Svenska Handelsbanken (Buy, TP: SEK120.00) - Efficiency set to improve
We remain confident cost-cutting efforts in Sweden and completion of the re-organisation in the UK will take the cost/income ratio below 45% (from 45–50% in recent years) by 2023. We have trimmed 2022–2023e EPS by c1-2%, but reiterate our BUY and SEK120 target price. We find SHB attractively valued at a 2022e P/E below 11x, given its low-risk profile, strong long-term track record and our expectation of a positive underlying earnings trend beyond 2022e.
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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