2003 Individual Results
21 March 2024
- Fibank’s 2023 unconsolidated net profit rose over 66% YoY to EUR 69m (EPS of EUR 5.32). The main reasons was the 36.6% rise in Net Interest Income to EUR 189mln, which managed to offset the drop in Other operating income from holding debt instruments. Additionally, OPEX was held under a tight leash, which grew over 5% with the big chunk in it, Administrative expenses growing just 2.7% to EUR 107.7m. The unavoidable rise in personnel expense, comprising over 40% of that account, was offset by the decrease in amortization of assets with the right to use.
- Total operating income was up 16.5% YoY to EUR 6m).
- Gross loans portfolio added 11.2% to BGN 3.85bn as corporate loans and retail loans, where each represent 34% of the portfolio, grew at 12.6% and 9.2%.
- The gross sum of overdue loans with delay of over 90 days was EUR 321m, which was a 21.8% decline from its 2022 level.
- The bank’s investment portfolio in securities decreased marginally, but the net interest income from debt instruments increased from BGN 24.5m to BGN 71m. It is possible that large portion of this is due to the developments with S.G. Group, a collection agency, from Q4 2023. In that quarter, Fibank requested that insolvency proceedings be initiated against 2 companies of the group- Financial Investment Company (the former name of S.G.Group) and Silver Project, which cumulatively owed ca. EUR 300m to the bank. The former is a loans collection agency, while the later is a fast loans lender. After a very public communication, an agreement was reached, which would “guarantee the obligations to the bank”.
- The total capital ratio (21.09%) and CET 1 ratio (17.60%) remained comfortably above requirements even though declining over the quarter.
- The profitability from the different lines of operations is shown below:
- Fibank successfully issued perpetual, non-cumulative, uncollateralized, deeply subordinated, non-convertible notes in the amount of EUR 40 000 000 (forty million) („The New Issue“). With the funds from the New Issue the Bank has successfully repurchased the Old Issue (ISIN code BG2100008114), in accordance with the Bank’s strategy.
Valuation
- Multiples approach
Deals, which took place in recent years in Bulgaria were considered for the data:
The ratios were calculated using data from the previous year of the deals as indicative of the available information at the time of the negotiations.
| Fibank value (‘000) using Price / Equity ratio | EUR | 969 441 |
| Fibank value (‘000) using Price / Assets ratio | EUR | 1 602 222 |
| Fibank value (‘000) using Price / (Net Interest & Fee Income) ratio (TTM) | EUR | 1 157 934 |
| Fibank unadjusted fair value (‘000), “lowest of” rule | EUR | 969 441 |
The above value is similar to current NAV.
- Market based approach
- Share price (21/03/2024): EUR 1.28
- Shares outstanding: 149,084,800
- Market cap (Valuation, ‘000): EUR 192,089
The analysis suggests a substantial hidden fair value reserve over the current market cap valuation.
Ivaylo Valchev
Equity Analyst
Tel.: +359 2 937 9862
e-mail: valchev@sis.bg
Svetozar Abrashev
Senior Managing Partner
Tel.: +359 2 937 9869
e-mail: abrashev@sis.bg
Sofia International Securities
Sofia 1000,
140 G. S. Rakovski Str.
Tel.: + 359 2 937 98 65
e-mail: info@sis.bg
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Equity Valuation and Risks
The value estimate(s) stated in this report is (are) valid only in light of the valuation methods used to derive this estimation. The use of other or more comprehensive approaches could result in other estimates of value that could diverge substantially from the results presented herein. With regard to the above, when making our conclusions about the intrinsic value of the Company’s share capital, we have not considered or evaluated any possible tax, legal or other effects that might arise from engaging in transaction(s) with the shares of the company. The document should not be regarded by recipients as a substitute for the exercise of their own independent judgment and they should seek and obtain independent investment advice is necessary. Any facts and/or information stated in this document are subject to change without notice and Sofia International Securities is not under any obligation to update or keep current the information contained herein. Any opinions expressed herein are only correct as of the stated date. Past performance is not indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any security.
General
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