EBKOF - Erste Group: Resilient Earnings Leave Shares Attractive

2024-04-12 10:26:45 ET

Summary

• Austrian bank Erste Group has performed well since my previous coverage last summer, outperforming wider European financials by around 15ppt following strong 2023 earnings and guidance.
• 2024 profit guidance looks bullish given where we are in the cycle, with the bank guiding for a strong 15% return on tangible equity.
• At around 1x tangible book value, Erste shares remain attractive and offer solid capital return potential too.

Shares of Austrian bank Erste Group (EBKDY)(EBKOF) have done well since I last covered them back in June 2023, with the ADSs delivering meaningful outperformance versus European financials ( EUFN ) following a ~40% total return in that time. Performance has been roughly the same since my initial 'Buy' rated piece back in 2021, making for a ~12% annualized return in just under three years....

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