SEB (Buy, TP: SEK128.00) - Profitable growth continues
Profitable growth continues We have raised 2022–2023e earnings by c1% following SEB’s record-high profit and impressive 13.8% ROE in Q1. We calculate it has cSEK20bn in excess capital, which, coupled with continued strong capital generation, should enable cSEK65bn – almost a third of the market cap – in capital distributions until 2023e. We expect SEB to grow pre-provision profits by 5% p.a. and further improve its ROE towards 13% on a sustainable basis by 2023. Given these fundamentals, we find the 2022e P/E of c10x attractive and reiterate our BUY and SEK128 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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