Svenska Handelsbanken (Buy, TP: SEK138.00) - Not what we wanted to see
Given management’s stated commitment to improved cost efficiency, accelerating cost growth in Q1 was disappointing. NII also fell more than we expected, with management’s comments on increasing deposit competition in Sweden somewhat puzzling. Still, now valued below book with a healthy 11–12% ROE outlook for 2024–2026e (despite prospects of lower interest rates) and the 11–12% dividend yield set to hold, we find the valuation and risk/reward compelling. We have cut our 2024–2026e EPS by 3–5% and our target price to SEK138 (147), but reiterate our BUY.
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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