LJUBLJANA (Slovenia), September 9 (SeeNews) – Austria's Raiffeisen Centrobank (RCB) said on Wednesday it has upgraded to ‘Hold’ from ‘Reduce' its recommendation on the shares of Slovenia’s second-largest bank by assets, Nova Kreditna Banka Maribor (NKBM), and has raised NKBM's target price to 12.60 euro ($18.24) per share from 11.40 euro per share.
“Based on the strong banking revenues and the improvement in the funding situation, we intend to raise our view on the stocks but remind that it still bears a certain risk from the insurance segment which might diminish over the next months. […] We believe that it is too early to buy the stock and therefore issue a ‘hold’ recommendation,” RCB said in a statement.
RCB said it raised the forecasts for NKBM's 2009 net profit to 5.4 million euro, or up by 1.4 million euro.
The banking division of NKBM performed well and the net interest income of the bank rose in the second quarter by 8.0% on the quarter. NKBM's insurance activity through Zavarovalnica Maribor had a negative impact, as this unit posted a net loss of 20 million euro in the first half of the year, the statement said. The bad performance of the insurer is the result of higher provisions allocated for the outstanding claims from windstorm damages, the statement said.
RCB said it expects the insurer to post a loss of one million euro in the second half of the year.
NKBM shares, part of the blue-chip SBITOP index on the Ljubljana Stock Exchange, were trading down 1.03% at 11.53 euro by 1024 GMT on Wednesday.
($=0.6905)