STB Publishes Draft Resolutions for Upcoming Ordinary General Assembly

The STB has published the draft resolutions for its upcoming Ordinary General Assembly, scheduled for Friday, June 7, 2024. Despite the bank having absorbed all its previous losses since last year and closing 2023 with a profit of 50,600 Mtnd, the board of directors has opted to preserve these profits to consolidate the bank's equity capital.

No Dividend for Shareholders

This decision is unlikely to be appreciated by shareholders who were hoping for a dividend, even a symbolic one. Since the beginning of the year, the stock has shown a return of -14.44%, and there was hope that a shareholder payout could reverse the trend. Now, the situation may become complicated for minority shareholders.

Prioritizing Fundamentals

It's worth noting that the STB and entities of its kind, emerging from a long period of restructuring, generally have priorities other than those of minority shareholders. The most important thing is to consolidate the fundamentals, building a safety cushion that protects long-term profitability. The board's decision is understandable, as it's a matter of sustainability, while the shareholders' expectation of profitability is also legitimate.

Investment Advice

Our advice to investors: STB is a stock to hold for the future. As a public entity, its appreciation is strongly linked to that of the state's finances. If you're not prepared to wait for years, it's pointless to consider buying. However, if you're looking for a genuine medium- to long-term investment, this is a great opportunity. We've seen the bank proceed with several judicial sales of hotel assets in recent weeks, which means significant write-backs on provisions. If this pace is maintained, the quality of STB's assets will progressively and significantly improve, not to mention the impact on profits. It's a decision to be made.