FinTech Group - Banking JV is abandoned with positive effect

FinTech Group’s (FTG’s) proposed banking joint venture (JV) with Austrian Post has been abandoned in accordance with the feedback of the relevant regulatory bodies that the approval of a new banking licence might take between one and a half to two years. This supports FTG’s near-term earnings and leaves the business focused on its online brokerage activities. Meanwhile, 10-month KPIs indicate the brokerage business continues to perform well, with trades up 16% over the corresponding 10-month period. High-margin OTC products jumped 34% and represent c 25% of the total. In the wake of the recent de-rating, the shares look increasingly attractive on c 11x consensus FY19 earnings.