Attica’s Q419 results showed good progress, with revenue sharply up and costs lower than expected. Impairment charges were higher, but underlying PBT was still better than forecast. Uncertainty around the COVID-19 pandemic greatly complicates forecasting at this stage. Our new numbers have higher impairment assumptions, mostly in 2020 and 2021. However, Attica’s strategy of strong asset expansion and its focus on the energy, infrastructure and green economy remains firm. There is just a time shift in achieving income targets. Successful execution would allow ROE to approach 6.8% (previously 7.4%) in 2022. This falls to 4.7–5.3% after factoring in needed rights issues and would provide upside to the shares, now trading at a PBV of 0.23x. We understand that Attica is currently making plans for a third securitisation as it strives to cut legacy NPLs to zero by 2021.
