Svenska Handelsbanken (Buy, TP: SEK120.00) - Compelling risk/reward
SHB’s Q2 results indicated that it is benefiting from higher rates, and showed an improvement in its UK operations’ profitability. We believe market concerns over the credit risk in its CRE exposure are overdone. We find the valuation attractive at a 2023e P/E below 8x given its earnings stability and expect 2022–2024 dividend yields of 10–11%. We have raised our 2023–2024e EPS by c1% and reiterate our BUY and SEK120 target price.
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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