UPDATE: DELTA LLOYD

To sell Belgium banking business for EU219m

DELTA LLOYD TO SELL BELGIUM BANKING BUSINESS FOR EU219 MLN

  • Will have an estimated positive effect of around 10 percentage points on IGD group solvency
  • Was a decent part of our bull case to get them over the self imposed 200% solvency and increase the capital return story. Generates 10-15% of mkt cap in cash
  • May take a while to come through in this mkt but higher divi is on the way. Currently +6.8%

 

Thu, 20 Nov 2014 13:47

Investor Day tomorrow

 

  • DL is holding an investor day tomorrow in Amsterdam
  • We continue to like DL on its capital return story and value vs the sector
  • Dividend messaging will be key as they aim to remove the scrip component with solvency over 200%(Self imposed level)
  • Another catalyst will be commentary on the disposal of the Belgium bank which will add another 15% to solvency and lead to an increased payout
  • They generate 10-15% of mkt cap in cash currently and only pay a 5% dividend. Higher payout on its way if they deliver tomorrow

 

 

Wed, 18 Jun 2014 10:19

Reiteration: BUY MORE

 

  • DL is misunderstood and just too cheap. This is the value in the sector.
  • Looking to real capital generation which has been our bull case and one we feel the market does not appreciate at all.
  • Subordinated note last Friday moved them over the 200% (self imposed) solvency level which is key to future dividend policy. This will lead to a reduction in the scrip divi which is 4% dilutive to share count every year and a potential increase in the dividend.
  • Underlying trends are strong as they continue to take mkt share and dominate the pensions market which is another potential positive catalyst.
  • Costs been smashed since 2008 and they are not finished. This will lead to increases in operating leverage.
  • Disposal of Belgium bank to come in the next 2 months I am hearing which will add another 15% to solvency.
  • Generate 10-15% of mkt cap in cash currently and pays a 5% dividend. Higher payout and share price on the way.
  • Stay long/Add for the disposal of Belgium bank and capital returns.

 

 

Mon, 02 Jun 2014 15:01

Delta Lloyd: 200DMA Bounceola

  • Cheap relative to the sector and market.
  • However it has had a tough time recently and is unloved.
  • It has a lot of positives RoEs are expected to increase to a very healthy 17.2% in ’15, and offering a divi yield of around 5.3%.
  • As a name the big story is capital generation which is under appreciated we feel.
  • This is a name we like MT and feel this is a good entry point if it holds the 200 mda.
  • It has bounced of this level repeatedly in the past and moved on.