Erste Group Initiated Coverage of Šiauliu Bankas

7 October 2024, Erste Group, one off the largest banking groups in Central and Eastern Europe (CEE) region, has initiated sponsored research of AB Šiauliu Bankas at Buy rating and published the initiation of coverage research. Analysis suggests a target price of EUR 1.00.

The research highlights that Šiauliu Bankas presents an attractive investment opportunity due to its position in Lithuania’s structurally strong economy and a banking market with significant growth potential. The Bank’s strategic focus on high-margin lending segments like SME and consumer finance allows for above-average returns. Research further highlights that investors will also be drawn to the Bank’s solid capitalization, which supports an increased dividend payout ratio (minimum 50% under the new policy) and share buybacks, offering strong total shareholder returns. Finally, analysts reiterate Šiauliu Bankas having a proven track record of high growth and profitability, while its new strategy sets ambitious goals for continued improvement and transformational change, making it well-positioned for long-term success.

The analysts see Šiauliu Bankas trading at discounts to peers with a P/E ratio of 6x and P/BV multiple of 0.8x. The dividend yield is attractive and ~8%, slightly above the peer group’s average.

Erste Group Research is not only characterized by high quality standards, but also by its sound knowledge and focus on CEE region. Erste Group has – In addition to the central division in Vienna – research units in Poland, the Czech Republic, Slovakia, Hungary, Croatia, Serbia and Romania.

Erste Group Research is compiling reports to relevant economic topics on a regular basis. Research is aimed at providing investors and companies with an as independent as possible view on the development of the capital markets. Erste Group Research analysts cover around 150 companies in nine European countries and publish over 2000 reports on yearly basis.

"By strengthening our relationship and increasing engagement with our investors, we aim to provide them with more insights into the bank and its prospects and the market in which we operate from top analysts. Erste Group specialises in the Central and Eastern European market, constantly monitors the economic and investment climate in the Baltic States and the excellent reputation of their analysts gained among experts is confirmed by awards," says Tomas Varenbergas, Head of Investment Management Division at Šiauliu Bankas.

Erste Group Research will review the Bank's financial performance, market trends and provide its assessment on a quarterly basis.

Šiauliu Bankas stock is also covered by Swedbank, Estonian investment research firm Enlight Research and Norwegian investment bank Norne Securities. The analysts’ evaluations are available to investors on Šiauliu Bankas' website.

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Important Notice:

Erste Group Research reports are prepared on behalf of Šiauliu Bankas and based on publicly available information. Reports are published for informational purposes only and do not constitute, and shall not be deemed to constitute, an investment recommendation to buy, sell or enter into any other transactions in respect of the shares of Šiauliu Bankas. The information provided may not form the basis of any subsequent transaction. Investors themselves are responsible for making investment decisions based on the information published.

Additional information: 
Tomas Varenbergas 
Head of Investment Management Division
tomas.varenbergas@sb.lt