On Friday NLB’s share price noted a sharp increase of 6.31%, closing at EUR 47.2 per share.
Following the company’s preliminary announcement of FY 2020 results, NLB’s share price surged, indicating a very positive reaction from the market. The stock ended the trading day at EUR 47.2 per share, representing a daily increase of 6.31%. At the current share price, the company is traded at a P/B of 0.5x (9M 2020 results).
As a reminder, the Group reported total net operating income amounted to EUR 504.5m, representing a 2% decrease YoY. Profit before impairments and provisions amounted to EUR 210.5m, a mere 1% decrease YoY, supported by non-recurring income (the sale of NLB Vita and debt securities). Profit after tax amounted to EUR 268.9m (+38.95 YoY), strongly affected by the acquisition of Komercijalna banka, which had a net positive impact of negative goodwill in the amount of EUR 137.0m, and additionally established EUR 13.4m for expected credit losses on the performing portfolio for the Komercijalna banka group.
Excluding the impact of the acquisition, Group profit would amount to EUR 141.3m, representing a decrease of 27% YoY. Such a result significantly exceeded previous forecasts by the Group, mostly because of better-than-expected COR performance. We note that such a result is above our expectations as well, due to the same reason mentioned.
Besides that, the company indicated a dividend payment stating that their CAR is at 16.6%, with EUR 92.2m from 2020 profits already anticipated for dividend distribution, while excess capital above the regulatory requirement provides a robust basis for continued growth. Such a dividend payment indicates a high dividend yield of 10.4%.