Nordea (Buy, TP: SEK92.00) - Turnaround in the making
Nordea is convincingly delivering a turnaround during the Covid-19 downturn, with a ROE above 10% in Q3 for the first time in years. Also, in light of the capital adjustment potential (we estimate EUR9bn in excess capital relative to its CET1 target in Q3), the strong Q3 performance indicates Nordea is taking major steps to lift its underlying profitability to its ‘above 10%’ ROE target. We have raised our 2021–2022e EPS by 2–3%, and in turn our target price to SEK92 (90), and reiterate our BUY.Nordea Bank is a financial services group based in Sweden. Co. has three business areas: retail banking, wholesale banking, and wealth management. Retail banking conducts a full service banking operation and serves household and corporate customers in the Nordic markets as well as the Baltic countries. Wholesale banking provides banking and other financial solutions to large Nordic and international corporate, institutional and public companies. Wealth management provides investment, savings and risk management products. It also manages customers' assets and provides financial advice to individuals and institutional investors.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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