After a substantial balance sheet clean-up, Attica Bank is now beginning to implement its plan to refocus the business and expand its loan book. The time taken to refine and approve the strategy has deferred a return to profitability. Q2 and Q319 were significantly weaker than expected and we now expect profits only in 2021. The plan is to double the loan book in three years, with more cost cutting, a rebranding and a targeted approach to small business lending and the professional personal market. Through additional securitisations, management is hoping to reduce the legacy NPL book to zero by 2021. Successful delivery would allow ROE to approach 7.4% (5.1–5.7% with rights issue dilution) in 2022 and offer upside to the current 2020e P/BV of 0.22x.
