SEB (Sell, TP: SEK95.00) - Capital impairments
We have updated our estimates following SEB’s announcements last week relating to the negative financial effects of changed accounting standards and one-off charges. This is set to result in a SEK8.2bn negative effect on equity over Q4 2017–Q1 2018, including SEK2.2bn one-offs booked through the P&L in Q4, which will also reduce the CET1 buffer by 50bp. Nonetheless, we expect the bank’s capital position to remain strong, and that SEB will propose a healthy DPS increase to SEK6.00 for 2017 (SEK5.50 in 2016). We see limited operating implications and read-across to peers from the announcements. We reiterate our SEK95 target price and SELL recommendation on SEB.
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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