2004 Q2 Individual Results
2 August 2024
- Fibank’s 2024 Q2 unconsolidated net profit dropped over 45% YoY to EUR 9m. This happened despite the 15.7% YoY growth in Net Interest Income to EUR 102m and the 13.2% increase in the Net fee and commission income to EUR 40m. The major decreases in Other net operating income (by EUR 21.8m) and Allowance for impairment (by EUR 15m) wiped off the benefit of the grown business.
- The decrease in Other net operating income by EUR 22.9m (a loss in debt instruments) is almost identical to the decrease of EUR 22.65m in Investments in securities in the Balance sheet, sub account “Enterprises”. Seems that this is part of the exposure to SG Group, which we mentioned in previous reports, which is getting written off after the agreement in Q4 2023. The allowance for impairment is part of the path to optimize the loan portfolio.
- Total operating income dropped marginally by 0.9% YoY to EUR 130m. The business generally grew noticeably (both interest and fees). However, the decrease in the exposure to the bonds from SG Group and restructuring of the loan portfolio took its toll resulting in the decrease in Net profit.
- The gross sum of overdue loans with delay of over 90 days was EUR 318m, which was a 14% decline from its Q2 2023 level of 370mln.
- The total capital ratio (22.27%) and CET 1 ratio (18.91%) remained comfortably above requirements.
- Gross loans portfolio added 11.9% to EUR8bn as corporate loans grew at 11.6% YoY (representing 61.6% of the portfolio). From retail loans, which represent 35.5% of the portfolio, the mortgages and the consumer loans contributed to the push, where the former had a slightly bigger effect.
- The loan portfolio as per the business line:
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 | 996 777 |
| Fibank value (‘000) using Price / Assets ratio | EUR | 1 111 162 |
| Fibank value (‘000) using Price / (Net Interest & Fee Income) ratio (TTM) | EUR | 1 238 832 |
| Fibank unadjusted fair value (‘000), “lowest of” rule | EUR | 996 777 |
The above value is similar to current NAV.
- Market based approach
- Share price (02/08/2024): EUR 2.47
- Shares outstanding: 149,084,800
- Market cap (Valuation, ‘000): EUR 368,239
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
Disclaimers and Required Disclosures
Sofia International Securities AD is a member of Bulgarian Stock Exchange (BSE) and the Central Depository of Bulgaria. The company provides brokerage, investment banking, equity research, portfolio management and other services. Sofia International Securities AD is regulated by the Financial Supervision Commission of Bulgaria.
Analyst Certification
The individuals responsible for the preparation of this report certify that: (1) all of the views and opinions expressed in this report are their own and reflect their personal views about the issuer(s) and the securities subject of this report, and (2) no part of any analyst’s compensation was, is, or will be directly or indirectly related to the specific views or recommendations expressed by them in this report.
Regulatory Restrictions
Sofia International Securities is not registered as a broker or dealer with the Securities and Exchange Commission or NASD in the United States of America and the information may be distributed in the US only to individuals who by acceptance hereof confirm that they represent “major institutional investors” as defined in Regulation 15a-16 of the Securities Exchange Act of 1934. Notwithstanding this, no publication of Sofia International Securities AD shall be construed as an offer (or solicitation of an offer) in any jurisdiction in which such offer or solicitation would be illegal.
Financial Interest
Sofia International Securities may or may not own shares of the company that is subject of this document. The individuals who are responsible for the preparation of this report may or may not own shares of the company that is subject of the report. Sofia International Securities is not a market maker in the securities that are subject of this document. In the past, Sofia International Securities might have provided corporate services to the company that is subject of this presentation and may seek to provide such and other services in the future. As of the date of this document Sofia International Services provides brokerage services to the company subject of this document.
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
The report is prepared solely for informational purposes and is not to be construed as a solicitation, recommendation, investment advice or an offer to buy or sell any securities or related financial instruments. The securities described herein may not be eligible for sale in all jurisdictions or to certain categories of investors. The document is based on information obtained from sources believed to be reliable but Sofia International Securities do not warrant its accuracy, nor that it is a complete summary of the securities, markets or developments referred to in the report. This report does not intend to provide assurance on the value of the company’s shares or on the achievability of the projections, statements and assumptions used by us. Actual results achieved in future periods might differ substantially from the projected ones because events and circumstances frequently do not occur as expected. Sofia International Securities accepts no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this report. Additional information will be made available upon request.