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DePfa: Bonds Streaming Better, Equity More Sanguine

FINANCIALS

DePfa (PBBGR: BBB-) bonds streaming tighter (up 1.1-1.3pts this morning) but equity rather more sanguine ahead of conf call.


  • We felt results were positive as the rate of growth in NPLs has halved (again) and loan loss charges were better. Further, front book lending pricing continues to rise and, perhaps most importantly, much of FY24 refi is done already (outside of Pfandbrief).
  • The equity market will likely continue to take the view that 2-3% forward RoE expectations with P/B at 0.23x FY24E are about right and bottom-fishing in these markets can be dangerous (note, for example, Barclays and Deutsche only trade at around 0.5x P/B).
  • However, the comments around refinancing, alongside the direction of travel on NPLs are giving credit investors much more comfort around their outlooks. Much of the call may focus on the trajectory of that RoE number but still worth watching for any refi surprises, we feel.

Conf call is 1000 (London time) at https://cdn.acs-solution.de/s/c8801c7e-0a77-4805-9268-115dd54d1345/

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