London, UK, 8 May 2017

Edison issues initiation on Banca Sistema (BST)

Banca Sistema's (BST) main activity is financing trade receivables from the Italian public sector. It also purchases commercial receivables and has a growing salary and pension backed loan business. It aspires to be the leading independent speciality finance provider in Italy. A modest valuation, capital headroom, potential for increased penetration of public sector factoring in Italy, market share gains for BST and the development of diversifying businesses combine to make an appealing investment proposition.

Compared with selected peers (page 13) Banca Sistema trades on the lowest P/E and a below average price to book ratio. Applying an ROE/COE model suggests, on our assumptions, that the market is building in a cost of equity of over 15%, which appears cautious. Assuming an ROE of 22% and 12.4% cost of equity we come to a valuation of c EUR3.15, more than 30% above the current share price.

Click here to view the full report.

All reports published by Edison are available to download free of charge from its website
www.edisoninvestmentresearch.com

About Edison: Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

Edison is authorised and regulated by the Financial Conduct Authority.

Edison is not an adviser or broker-dealer and does not provide investment advice. Edison's reports are not solicitations to buy or sell any securities.

Contact details: Learn more at www.edisongroup.com and connect with Edison on: