These two figures show why TGKP may not be a good investment. See my previous post about the Thurgauer KB IPO.
If we took the neighbouring cantonal bank St.Galler KB as a proxy and looked at its loan growth (CAGR +5.6%) and also at Assets under Management compound annual growth rate (AuM CAGR) of -0.8%, we can see that the valuation put on TGKP participation certificates may be aggressive as the eastern part of Switzerland isn’t seeing good growth rates for underlying business.
Fig 1 St.Galler KB Loans (SGKN)
Fig 2 St.Galler KB Asset under Management (SGKN)
As the Thurgauer Kantonalbank hopes to place another 7.5% in the future, so after the 12.5% this week, one can only hope they don’t set the price too high!