Pohjola Bank Gains as SEB Sees Tax Cut Benefits: Helsinki MoverKati Pohjanpalo
Pohjola Bank Oyj rose the most in almost nine months in Helsinki trading after SEB AB recommended clients buy the shares as the Finnish lender stands to benefit from lower taxes.
Pohjola shares gained as much as 4.6 percent, the most since July 26, and climbed 4.4 percent to 11.70 euros as of 11:27 a.m. in the Finnish capital. Volume was 46 percent of the daily average over the past three months. It was the biggest gainer on the 40-member Bloomberg Europe Banks and Financial Services Index, which was up 0.3 percent.
Pohjola was raised to buy from hold at SEB with a 12-month price estimate of 13 euros, an increase of 15 percent.
“From a shorter-term trading perspective, the shares look tempting,” SEB said in a note. “Their relative performance since the beginning of the year is weak in spite of earnings upgrades, the growth outlook remains attractive, and Pohjola is one of the main beneficiaries of a reduced Finnish corporate tax rate.”
The government on March 21 said it will lower the corporate tax rate to 20 percent from 24.5 percent to temper austerity, as it decided on 500 million euros ($646 million) more budget cuts and tax increases from 2014 to 2017.
The average 12-euro price estimate for Pohjola shares by five analysts is near its highest level since December 2007, when the target price was 12.47 euros, according to data compiled by Bloomberg.
Pohjola Bank is a publicly traded unit of the OP-Pohjola Group, which consists of about 200 cooperative banks.