Nordic banks – statistical update – Swedish bankruptcies April 2024

The total number of bankruptcies was up 65% y-o-y and up 16% m-o-m in April 2024. Corporate bankruptcies were up 81% y-o-y and up 16% m-o-m in April 2024.

Nordic banks – Statistical update - Norwegian lending March 2024

Total lending grew by 3.3% y-o-y (3.4% adjusted for FX effects) and 0.3% m-o-m. Last month, total lending was up 3.3% y-o-y.

Swedbank AB: 2 directors

A director at Swedbank AB bought 2,350 shares at 211.100SEK and the significance rating of the trade was 47/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clearly s...

Meeting the CFO

Nordic Banks - Statistical update - Swedish lending, March 2024

Nordic banks – Statistical update - Danish lending, February 2024

Q1'24: Better than feared - BUY

Q1'24 operating profit was largely in line with our forecast, and we have marginally revised our net earnings estimates. We keep our BUY rating and TP of SEK 253.

Swedbank (Buy, TP: SEK265.00) - Good value despite NII decline

While Q1 probably marked the start of a prolonged NII normalisation (we expect 17% lower NII in 2025 than 2023), we still see fundamental valuation upside potential at a P/BV of 1.15x, given we expect Swedbank to keep its ROE well above 12% for a prolonged period. We have made limited changes to our 2024–2026e EPS, but have cut our target price to SEK265 (276) on lower dividend forecasts. Although we have reduced confidence in the timing and scope of capital distributions, we still expect an ave...

Q1'24: Better than feared

Q1'24: Earnings beat, but small revisions

An earnings beat driven primarily by trading income, which implies minor adj. net profit revisions for 2024e-26e. We keep our BUY rating with a TP of SEK 162 (164).

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...

SEB (Buy, TP: SEK192.00) - Braced for NII downturn

We find SEB well positioned to cope with looming NII headwinds, with potential for a commission revival, capital optimisation and lower regulatory fees to cushion a c15% ROE throughout 2024–2026e. We have raised our 2025e EPS by c2% and reiterate our BUY and with a raised SEK192(190) target price.

Q1'24: Stronger op. profit due to trading income

Nordea (Buy, TP: SEK169.00) - Buy in the buyback pause

The positive NII trend in Q1 underpins Nordea’s resilient NII outlook, where we forecast flat NII in 2025 versus 2023 despite lower rates. We expect the paused buybacks to resume by year-end, and accelerate in 2025, and that Nordea will still provide 10–11% in total yields for 2024–2026. We expect Nordea to retain an ROE above or around 15% for 2024–2026, and thus find the P/BV of c1.1x too low. We have raised our 2025e EPS by c2% and our target price to SEK169, and we reiterate our BUY.

Bank Brunch/Moody's raises Swedbank outlook, Société Générale divestme...

Moody's raises the outlook of Swedbank to positive on improving governance performance. Another divestment from Société Générale: Moroccan activities follow Equipment Finance

Q1 previews

While we believe the banks are past the NII peak, we forecast healthy and stable ROEs (c16% on average) in Q1, backed by rising commissions, good cost control and low loan losses. We still see attractive shareholder return potential in the sector, underpinned by robust earnings, attractive valuations (2025e average P/E 10% in 2024–2026e. We reiterate our positive sector view and BUYs on all four banks, with c30% average upside to our target prices. SHB remains our sector top pick.

Unveiling alpha

Our analysis concludes that adverse FX and valuation multiples trends have masked the banks’ superior underlying shareholder value creation versus other Swedish large caps in the past decade. Our scenario analysis, based on extrapolated underlying earnings, indicates 5%-points potential alpha per year versus the OMXS30 in the next 10 years, with further upside potential should banks’ valuation discounts narrow to historical levels. We prefer banks that can achieve balanced profitable growth to g...

Svenska Handelsbanken (Buy, TP: SEK142.00) - Green shoots on capital a...

We found new CEO Michael Green’s first results presentation encouraging, with greater clarity on capital ambitions and an emphasis on increased cost focus. The board proposed a generous 2023 DPS of SEK13; we forecast 2024–2026e DPS of SEK11-12, offering 9-12% dividend yields for the years ahead. Given SHB’s impressive long-term track record, conservative approach and overcapitalised balance sheet, we still see an attractive risk/reward at a 2025e P/E of 8.4x adjusted for the 2023 DPS (due 21 Mar...

Nordea (Buy, TP: SEK157.00) - Capital distributions slowing down

With the Q4 report, Nordea raised its ROE target to >15%, but also flagged some headwinds to its capitalisation, suggesting less scope for share buybacks in 2024–2025. We have cut our 2024–2025e EPS by 1–3%, primarily on lower buybacks, and our target price to SEK157 (165). While we expect Nordea to fall just short of its 15% ROE target in 2025–2026, we still find the P/BV of just 1.2x attractive, and reiterate our BUY.

Bank Brunch/4Q23 earnings summed up, Fitch upgrades Norddeutsche Lande...

European bank 4Q earnings lean on strong NII, provisions mixed so far Fitch upgrades Norddeutsche Landesbank's viablility rating to BB+