REAL-TIME GLOBAL RESEARCH
Irish Banks - Upgrade BIRG to OW, Downgrade AIBG to N; UK Banks; Avanza, Man Group first glances; Indonesia; Love Actuary; Aviva: Financials Sector Specialist Commentary
Key takeaways
- Gigi Sparling - Specialist Sales - European Financials AC (44-20) 7134-0355 Irish Banks - Upgrade BIRG to OW, Downgrade AIBG to N; UK Banks;
- Avanza, Man Group first glances; Indonesia; Love Actuary; Aviva 7 Key Highlights Today:
- Irish Banks: Shifting Tides - BIRG up to OW, AIBG down to N
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Research evidence excerpt
Gigi Sparling - Specialist Sales - European Financials AC (44-20) 7134-0355 Irish Banks - Upgrade BIRG to OW, Downgrade AIBG to N; UK Banks;
Avanza, Man Group first glances; Indonesia; Love Actuary; Aviva 7 Key Highlights Today:
- Irish Banks: Shifting Tides - BIRG up to OW, AIBG down to N
- UK Banks: Taxing times
- AVANZA: First Glance - Looks a bit weak.
- MAN GROUP: First Glance - Look strong.
- Pru, Stan, HSBC: Indonesia exposures
- Love Actuary: Reinsurance cycles
- Aviva: In Focus Wealth First Glance Use the links below to jump straight to each section:
Global Financials wrap, Trading Recap and Colour
Irish Banks - Shifting tides. Sheel upgrades Bank of Ireland to an Overweight this morning, and downgrades AIB to Neutral.
Whilst we still very much like the Irish banks, Sheel thinks Bank of Ireland holds greater surprise potential driven by 1) a stronger structural hedge tailwind vs AIBG given larger annual hedge maturities at c€9.5bn 26E and c€10.5-11bn/y thereafter 2) a potential reduction in capital targets towards c14% given the visible progress in reducing risk from rates and asset quality, with operational risk from Motor Finance also lower 3) greater Wealth capture given its more mature proposition and HNW-gearing through Davy. Whilst the UK division has historically challenged our investment thesis, it now only contributes c8% of PAT 28E on a refocused strategy. BIRG trades on 8.5x PE, 1.4x PTNAV for a ROTE of 17.6% 28E at a discount to the sector, which we see narrowing towards AIBG on 9.8x PE, 1.8x PTNAV for a ROTE of 18.5% 28E. Link to note here.
UK BANKS: The Guardian reporting post the close last night that John Healey is likely to raise taxes on banks- despite the jewel comments earlier in the day. We have the surcharge going from 3% to 5% in our numbers - although the press is indicating it
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