Raiffeisen Cuts BRD To Hold From Buy, Target Price Reduced To RON16.6

05.20.2011 By Florentina Dragu

Romanian bank BRD-Groupe Societe Generale (BRD.RO) was downgraded to hold from buy at Raiffeisen Zentralbank Osterreich, following a slower than expected decline in risk costs, the Austrian lender said in a report Friday.

Raiffeisen also cut its 12-month target price on BRD to 16.6 lei (EUR4.04) a share from RON16.8.

At 14:00 local time, BRD's shares traded down 0.48% at RON14.5 in Bucharest.

"We reckon that the sentiment toward the stock might improve noticeably, later in the year if, as expected, RAS (Romanian accounting standard) provisions will start to decline markedly due to their pro-cyclical nature. We advise investors to take the gains before the release of IFRS results if such exuberance arises," Raiffeisen said in its report.

BRD is controlled by France's Groupe Societe Generale. (EUR1=RON4.1091)