Recent newsflow suggests that PKO BP is well place to deliver a strong set of results for 4Q05, which should keep sentiment towards the stock positive in front of the release date (22 February).
According to PKO BP spokesmen, Marek Klucinski, the bank granted mortgage loans of PLN 7.6bn (up some 40% y/y) in 2005. In September 2005, deputy CEO Jacek Oblekowski stated that the bank plans to increase its new mortgage loan portfolio to PLN 7bn.
Moreover, according to an Analizy Online report on the Polish investment funds market, PKO/CS TFI (mutual fund subsidiary currently 50% co-owned with Credit Suisse) increased its market share from 7.26% in 3Q05 to 8.5% (AUM of PLN 5.21bn, up 34.6% q/q) at the end of 2005. Note that 66% of full-year net inflows to PKO/CS TFI came in December, on the back of more active selling of deposit-linked AM products in bank's branch network. With a strong performance in asset management and with price increases for fee-based products and services, the outlook is for s strong pick-up in fee income in 4Q05.
We maintain our Hold recommendation on the stock with fair value of PLN 30.6 per share.