SEB (Buy, TP: SEK121.00) - 15% ROE target within reach
Reflecting the new financial targets, we have added share buybacks into our forecasts, resulting in a 2022e EPS increase of 6%. We forecast ~SEK45bn of total capital distributed to shareholders within the next 18 months (through dividends and buybacks). We expect SEB to continue to deliver on its positive operating leverage with revenues outpacing costs. Coupled with our modelled capital adjustments, we forecast a 2023 ROE of above 14%, close to SEB’s 15% goal, and motivating a higher P/BV than the current 1.15x in our view. We reiterate our BUY and SEK121 target price.Skandinaviska Enskilda Banken provides corporate, retail, investment and private banking services, as well as asset management and life insurance services. Merchant Banking provides wholesale and investment banking services to corporations and institutions. Retail Banking provides products mainly to private customers and small and medium-sized corporate. Wealth Management performs asset management and private banking activities and Life provides life, care and pension insurance. Division Baltic provides retail, asset management and private banking services in the Baltic countries. As of Dec 31 2013, Co. had total assets of SEK1,904.16 billion and total deposits of SEK821.47 billion.
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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