■ Ahead of their business plans and with BOI's stake revaluation helping to
absorb AQR provisions in Q4, we upgrade ISP to OP (new TP of €2.8) and
maintain Neutral on UCG (new TP of €6.4). Following strong performance
YTD, we see ISP's structural advantages reflected in the current c.25%
relative valuation gap, but would need to see UCG announcing
measures to at least narrow the efficiency gap, with the bank lacking
ISP's materially larger capital buffer/dividend flexibility.
■ We upgrade UBI to OP (new TP of €7.7) given its inexpensive, low-risk
exposure to rising profitability (8% RoTBV in 2016E), and with material
leverage to LT catalysts (eg, loan growth, IR hikes). We remain UP on
BMPS (€0.13 TP) given its relatively weak profitability and, in particular,
solvency terms (6.2% FL B3 CET1 post the targeted €3bn capital increase).