document comes should inform
themselves about, and observe, any such restrictions.
142
European Banks
Banking
United Kingdom
This document is meant exclusively for institutional investors and market professionals, but not for private customers.
It is not for distribution to or the use of private investors or private customers.
Disclosures
Barclays plc
BBVA SA
BNP Paribas SA
Commerzbank AG
Crdit Agricole SA
Credit Suisse Group AG
Danske Bank A/S
Deutsche Bank AG
DNB ASA
EFG International AG
Erste Group Bank AG
Svenska Handelsbanken AB
HSBC Holdings plc
ING Groep NV
Intesa Sanpaolo SpA
Julius Br Gruppe AG
KBC Groupe SA
Lloyds Banking Group plc
Nordea Bank AB
Raiffeisen Bank International AG
RBS plc
Banco Santander SA
SEB AB
Socit Gnrale SA
Standard Chartered plc
Swedbank AB
UBS AG
Unicredit SpA
Vontobel Holding AG
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
no disclosures
(1)
(2)
(3)
(4)
(5)
Berenberg Capital Markets LLC owned 1% or more of the outstanding shares of any class of the subject
company by the end of the prior month.*
Over the previous 12 months, Berenberg Capital Markets LLC has managed or co-managed any public
offering for the subject company.*
Berenberg Capital Markets LLC is making a market in the subject securities at the time of the report.
Berenberg Capital Markets LLC received compensation for investment banking services in the past 12 months,
or expects to receive such compensation in the next 3 months.*
There is another potential conflict of interest of the analyst or Berenberg Capital Markets LLC, of which the
analyst knows or has reason to know at the time of publication of this research report.
143
European Banks
Banking
* For disclosures regarding affiliates of Berenberg Capital Markets LLC please refer to the Disclosures in respect of
section 34b of the German Securities Trading Act (Wertpapierhandelsgesetz WpHG) section above.
Copyright
The Bank reserves all the rights in this document. No part of the document or its content may be rewritten, copied,
photocopied or duplicated in any form by any means or redistributed without the Banks prior written consent.
May 2013 Joh. Berenberg, Gossler & Co. KG
144